10 Best Crypto Trading Tips For Newbies

Cryptocurrency trading can feel like a wild ride through a digital jungle, especially if you’re a newbie. It’s easy to get swept up in the excitement once you see the potential of high returns.

But before you dive headfirst into the world of crypto trading, it’s important to arm yourself with the right knowledge and strategies. Here are some of the best tips for newbies to help you navigate the field of crypto trading. 

1. Start small and learn the ropes 

Starting small is the best approach you can have when you’re new in the field. It’s tempting to throw a large sum of money into a promising coin you’ve heard about on social media, but this can be risky. When investing in presale coins, crypto expert Alan Draper recommends starting with the amount you’re willing to lose and using it as a learning experience. Also, take a look at some of the best crypto presales and see the recommended ones. You’d be surprised how many there are, considering that they are new on the market. 

You see, crypto presales are usually the first time you can buy tokens and they are sold at a discount price. The goal is to raise funds for development and make people interested in the project. So, if you’re not wealthy enough to invest in Bitcoin or Ethereum, and you like taking a little risk, these kinds of investments might be perfect for you. 

2. Do your own research (DYOR)

The crypto world is full of noise–everyone seems to have an opinion of what the next big coin will be. However, blindly following the crowd can lead to losses. That’s why it’s important to do your own research.

You can look into the coin’s technology, its use case, the team behind it, and its long-term potential. Don’t rely on rumors but try to understand what’s behind the fuss and make an informed decision.

3. Diversify your portfolio 

Even though you’re not dealing with traditional investing, you’re still investing, and diversification is the prime thing to do. As they all say, don’t put all your eggs in one basket. Spread your investments across multiple cryptocurrencies to reduce risk (there is always some risk, no matter what people say). That way, when one coin underperforms, others in your portfolio may compensate. 

In your diversified portfolio you can include a mix of stablecoins, established cryptocurrencies like Bitcoin or Ethereum, and some high-risk, high-reward altcoins.  

4. Understand the importance of security

The security of your digital assets should be a top priority. Unlike traditional banking systems, cryptocurrencies are decentralized, which means there’s no one to call if something goes wrong. 

To keep your crypto safe, you can use hardware wallets of secure software wallets. Also, enable two-factor authentication, and be wary of phishing scams. 

Remember to never share your private keys or seed phrases with anyone. Losing them could mean losing your assets forever. 

5. Master the art of timing

Timing is an art on its own, and timing the market of crypto trading is one of the trickiest. Prices can swing widely within minutes, and it can be a challenge to know when to buy or sell. 

Sometimes it’s impossible to perfectly predict the market, but you can learn to understand its trends and use some tools. For instance, there are tools like moving averages and RSI (Relative Strength Index) that can help you make better-informed decisions. 

Keep in mind that it’s better to make a small profit than to wait for a perfect price and risk missing out. 

6. Beware of FOMO and FUD

Fear of Missing Out (FOMO) and Fear, Uncertainty, and Doubt (FUD) are psychological factors that can heavily influence your trading decisions. FOMO might tempt you to buy a coin at its peak, thinking it will keep going up, while FUD can cause you to sell in a panic during a dip.

How to fight them? You can start by recognizing these emotions and then try to base your decisions on logic and research rather than fear of greed. Stay calm and stick to your strategy.

7. Keep an eye on transaction fees

Transaction fees can eat into your profits, especially when trading frequently. Each time you buy, sell, or transfer, you’ll likely encounter a fee.

These fess vary depending on the exchange and the blockchain network used. When planning trades, you can consider the cost of these fees and how they’ll impact your overall profitability. 

Sometimes, holding onto your coins longer or trading larger amounts can reduce the percentage of your profits lost to fees.

8. Stay updated with the latest news

The crypto market is always buzzing with news and events. A lot of them can cause price fluctuations, like technological advancements, regulatory announcements, and even social media trends. 

You ought to stay ahead or otherwise you’ll be lost as to why some prices are going up and down. Make a habit to follow crypto news, join relevant communities, and keep an eye on influencers in the space.

However, be wary about the sources in order to avoid misinformation. Be selective and chose reliable sources of information. 

9. Consider long-term holding (HODL)

While day trading can be profitable, it requires a lot of time, attention, and experience. For beginners, long-term holding–commonly known as HODLing–can be a less stressful strategy. 

This involves buying a cryptocurrency with strong fundamentals and holding it for an extended period, regardless of short-term market fluctuations. 

For instance, in their history, Bitcoin and Ethereum have rewarded long-term holders. Many believe that other cryptocurrencies will follow suit as the market matures.

10. Start with demo accounts

Nobody’s going to tell you this, but it’s OK to start with demo accounts, especially if you’re not ready to risk real money yet. Many trading platforms offer demo accounts where you can get familiar with the process and practice trading with virtual funds. 

This is a great way to get familiar with the trading interface, test out different strategies, and build your confidence without fear of losing your real money. 

Once you feel comfortable, you can start trading with actual funds. 

Everyone starts as a newbie

As you can see, crypto trading can be both exciting and rewarding. If you feel a bit threatened by the market, you can always try out with demo accounts first. There is a risk, of course, but you can also use some tools and strategies to help you manage. 

Don’t forget, everyone starts as a newbie, but with the right approach, you can quickly become a seasoned trader.