Cryptocurrency trading opens doors to potential financial independence. It is essential to assess the risks and analyze the best opportunities for investment.
Cryptocurrency trading is a risky profession, but it can also be very rewarding economically and professionally for traders who decide to jump into the cryptocurrency market. However, no one learns this activity overnight, since it requires enough time, patience and dedication from the trader.
Unlike other professions, a cryptocurrency trader must pay his or her mistakes with money, hence the risks of trading without proper knowledge. On average, professional traders need up to four years to refine all their techniques and get used to the sharp fluctuations in the cryptocurrency market.
For many traders, the problem is not to open a transaction and win it, but to maintain consistency for weeks, months or years. Properly conducted cryptocurrency trading during the coronavirus quarantine could open the doors to financial independence, which is seen as one of its strengths.
Education and Training
According to experts, during the initial learning phase, a cryptocurrency trader can spend between 12 and 14 hours per day studying the markets. In this unpredictable profession, it is impossible to know what will happen to the price of cryptocurrencies, so traders try to study indicators to put the odds in their favor.
Cryptocurrency traders need to know what lies behind a cryptocurrency project and what its strengths and weaknesses are. Besides, they must be familiar with the natural volatility of the market, know how to read metrics and learn the latest news both on the crypto industry and the international economy.
In this phase, the operator must be aware of the different types of exchanges, their security protocols, and reputation in the crypto ecosystem, as well as the fees that they charge per transaction. The idea is to handle as much information as possible to start making sensible decisions.
Simulated Cryptocurrency Trading
Currently, a large percentage of exchanges provide the online demonstration service to simulate trading directly on the screen instead of in a notebook. With this method, cryptocurrency trading enthusiasts can learn the basics and the operation of the platform, to then start defining their strategies.
The objectives of simulated cryptocurrency trading are not to risk real money unnecessarily and to adapt to the real conditions of exchanges. The use of fictitious capital is something important to take into account to avoid generating pressure in the event of a possible loss.
Prepare for Losses
According to Spanish trader @inmortalcrypto, money losses will occur during the career of a cryptocurrency trading enthusiast. In the beginning, they are more common because the trader is in a learning process. The operator clarifies that cryptocurrency trading does not earn large amounts of money in a short time.
He recommends that enthusiasts be prepared for losses, since mistakes happen more often at the beginning, costing capital. In this phase, it is logical and normal that little experience leads them to make bad decisions, but they will also have winning streaks as they progress.
When traders make a bad decision, they should cut the loss as soon as possible and take note of what happened. This may not be pleasant to hear, but a trader can be wrong, especially in the cryptocurrency market, where fluctuations can go from 1% to 100% in a few hours.
Protection of Funds
Those who start trading cryptocurrencies during the coronavirus quarantine should not leave the funds obtained through transactions in exchanges. They should withdraw the funds to cold wallets for a better safeguard since hackers can attack this type of platform and steal funds from users and the exchange itself.
If traders do not have control over their cryptocoins with their private keys, then the cryptocoins are not theirs. Third parties can manage them for other less transparent interests in the community. Just as decentralization and transparency are encouraged in the ecosystem, traders are responsible for managing their funds, not intermediaries such as cryptocurrency exchanges.
By Alexander Salazar