Today I would like to offer a few tips before investing in cryptocurrencies based on my own experience. This suggestion is for reference only as my subjective opinion.
Develop Strategies
As soon as many newcomers enter the cryptocurrency market, open the exchange and see the wild rise of new coins, they will start blindly without any clue, and finally end dismal.
So my advice to newbies is to develop your own investment strategy first. The first prerequisite for developing a strategy is to understand the basics of existing currencies. After having a certain self-understanding of these, do some strategic planning. Determine the investment amount and investment strategy, and it is best to set the time node of the investment.
Confirm Self-Trader Type
Trader type is largely determined by investor personality type. Here are the three types of cryptocurrency investors:
- Day traders: These types of investors pay close attention to the market, take out their mobile phones anytime, anywhere, and the air around them is filled with the smell of caffeine and adrenaline. Most of these traders are young people, and most of them are new leeks. There are quite a lot of other people’s magical stories, and you can suddenly become rich overnight.
- Swing traders: Similar to disconnect traders, but with lower trading intensity and longer investment time. Usually their investment period varies from a few days to a few weeks. Most of the traders around me are in that state.
- Long-term investors: Long-term investors usually entered the market as early as seven years ago and accumulated some bitcoins and held them for a long time. They are generally not interested in investing on a daily, monthly or weekly basis and dislike investing in stages. Investments are usually made on a yearly basis for a project.
Cryptocurrencies are a dangerous lure. Therefore, before investing in cryptocurrencies, you must first understand which type of investor you are, in order to avoid personality trends that lead to common mistakes in the investment process.
Don’t Buy Bad Cryptocurrencies
One of the taboos in the currency circle is not to buy immediately after someone says which currency has risen. The right thing to do is to only buy coins with potential value. The problem is that most cryptocurrencies are bad coins, and even white papers may be rushed out overnight to follow a certain hot spot.
There are as many as 1,500 coins active in the cryptocurrency market this year, and this does not include the 1,000 new cryptocurrencies that have entered the market. And most of these should be classified as “bad coins”.
Judge Whether a Currency is Valuable
A currency with intrinsic value must have a clear market demand. With market demand, it can have a large, supportive community. Where human needs lie is where value lies. Valuable coins must be able to attract financial support, and have a complete development team and market roadmap, and have sufficient ability to move forward.
How do Ordinary People Discover Currency of Value?
Following the VC Firm’s Buying
The operation logic and value of cryptocurrencies in projects that can receive venture capital have always been reviewed by experts, and these review experts make a living evaluating such projects. So we can find a great “research shortcut” – following the VC firm‘s buying. Of course, this is only for high probability.
Do Your Own Research
The cryptocurrency market is essentially a mind game. Never enter when others are calling, you have to be the one who calls. As far as I know about the more profitable veteran traders around, most of their most profitable projects are projects that they are optimistic about based on relevant knowledge and pattern recognition.
It was bought before the market started talking. Therefore, doing your own research and forming your own opinions can better contribute to the growth of the cryptocurrency market.
