Although the main benefactors from the Bitcoin boom were those that started out when it was first created back in 2009, there is still plenty of scope for wise financial backers to benefit. In this guide, we will look at how you can invest and trade in Bitcoin and cryptocurrency with the lowest risk possible.
Start Out Small
If you are new to bitcoin and cryptocurrency trading, then we would always suggest that you start small and dip your toe in. Although many might believe that crypto trading is straightforward, it is quite the opposite and although it has made a lucky few a generous amount in a short time, there is a real risk involved that should never be ignored.
As it stands, the digital currency market is incredibly volatile and highly unpredictable. So, we would suggest that you do not start out all guns blazing, throwing all your money into the ring. You need to start out with a small amount that you are prepared to risk so you can negotiate the new market with little at stake.
Choose a Safe and Secure Wallet
Your wallet is where you keep all your crypto funds, so it is obvious that you choose a safe and secure wallet that guarantees security but is straightforward and easy to use. Many starting out opt for agents such as Coinbase and use the wallet provided. Should you want to pick your own then you need to know what you’re looking for.
- Cold wallets are seen as the safest option as they store your resources disconnected.
- Hot wallets are more associated with the internet and are more open to programmers.
If you have a limited amount of Bitcoin or cryptocurrency that you need quick access to, then a hot wallet would be more suitable. However, if you have a high value of Bitcoin, then cold wallets offer more security. Many traders often have one of each, with their main assets in the cold wallet, but with some of their Bitcoin easily accessible in a hot wallet… a bit like a savings account and a current account.
Research The Markets
Successful traders research the market first. Read the news and understand what is happening in the world of cryptocurrency. Try to learn what is happening and to understand as much as you can yourself without relying on Bitcoin tips from dealers, who may have an agenda.
Pick a Trading Strategy
You need to decide how much time you want to spend on the trading and how much you want to make.
- Firstly there are scalpers. These make lots of small trades regularly for just small amounts.
- Day brokers buy and sell in 24 hours, making the most of any swings and developments that happen in any 24-hour period.
- Swing Exchangers look for patterns, which involves time and research.
- Detached Brokers are in it for the long haul.
Stick to Your Plan
Because Bitcoin is unpredictable, you need to make sure that whatever your plan or strategy is, that you stick to it. The biggest danger is getting greedy and pushing for too much – holding on for too long before it plummets again. If you set a target, stick to it. It is better to make small gains often than risk a big loss.