The two most important tools to keep in mind while trading, are fundamental analysis and technical analysis.
This analysis looks at the big picture instead of price movements. When you are doing fundamental analysis of a coin, you are looking at:
Keeping yourself up-to-date on all the current events is imperative for solid fundamental analysis.
Technical analysis is a tool, or method, used to predict the probable future price movement of a currency pair, cryptocurrency pair, or a stock. It can be a creative and dynamic which helps you gain a very deep perspective into the coin.
The core assumption behind Technical analysis is thus: Regardless of what’s currently happening in the world, price movements speak for themselves, and tell some sort of a story that helps you predict what will happen next.
Having an itchy trading finger
Because of crypto’s volatility and the general public’s FOMO, people tend to overtrade. One thing you need to understand is that trading cryptocurrency is quite like gambling and isn’t an exact science. Don’t overplay your hand especially when you lack disposable income. Sure you can gain a lot but you can lose a lot as well.
Trading without any strategy is a fool’s errand. Take your time and do some research. Learn about the coins and learn about certain trading strategies. Learn about the exchanges and choose the one which will benefit you the most.
Also, people tend to invest in the same coins that their friends are investing in. While there is nothing in taking advice, you should combine advice with your own research.
Giving into emotions
Fear and greed are the two most common emotions when it comes to investors. Fear can cause you to not dive into a coin when it is ready or it can cause you to leave your trade prematurely. Conversely, greed can cause you to have blind and baseless faith in a particular coin or it may make you hold on to a trade way past its expiry trade. Do not give into emotions, stay as rational as possible.
Not learning from mistakes
It doesn’t matter whether you are a beginner or an expert, you will make mistakes. However, what separates the professional traders from the novices is the ability to learn and grow from those mistakes. If you misread a pattern the first time then that’s an honest mistake. If you misread the same pattern a second time then it is completely on you.
Keeping your crypto in the exchange
Actually, this point provides a pretty awesome segue into our next section which is….
Every exchange has its own wallet, however, it is not the safest of options. If you plan on holding on to your crypto for a long time then you should look into cold wallets. The two kinds of cold wallets that we would recommend are hardware wallets and paper wallets.
Whatever you have learned in this guide should help you get started with your trading. However, you will need to keep learning and to gain more and more knowledge.