Get Started Mining Cryptocurrency Reddit

Get started mining cryptocurrency reddit

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The disclaimer that cryptocurrency investing is a volatile field is important for both beginners and veterans. If you take the plunge without considering important lessons, it is quite likely that you will learn the hard—and expensive way.

Here are four important lessons that you need to uphold before you test the waters:

#5.

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Have an investment strategy

There is a distinction between investing and trading, which you need to understand before you step into the crypto space.

Briefly, trading is a short-term activity in which you aim at maximizing your returns. On the other hand, investing is a long-term activity whereby you focus on buying and holding the digital assets regardless of the prevailing prices in the market.

Many people think of investing in a particular cryptocurrency simply because they hear people saying it is a good investment.

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However, there’s much more to cryptocurrency investing than just whether an asset is a good deal.

Exit strategy

To begin with, you need both enter and exit strategies.

By knowing your expectations, the amount you’re willing to invest, the risk involved, and timing, you can step into cryptocurrency investing with a focused mind.

These are important areas, which you should clear before you make your first investment.

Don’t follow the crowd

Many people go into cryptocurrency investing by chasing the latest trends or the much-hyped coins in the market. Other people simply follow other peoples’ advice without confirming it.

In such circumstances, the ventures fail in the long-term.

Before you jump into cryptocurrency investing, you should come clear on what you want to invest and on what you’re willing to risk. Choose the amount of time and energy, investment duration, and the exit strategy.

#4.

Choose your category of investment

This lesson has to do with your personality type. Cryptocurrency investing goes beyond what most people know.

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It is much more psychological—which is why you should choose a cryptocurrency investment that best suits your personality type.

There are three types of cryptocurrency investing as follows:

Day trading

Day trading involves watching the markets all the time, throughout the day.

It also involves research, and practically buying and selling several times during the day. Day trading is high-risk, emotional, and high-intensity. If you choose this direction, you’ll have to be young, full of energy and drive.

Swing trading

Swing trading is another option to consider for cryptocurrency investing. This approach is somehow similar to day trading but entails less intensity. Once purchased, you can hold your investments for a longer duration ranging from a few days to weeks.

Even so, you can do a few buys and sells in the course of the week.

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Most crypto investors choose this option.

Long-term cryptocurrency investing

Long-term investing in the crypto space involves buying and holding. Think of the guy who bought bitcoin five years ago and still holding to date.

Most people who choose this type of investing devote 1% of their diversified wealth into digital currency investing.

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As a long-term investor, you should not focus on the intraday, daily, or weekly trends. View your investment in a duration spanning years. Yours is a buy-and-hold type of investment.

From the onset, you should decide what type of an investor you are, and what cryptocurrency investing best suits your personality.

Besides, cryptocurrency trading is tempting and can sway you off your trading “personality.” If that happens, you can end up in disaster.

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It is always advisable to stick to the type of trading that matches your personality because that way you can be able to identify and separate viable trades from the impractical ones.

#3. Never buy shit coins

The crypto market has more than 1500 cryptocurrencies, as of this writing.

Shit coins are proposed digital assets with no essential value. With that in mind, do not just jump into buying a coin because its value is going up or because your friend told you about it.

Unfortunately, most digital currencies are shit coins. With more than 1500 different digital currencies in the market and more to enter the market this year, most of those coins fall under the category of “shit coins.”

What is a non-“shit coin?”

The opposite of a shit coin is a cryptocurrency with intrinsic value.

Such cryptocurrencies come have a clearly defined market need, large supporting community, a well-endowed team of developers, and efficient roadmap to achieve their objectives.

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Above all, such projects have sound financial backing.

Vetted by experts

Digital currencies with external funding (VC) go through a strict evaluation process by experts. In fact, you can identify the next up and coming digital asset by simply following what VC firms buy.

Cryptocurrency projects with adequate or more money to pay their employees and to do marketing, often have higher chances of success.

However, it is possible to find day traders buying shit coins all the time, which makes day trading a high-risk option.

As a crypto investor, remember to always refrain from buying shit coins.

#2. Don’t skimp on research

Unfortunately, Fear, Uncertainty, and Doubt (FUD) rule the cryptocurrency market. In addition, Fear Of Missing Out (FOMO) adds to the complexity.

As noted earlier, cryptocurrency investing is a psychological game and each investor needs to master the rules of the game.

Learn to borrow good practices, and how to make your personal decisions.

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The crypto market has no prophets, only wise guesses.

If you fail to conduct your own research, then you will depend on the research of other people, which may not always suit your trading circumstances. A good practice is to research on little-known but stable cryptocurrencies. Buy them and hold before they become popular and everyone is talking about them.

What is a good research?

By doing your own research, you can reap good returns from your investments, especially if you do it right.

Successful research involves honing your critical skills, recognizing particular patterns, as well as balancing logical and emotional faculties.

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A carefully conducted research will help you overcome the psychological components on the game.

#1. Start small, Dream big

When it comes to cryptocurrency investing, it is advisable to start small and grow. It is often easier to grow a $100 investment into $500 than growing $10,000 to $50,000 in a few months.

The benefits of starting small

Starting small enables you to make less costly mistakes and learn from them.

With better skills, you can perfect your trade and receive better returns.

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Starting small also gives anyone across the globe the opportunity to participate in cryptocurrency investing. Especially for first-time investors, you don’t need much money to get started.

The market will always reward you for your skills.

If you have better skills, you stand to earn more profits from your trades, which give you more capital to work with in return.

It also important to remember that there is a learning curve to it, which money cannot buy, and you only learn it by doing.

Start by investing in yourself

You start by investing in yourself—in your trading skills.

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Interestingly, you will be able to know when your trading skills improve because your working capital will increase according to your trading ability.

If you start small, you will think of your trade not as an end itself, but as a means to grow. There will be little risk involved, with a higher motivation to grow.

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In the end, you will keep the process going.

Final words

Cryptocurrency investing can be fun, enjoyable, and rewarding. The first step is to approach it in the right way.

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Alternatively, it could also cause financial ruin, especially for over-ambitious first timers. If you are already a trader, or aspiring to be one, it would be helpful to heed this advice.

What else can you add to this list for effective crypto investing? Join the conversation over at Telegram (https://t.me/coinstaker)

Images from CoinStaker Library and Google

Author info

Tony is a writer for the crypto space.

He presents cryptocurrency and blockchain topics to the public in a way that he only can. While carefully researched, this article should not be taken as an express investment guide. Do your own research and consult a financial advisor before you invest in cryptocurrency.

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