There is a lot of advice being thrown around about things like Bitcoin and other cryptocurrencies, some of it is fantastic advice, other bits are not quite so good and could potentially put you into trouble. Wherever you go, there will be people giving advice on what you should be doing when it comes to the cryptocurrency world. Today we are going to be looking at some of the best advice that you may hear about cryptocurrencies and what you should do with that advice.
Don’t Buy Just Because the Price Is Low
The cryptocurrency markets are a crazy thing, they have hundreds of ups and hundreds of downs throughout the year. The age-old idea of buying low and selling high is used with pretty much everything in the world when it comes to sales and retail, the exact same applies to cryptocurrencies. You should be buying when the price is low and then selling when the price is high. There are some problems with this, how exactly do you know when the price is at its lowest? The truth is that you cannot and you don’t, you need to guess which is why things can be a little risky, of course, once it has been purchased, holding on until the price comes back up is certainly a good strategy and one that has served people very well in the past.
You Can Trade It Too
A lot of people know things like bitcoin and other cryptocurrencies as something that you purchase and then hold on to, that is a good way to make money and it is what a lot of people are getting very rich doing, however, that works best when you can buy a large amount of it, in the thousands. If you do not have that much then there are other fantastic ways to make money with cryptocurrency, one of those ways is to trade it, much in the same way that we do the forex markets. Many brokers are now offering it and you do not need much, just $10 to get started. You can trade it 24/7 with low spreads and low commissions, allowing even those with fewer funds to trade and earn more bitcoin as they go. Trading is a great opportunity and one that more and more people are starting to take up.
Avoid FOMO
FOMO stands for the Fear Of Missing Out, you suffer from this when you see others doing things that you are not, making you want to do it. This is very prevalent in the cryptocurrency world. When you see someone buying up things like bitcoin, only for the price to rise and they make a lot of money, you of course want to be a part of that and so decide to buy simply because they did, but the problem is that you are buying into something that you do not know about or due to your emotions. The markets may well turn at this point, the other guy will withdraw his funds and you are then stuck with a currency that is losing value, it is under your purchase price so you have no choice but to hold on or to sell at a loss. Do not buy into things just because someone else is doing well and you do not wish to lose out on any possible profits, do your own research and buy what you feel is right.
Diversify
Good advice for any sort of investment or anything that you are putting your money into is the fact that you should diversify, you should not stick everything in one basket or in this case one cryptocurrency. One thing to bear in mind though is that you also do not want to spread yourself too thin, you will want to get on 5 or 6 coins, not 20 or 30, the more you do the harder it will be to keep track of the coins you have and where all your money is. So ensure that you diversify out of just one coin but not too much.
Avoid Rumors
There are a lot of rumors when it comes to cryptocurrencies and we mean a lot. More than there are with pretty much anything else in the world right now. Some rumors end up being true, but the majority of them are not, the majority of them are made up and come from people’s minds, often what they want to happen with no real evidence behind them. So the last thing that you want to do is to listen to them or even worse to act on them. We have seen a lot of people place trades or buy coins based on rumor, and you can probably guess that the results ended up with a loss. So some of the best advice that you can be given is to simply not follow the rumors and do not buy things based on what a random person on the internet has said.
Only Spend What You Can Afford to Lose
Do not use money that you cannot afford to lose, that is one of the golden rules of anything to do with money, simply do not do it. Before you buy any coins, before you place any trades, think about the money that you are putting in and consider it as a loss as soon as it leaves your bank account. Consider whether you need that money, what would you use it for? If it would be used for food or things like rent then you should not be using it at all, you should only use money that would not negatively affect your life. Whatever you do, do not do what some others do, do not borrow money, do not take a loan to trade with or to buy cryptocurrencies with, this will only lead to you being in debt potentially for many years to come.
Those are some of the things that we consider some of the best advice that you can get about cryptocurrencies. There are of course many other things that could help you out, in fact, you probably have a few tips for others too. Keep your wits about you, but with money, you can afford and do research rather than blindly listening to others. That is the best advice that you can use.
