Investing in cryptocurrencies is no different from investing in stocks, it is even easier to invest in cryptocurrencies. Its main advantage is that the entry threshold is very small, unlike the Stock Market.
Introduction
Table of Contents
You already know that you can invest in a project before entering the stock exchange, but what if you don’t want to or don’t get into such projects?
This is where good old investing comes in. The problem is that beginners only know about BTC, ETH and meme coins, and there are about 16,000 different coins on the market, in different networks and with different purposes. How to choose coins and where to look for them, we will analyze in this article.
What a beginner needs to know before starting to invest in cryptocurrency?
First, you need to know the basics of the crypto market.
- The crypto market works 24/7
- The rate of all cryptocurrencies is mainly dependent on Bitcoin
- Investments are a high risk, but investing in cryptocurrencies carries even more risk, because the rates of some cryptocurrencies can easily grow by hundreds of percent in a day, or fall to zero in an instant
- Not all assets are highly liquid
- Not all assets are on the same exchange (Here you will need to be flexible or use the Letsexchange crypto exchange to change LTC to NEO, for example)
And so you already know the basics of cryptocurrency, now let’s move on to the basics of investing. The most important thing in investing is to have a clear plan, without a plan you will be doomed to failure in investing.
Fundamentals of investing in cryptocurrencies
The most important thing you need to start investing is:
- Account on one of the CEX-exchanges;
- Either a wallet to access DEX exchanges.
For beginners, it is better to get an account on one of the CEX exchanges.
Next, you need to decide on the allocated amount for investment. You should not immediately carry all the money into the market.
Next, you yourself need to allocate an amount that will not be critical for you, for example:
- Every month you earn $1000, and after calculating how much you need for life, for the next month, you have, for example, $500, and from these funds you allocate no more than 10-15%
In general, it is better to adhere to such a strategy, when a certain percentage of the funds that remain are invested in an investment portfolio.
Rules to follow:
- Do not buy at all one asset (Do not put your eggs in one basket, for example, you can change part of your ETH to BITCOIN)
- Buy assets because of what someone said (Example, recently a famous singer advertised a TON coin that flew by 80% in a day, but most went already at the peak of growth)
- Adhere to the rules: Asset selection, portfolio management and always take risks
- Don’t get carried away by emotions (Invest and make portfolio decisions with a cool head)
How to select cryptocurrencies
Fundamental analysis
- It’s worth starting with Whitepaper (What the project creates and what problems it affects)
- Team (Who, where, where they worked, and what they did)
- Investors and partners (What kind of investor, where did they invest before?)
- Roadmap (Development Plan, here it is important to study which products and when they will be released and in what period their project will be implemented)
Technical analysis
It’s already to each his own, but is it worth using it?
Rather, yes than no!
Technical analysis is a separate world, and it will take a lot of time to learn everything by heart, but we will help you to reduce it!
What is worth knowing and studying from technical analysis for investing?
Sideways trading is what I myself use because the market spends most of its time in the sideways, and in the sideways there is a set or unloading of Big Holder’s positions
- Fibonacci lines (Used for false takeaways)
- Level of maximum volume (Used in conjunction with Fibonacci to find TBX)
Here’s what you need to know to trade sideways
Trend trading is the phase of the market where many lose
- Horizontal volumes
- And trade sideways
I would not study anything else for investing, because different lines will not give you an advantage, because usually these are manipulation patterns from where you can only take a loss.
