A good trader never forgets the important lessons that earned them financial wins. When moving from the stock market to bitcoin, only a few of those lessons will translate. To make the most out of crypto trading, here are the most common old tricks that still packs a modern punch.
1. Research Is Everything
Don’t make the mistake of thinking that crypto is a modern version of stock trading. Even 1 minute of studying the s2f model will completely change your viewpoint when trading crypto. A lot of stock traders try to bring over their knowledge without any research into actual crypto. But how many successful stock traders avoided research for their normal investments?
There is no such thing as ‘coasting’ in the crypto trading like you can do in the stock market. A good example of coasting relates to high-performing stocks that stay consistent year to year. Disney or Google are not going to randomly bottom out and cause you to lose thousands of dollars. They are the anti-volatile stocks at the cost of having a high buy in per share. For crypto, take the same approach you would take with volatile stocks.
Proper research will prevent you from buying high, but will also clue you in on the right time to pull out. Research serves as a safety net to get out of a bad crypto situation, and as a foot in the door for potential winning investments.
A diverse portfolio will make it impossible for you to lose everything. Even when 90% of your investments go wrong, that remaining 10% will be what keeps you afloat. Betting everything on a sure thing is how a lot of investors create an impossible trading situation.
Portfolios with a singular focus are also open to the worst kind of abuse during market downfalls. When you’re all in on the gas industry, don’t be surprised when a single news story tanks everything you own. And when a new GPU releases to unfavorable reviews, your NVIDIA or AMD shares will pay the price. For crypto, a single tweet can cause the value to rise or fall. When you understand stock diversity, crypto diversity will be a no brainer.
3. Scams Never Let Up
There is no originality in crypto scams after you’ve dealt with the worst of stock scams. Phishing is still the #1 scam, and many investors keep falling for it. Don’t click on unfamiliar links, don’t share personal information unsecured websites, and don’t use apps that aren’t approved by the store. Rogue apps on the Google Play and iOS app store can steal your information – with permission. Since you have to download and manually confirm the privileges of the app, the power of protection is still in the investor’s hands. If it was a stock app that you weren’t familiar with, would you give it full permissions? Apply the same gut knowledge to crypto apps to avoid the most common scams in the world.
Become A Smart Trader
An experienced stock trader knows that they are starting from the bottom with a crypto portfolio. Like any investment, you have to walk before running. Stay humble in the beginning, and you will be an expert crypto trader.