You can never truly predict what’s going to happen in the stock market let alone the cryptocurrency market which is the most volatile market in the world. However this volatility provides a great opportunity to make serious amounts of money! The market can go up 20% in one day and also go down by the same amount the next. For this reason when investing in cryptocurrencies in return for an expected profit it is wise to carry out research beforehand, these areas include:
- The developers who are they? What previous success and experience do they have?
- Track their progress, announcements and roadmaps.
- Track their price movements.
- What is the purpose of the currency and company, and does it fill a gap in the market.
- Don’t buy on emotions i.e. FOMO Fear Of Missing Out.
- Look at on-chain data i.e. market capitalizations, circulating supply, transaction speeds etc.
- Keep-up-to-date on social media i.e. Twitter, Facebook, Instagram, YouTube, Telegram, Reddit, etc with what other traders, investors, crypto enthusiasts, experts and developers are saying.
- Have a plan and strategy, what price will you sell at, and how much will you sell?
- When investing in Cryptocurrency don’t invest thinking of the immediate return you can get, invest thinking that if you lost this money, it won’t affect you too much. So never invest with all of your money but invest with what is left over after paying your bills and savings for any unexpected emergencies.
- Use stop losses and limit orders so you can sell and buy at certain prices even when you’re not keeping an eye on the market. This safeguards your investments as you take profits as the cryptocurrency goes up or you sell if the cryptocurrency goes down by too much. Similarly, it allows you to buy at cheaper prices due to the volatility of the market you can accurately predict that the price will probably go up or down by 5-10% within a day.