With cryptocurrencies hitting all-time highs and news of numerous investors making tonnes of money, it’s no surprise that more and more people are getting interested in investing.
However, with all their volatility and market uncertainties, navigating the world of crypto can get a little tricky, especially for beginners.
Just like any other form of trade, crypto trading is also based on the knowledge of some principles and things that you need to avoid.
To know those things, all you need is this guide.
Not having a plan
The most basic mistake that people make is not knowing their objective of trading. Ask yourself why do you want to invest in crypto. Is it because everyone you know is doing it or do you want to make money? The second question is do you want to invest for the long term or just want to make a quick buck.
While no goal is right or wrong, the absence of one is going to make your break your crypto trading stint.
Not researching enough
Since cryptocurrency is a relatively new phenomenon, every day there are new learnings. The only way to strengthen your footing in the world of crypto is by doing solid research. The first step in this is not getting swayed by anyone’s opinions. Instead of getting influenced by anyone, start educating yourself. The best way is to refer to the best app for crypto trading in India like Coinswitch that not just tells you about it but also keeps you updated with their whitepapers and research videos.
Not knowing the transaction fee
This is not something that most people talk about. But that doesn’t take away its importance. Transaction fees are the charges that you pay to a cryptocurrency exchange for converting your fiat money into crypto and vice versa. This fee varies from exchange to exchange and needs to be calculated each time you trade.
Not accounting for these charges may turn your profits into losses. They are usually fixed. So, instead of avoiding them, try to keep other costs down.
Not choosing the right crypto exchange
A cryptocurrency exchange is a digital marketplace that allows you to buy and sell digital currency. You can convert one crypto into the other or regular currency. Since it offers you the ‘entryway’ into the crypto markets, it is essential to choose a credible exchange. A way to know this is to read its online reviews. The exchange should also have the fees listed upfront. Get to know which all cryptos does it offer for trade. Another thing to ensure is that the exchange must be user-friendly and have resources such as videos and whitepapers to keep you updated on the market trends.
Not diversifying your portfolio
While investing in crypto, every investor wants to maximize his profits while minimizing risks and losses. Investing a varying percentage of your money in multiple assets allows you to achieve good returns even if one of the portfolio items doesn’t perform well. If you are a small and new investor, you may be better off investing in 3-4 currencies. You can choose from Bitcoin, altcoins, and tokens such as Ripple, Ethereum, Dogecoin, and Matic. Before you invest, get to know the conversion rate and matic coin price in India.
While it is great to diversify, remember not to over-diversify your investments. Overexposing yourself may lead to more losses than you may have imagined.
Given the volatility of the cryptocurrency market, trading needs to be done with great care. Avoiding these mistakes and doing due diligence will give you good returns in the long run. Taking the help of a credible platform will help minimize your risks and keep you updated with the market trends.