Few Key Questions for Those Looking to Get Started in Crypto Trading

Trading in financial instruments across different asset classes, particularly the cryptocurrencies, has exploded in the pandemic era.

12:11 18 November 2021

A lot of factors could be at play for this massive surge of retail participation in the markets, some of which include lockdown-induced ennui and the availability of surplus money coming in the form of stimulus packages. Whatever the reason may be, more and more people are getting involved in trading financial instruments and cryptocurrencies like Bitcoin, Ethereum and whatever they could get their hands on.

 

Furthermore, the massive surge in trading activity across the globe is punctuated by an unprecedented increase in the number of first-time investors. Buoyed by the bull run of stocks in different global markets and crypto markets, more and more people are now looking to jump on the bandwagon and grab a share of the pie (the returns on offer are crazy). The rise of a fresh crop of influencers on social media, who show off their luxury lifestyle and wealth built on the back of trading cryptocurrencies, is supposedly another key reason why retail traders and investors are rushing in the way they are.

 

Although it is generally very encouraging to see fresh and young investors entering the market to seek experience and build their portfolio from the ground up, there is a strong concern among financial experts that newbie investors could make risky investment decisions in the present circumstances where people fancy making a quick buck trading crypto assets recommended by influencers on Twitter, YouTube and TikTok-- as against taking advice from a personal financial advisor or having a solid financial plan in place to bail them out just in case the markets nosedive.

 

If you’re new to investing in cryptocurrencies and don’t know how to get started trading or investing in one, here is a primer to align yourself well and set yourself up for success on your crypto investing journey.

 

Nothing goes through the boom to bust cycle dramatically, dusts itself off and begins to surge like the crypto market. It’s highly volatile but it’s worth the risk and there’s a good chance to make a good amount of money for yourself, if you know what you’re getting into and have a well-thought-out strategy in place. Here are a few questions to get you thinking about your investment in bitcoin.

 

• Do I have a strong understanding of how cryptocurrency works? Do I know what I’m dealing with?
  
  
• Do I feel like investing because I don’t want to miss out on making money in this rally?
  
  
• How sharply has the price moved now compared to a few months ago? Is it likely to continue going up at this rate?
  
  
• What cryptocurrencies given their current valuation fit in well with my investment plan and risk for appetite? Say I invest in some bitcoin now for the short-term with a view that it’ll sell for much more later. Will there be enough people showing interest in buying bitcoin when it’s trading at a higher price?
  
  
• Is the level of risk I’m going to assume manageable?
  
  
• What would be a good amount of money to invest to begin with?

 

Consider these questions and be ready to invest only if and when you can find convincing answers to most of them. In any case, start with a small portion of money from your disposable income. Don’t put in more money than you can afford to lose.

 

Figuring out how much to invest is just one piece of the puzzle. Next you have to pick a way to invest in or trade bitcoins or the cryptocurrencies of your choice. Thankfully, there are a lot of ways in which you can invest or trade with bitcoin and other top cryptocurrencies. Some people pick out sophisticated cryptocurrency trading apps like bitcoin code to directly invest into cryptos, while some prefer taking the conservative route of buying stocks of companies that take cryptocurrency as payment in exchange of their products or services. To each their own. Figure out what works best for you and go ahead.

 

Having said that, there are plenty of advantages to having an intelligent crypto software that alerts you on the best times to enter and exit the market. Designed to be an end-to-end solution for users wanting to navigate through the maze of crypto markets with clarity, these algorithmic trading software packages are easy to use, and provide better security, flexibility, and a higher degree of control. As someone who’s just starting out, you’re better off finding an algorithmic crypto software that does it all for you. All you need to do to get started is register on the site with an account and add a deposit. Voila. You can create the rules you want and have the intelligent algorithm built into the software place trades for you. Some apps allow you to toggle to manual so you can call the shots yourself, as well.

 

Bitcoin, as an avenue of investment, has proven to be phenomenally successful for hundreds of thousands of people. With the bitcoin continuing to make an all-time high (just shy of $70000 recently in its recent run), the crypto revolution is here to stay. So, take a look at all the key questions listed above and find out how investing in or trading bitcoin today can help you accomplish your financial goals and push you one step closer to achieving financial independence. Estimate what would be a wise investment to start off and put that money into the markets. If the recent mad rally of bitcoin and other assets after the July sell-off is any sign of things to come, cryptocurrency markets have a lot left in the tank and there is a long way to go.