Many millionaires are being spawned due to the cryptocurrency boom. As many as 100,000 people have 1 million or more bitcoin stashed away, according to a crypto research firm. Bitcoin isn't the only cryptocurrency creating financial freedom for folks, though.

Other cryptocurrencies like Ethereum, Cardano, Dogecoin, and more have made a lot of money for Americans and others worldwide.

But before you jump on the bandwagon and start "buying up" the market, read the article below on the most important crypto trading tips to follow. This way you won't end up losing your shirt in the market before making your millions.

1. Diversify, but Don’t Over Diversify

Every time you hear of a new cryptocurrency, don't get excited about getting in on the action and buy it up. Do some research before plunging into the deep end with new cryptocurrencies.

Not only do some of them not last long on the market, but you also have no idea of their long-term prospect. This doesn't mean that you shouldn't diversify your crypto portfolio; it absolutely does.

Don't focus your entire portfolio on one or two cryptocurrencies, unless they are the big ones, like Bitcoin and Ethereum.

2. Don’t Get Into FOMO Mode

Beginner investors usually tend to rush around buying cryptocurrencies based on random news they might hear or a friend who says that a new crypto coin is going to "hit it big." Don't get into Fear of Missing Out (FOMO) mode when it comes to investing in crypto.

Crypto investments are so much more volatile than stocks or real estate, that you will need to be extra careful when purchasing new unknown crypto coins. And you can't do it just because you are afraid you are going to miss out on potential millions.

3. Set up Automation Buys

The best way to start with crypto investments is to begin small and automate your purchases. It's easy enough on most crypto trading platforms nowadays to set up automatic recurring purchases of your preferred cryptocurrencies weekly or monthly.

This way you will take advantage of dollar-cost averaging (coin-cost averaging in crypto terms), and you won't have to worry about missing out on the lows. Also, you won't have to move money into your account every time you want to purchase crypto - it will just happen automatically at a cadence you prefer.

4. Think Long-Term

Crypto is still in its infancy as an investment, but that doesn't mean that you can't think long-term when it comes to investing in it. Don't become like so many others who are constantly getting in and out of the crypto market, losing their mental health in the process.

Stay calm, steady, and grounded on the crypto investment path. Invest in solid stable coins with the idea that you are in for the long haul.

5. Invest Only What You Don’t Mind Losing

Crypto can be a gamble as much as any other volatile investment. Not that you will definitely end up losing everything you put into crypto, but as with tech stocks, you have to go in with the assumption that you might end up losing it all.

So only invest in crypto what you can afford to lose. That is, if you are going to retire soon or need your investments for your child's college education soon, don't put that money into crypto. Be sensible about it.

6. Stop Following "Gurus" Online

Are you following an 18-year-old on YouTube because they have got crypto all figured out? Or maybe you are following several news channels that talk about crypto investments all day long.

Whatever it is, never blindly follow any experts' advice online or offline, without doing your own due diligence. There is so much information online about crypto investments that you can't use ignorance as an excuse any longer. Don't be lazy about it and research each cryptocurrency before investing in it.

7. Don’t Buy Because of Fear or Greed

The two biggest enemies of any investor are fear and greed. If you are going to use these two as compatriots when investing in crypto, then you are going to get in big trouble.

Don't get out of a crypto position because some sensational news has caused you to have doubts about your investment. And do not put all your money into a cryptocurrency because you have been told it's the next big thing and you don't want to miss out.

Both fear and greed will end up leading you astray. Follow the next tip and use strategy rather than these emotions to make your investing decisions.

8. Always Have a Strategy in Place

Before you get into crypto investments, figure out what kind of cryptocurrency strategy you wish to follow and then stick to it like glue. No matter what happens in the market, no matter how fearful or greedy you feel, stick to your guns.

If you feel like your strategy isn't valid any longer, then spend some time building a new strategy and follow that instead. Don't just willy-nilly jump from one strategy to another, depending on your mood and the news of the day.

Unsure of what strategy works for you? Start keeping a trading journal. Write down all your successful trades, and figure out why they worked for you.

And then focus on all your failed trades and think about why they didn't work out. This way you will learn more about your crypto trading style and what works best for you. Also, you will learn from your previous mistakes, which is something a lot of beginner investors don't do.

9. Don’t Cash Out Right Away

This goes hand in hand with the tip above. Depending on your strategy, you will get out of a position when it's reached the goals you set for it.

But you don't want to cash out right away when you have even a little swing upwards. Taking bits and pieces of profit in such a stress-filled situation isn't the way you want to do crypto trading long-term. It's going to result in a lot of headaches and pain for you.

Think strategically about when you want to cash out. If you aren't familiar with technical trading or indicators yet, then consider doing a course on it. Or hire someone who is familiar with it and who can guide you on this crypto trading journey.

Remember that you don't have to do it all on your own. Especially nowadays as crypto trading has become more mainstream, there are lots of valid experts out there who know what they are talking about when it comes to crypto trading. They can help you create a strategy that works for your particular situation.

10. Avoid Swing Trading

Day trading or swing trading is quite common in the crypto field, since cryptocurrencies go up and down quite a bit just in a 24-hour period. Unless you have all day to watch your positions and no other obligations to take care of, it's not a good idea to day trade crypto.

It's a well-known stat in the market that only 10% of day traders are successful. That is, 90% of day traders lose money!

Instead of trying to be part of that 10%, you would be better off building a long-term strategy where you buy and hold solid crypto coins. This way you don't have to tear your hair out every day trying to open and close positions at the right time. Timing the market in this manner is hard for experts, so it would be almost impossible for beginners.

11. Remember the Crypto Market Is Still New

As with any new asset, you will want to be careful stepping into the deep end with crypto. The crypto market is still only a decade or so old.

Bitcoin first started in 2008, but truly, crypto trading as you see it has only been around since 2012 or so.

That's why you will want to tread carefully and invest a little bit to start with. As time goes on and you learn more, you can invest more, but nothing that you can't afford to lose.

Crypto Trading Tips for Anyone Who Wants to Start Today

Be cautious when you get into crypto trading, but not so cautious that you avoid it altogether. There is money to be made in crypto investments if you do it right.

Follow the crypto trading tips laid out above diligently, and don't let anyone convince you otherwise when you are trying to follow your trading strategy.

If you would like to invest in a cryptocurrency hedge fund or learn more about what we have to offer you in the crypto growth investments field, then contact us today.

Learn More: Take the crypto quiz

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Last updated June 1, 2022

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