Despite crypto being in the mainstream for over a decade now, many people still do not know even the basics about how to use coins, let alone trade them. We decided to give you the best trading tips that will be useful to both beginners and experienced traders. If you are interested in earning money by trading crypto and nothing else, this guide will be quite interesting!
Here are our 11 best trading tips for beginners!
#1. Follow the trends!
It is quite important to stay up to date with any developments in the industry that may cause any commotion in the community. For example, a single tweet by Elon Musk managed to increase the value of Dogecoin by about 60%, while his appearance on the Saturday Night Live show managed to decrease it by 30%. Such incredible movements in price are possible and may happen because someone tweeted something.
When trading crypto, do not forget to regularly check social media for relevant news. It is also important to join massive online forums like Reddit and interesting Discord servers. With enough information, you will be able to predict some trends and capitalize on your forecasts earlier than those who slept on little details that you saw.
#2. Use TradingView!
There are hundreds of TradingView tips and tricks that we could tell you, but the main one is to use it! Many investors prefer sticking to interface solutions that are native to the exchanges they are using. While many companies have trading terminals with rich functionality, nothing beats TradingView in terms of versatility and flexibility.
This terminal can be accessed from any PC or smartphone, has a multitude of useful tools for technical analysis, and offers a wide range of integration opportunities to people who want to expand their analytical arsenal. It is a good idea to learn more about TradingView since it has so many applications.
#3. Learn technical analysis.
To continue the topic of TradingView, we must mention that many people do not dedicate enough time to technical analysis and believe that fundamental knowledge about markets is enough to make good predictions. However, cryptocurrency is very volatile and often changes its course regardless of what economic indicators may suggest.
Cryptocurrencies are not tied to national currencies and do not have any direct connections to national economies that often define how stocks, fiat currencies, and commodities behave in the international arena. One of the best trading tips for crypto is to learn more technical analysis. There are countless courses and many professionals offer mentorship. You can also just use YouTube!
#4. Diversify, diversify, diversify!
It is easy to give up on the glorious idea of holding a certain asset. Bitcoin fanboys spend their livelihoods on buying BTC and talk about holding to it until the world collapses! However, you should be smarter than this. Make sure to invest in a variety of assets. If you are not interested in expanding your portfolio beyond crypto, buy different coins and employ DCA strategies to make sure that you don’t put all your eggs in one basket.
Having 30% BTC, 30% ETH, and 30% other coins is a good balance and much better than holding only bitcoin. Remember, despite being a massive network, it may lose its value overnight due to some unforeseen circumstances. Having another asset to hedge your risks is always a good idea. You should not invest only in crypto, but some people just cannot resist the urge!
#5. Staking is often profitable.
Do not tunnel-vision on a single asset and one type of trading. There are different ways to make money. Here’s one of the overlooked tips for trading crypto: do not leave your assets idling. If you purchased some coins and do not plan to sell them in the nearest future, stake some of them using a reliable platform that accepts your asset.
You will simultaneously contribute to a liquidity pool of a project you like and receive rewards. Rewards in native tokens may not yield you huge profits in fiat or your “core” coins, but you will receive something, at the very least. Whenever you have excess assets or coins that you plan to hodl, don’t forget to check whether you can stake your funds!
#6. Take small wins over long holds.
If you see some of your assets in the green, don’t be greedy. Take profit when you can. The problem with crypto is that it is prone to volatility and downtrends happen just as often as bullish movements. Don’t lose your assets by holding them for too long. Instead, accumulate smaller profits over time. If you don’t want to sell everything, liquidate your assets partially to mitigate some risks.
#7. Have two wallets!
One of the best tips for trading crypto that we can give is that you should never compromise security. There are countless examples of how someone lost access to their wallet or got tricked by a hacker. The solution is very simple: get to wallets. One will be used to safely store your purchased assets. Another will be used as an intermediary for transactions with any third parties.
While many exchanges still prefer to hold your funds until you withdraw, you should always try to move any purchased assets to a storage that does not have any apparent vulnerability.
#8. Don’t be afraid to try new things.
The majority of traders are doing their business on Binance. The reason why so many people choose this particular platform is simple: versatility. This exchange has a ton of different assets to play with and releases new products frequently. Additionally, it has an ecosystem with many DeFi projects and NFT games hosted in it.
One of many trading tips on Binance is to check various obscure assets. This is a good habit for those who use arbitrage or GRID bots. At the same time, you may find a coin that has the potential to “go to the moon”. Purchasing coins that cost pennies now is also a good idea.
#9. HODLing is still a thing!
Buying the dip and holding until your assets cost more than you could have ever imagined is one of the most commonly vocalized trading tips for cryptocurrency. Indeed, it is a good idea to buy coins cheaply and wait for a long period until they gain value. It is especially true for giants like ETH and BTC. These assets will likely continue existing and appreciating in the future!
While many consider the crypto industry a good environment for speculative activities, the best strategy has been and always will be holding to your assets through thick and thin.
#10. Automation is a key to success!
Humans have their obvious limits. You cannot go against your body and have to spend some time sleeping, resting, and eating. Physiological limitations make us quite inefficient in an environment that encourages 24/7 buying and selling. One of the top tips for day trading is to employ automation as much as possible. The price of most automation services is minuscule compared to the potential value they can generate if used correctly.
Automation is all about scripting. You can set up a pattern of purchasing assets under certain circumstances and conditions. Again, you will need to learn TradingView and its countless features to be as efficient as possible. This terminal is often integrated with automation vendors allowing you to use signals from technical indicators to fine-tune your scripts.
The process looks like this:
- TradingView indicators pick up conditions for a good trade and send signals to the bot.
- The bot receives signals and immediately places orders on exchanges.
- The order is executed instantly via API on an exchange that you chose.
Most modern exchanges have API to integrate with third-party companies that offer automation services. You will be able to use your account on Binance, KuCoin, CoinBase, or any other exchange to benefit from a large variety of automation tools.
#11. Specialized bots for the win!
While scripts often bring immense value to active traders, there are solutions for those who want to make money passively. Arbitrage and DCA bots are good examples of tools that can be employed to generate income without your active participation.
- Arbitrage bots connect to two or more exchanges and monitor the prices of selected assets. When a price on one exchange deviates, the bot places two orders shorting the asset on one platform and longing it on another. You pocket the difference.
- DCA bots slowly add assets to your portfolio based on an algorithm that calculates the optimal price for the asset that you plan to hold for a long time. Distributed-cost average is a good strategy for hodlers who want to incrementally grow their portfolios.
Other good crypto day trading tips and strategies
Don’t buy when the price goes down. Yes, volatility and price corrections are a thing. However, some downtrends may last for months if not years. A long-term holder will not think much of bearish markets and just shrug, but day traders should never dismiss the possibility of entering a very long period of going down.
Never go all-in. It is especially true for marginal trading where you can lose everything on a leveraged position. Instead, try to limit your one-time order to 5% — 10% of your portfolio. Do not risk losing everything on a single deal that went wrong.
Don’t ever fall for scams! When dealing with emerging technology, considering every single new product or a sudden opportunity to make money easily a fraud is a good plan. There are thousands of ways an inventive scammer can trick you. Be on alert at any time!
Some final thoughts
The crypto industry is still very young. Despite having millions of users, massive corporations, and a value measured in billions of dollars, it is not without its flaws. Remember it when thinking about the best way to use your money.