Every day billions of dollars move in global financial markets, read traditional and disruptive as the cryptocurrencies, which has proven to be a business in broad growth with a well-marked future ahead.
From basic concepts to available platforms, strolling through investment products and placing orders for benefits, have been some of the issues dealt with in a clear and simple.
While we exclude ourselves from responsibility for the good or bad decisions that each individual can take in this fascinating world of trading, we feel the need to guide a little to the reader about the risks and benefits that many crypto-millionaires brings The new era to know in a general way that this activity is so fascinating.
It Is the reader’S responsibility to deepen the knowledge he considers necessary to develop this activity as his main source of income and/or amusement.
In order to put an end to our special series, this time we will summarize the practical advice that a trader should choose when performing any such operation. Without meaning, that they are a specific rule to follow, due to the complexity of particular case and especially to the high volatility unique of the cryptographic ecosystem, we want it to be a guide to take into consideration when you are immersed in the world of Trading.
Already in previous opportunities we have been emphatic with this important topic and we consider that it is the key of any development of an activity in general. Without knowledge there is no future and in the darkness it is impossible to see the signals, analyze the scenarios and be able to make the correct decisions that trigger in a successful operation.
Everyone at the trading is looking for something: benefits. Nobody bets their capital to lose. Therefore if you want to have profits in little or large quantity, but after all, PROFITS, it is imperative and imperative to educate yourself about the cryptographic asset in which you want to invest money, either through an CFDs, ETF, or simple Exchange.
The 2018 left a lesson to many traders: betting on empty projects only generates losses so you as a trader must look for as much information as possible and available as to the project or Cryptocurrency on which you want to invest: discord, GitHub, networking activities, whitepaper, Roadmap and volume of trade; These are some of the key metrics to know where we stand and what we face, beyond their simple price chart.
Choose a good Broker/Exchange
Who has not heard from Mt. Gox? Or recently from QuadrigaCX?. Because Although the offers are many in the trading business, the difference with traditional markets is that it is a new market, where there is still a lot of legal absence for regulations and faithful compliance with healthy financial policies in Some countries, it is possible that in the past, present and future we can see cases of bankruptcies, hacks (?), scams, among others; of some cryptocurrencies Exchange that you never thought could happen.
It turns out that like traditional markets, in the cryptographic world there is a false perception of being «untouchables» and some supporters of the trade of evil are engaged in criminal activities that put at risk in some cases to the loss of funds of Many traders.
Therefore, it is imperative that you evaluate the regulatory compliance parameters: KYC, AML, federal regulations, etc.; Volume of trade, contact details, addresses, etc. Everything that allows you to give you security (not the certainty) that you can not be the subject of a scam or loss of funds by third parties without the corresponding compulsory support by the operator.
It Is important that metrics like activity, development and volume of trade (key point) are carefully studied and that you can effectively have within the Exchange policies some consumer protection clause in case of loss of funds by Hacks, security failures, bankruptcy, etc.
A tip is «do not leave your funds in the wallets of the platforms.» For This use wallet in cold type hardware or paper, where YOU are the owner of your private keys.
Diversify your Portfolio
It Is Common to hear cases in the world of trading of people who risk all their capital to a single asset. In many cases despite having technical knowledge that supports any scenario, remember that you are a TRADEr not a PROPHET; And therefore in this volatile world of cryptocurrencies; This unique property forces you not to invest your entire capital in a single digital asset.
In General You should diversify your investment portfolio thinking about the three scenarios of investment horizons: short, medium and long term; With this you can always achieve liquidity in your operations and safeguard against any failed operation that can be compensated by its counterpart in another horizon.
I would Even advise that your venture capital ready for these scenarios, give a higher weighting in short; Because even though Bitcoin and its friends have had in the last four months a little volatile scenario in their prices with lateral movements.
Historically the cryptocurrencies change in short suddenly in a matter of minutes by swinging minimum to maximum or vice versa. Short-term Operations will allow higher profits and more liquidity, but with due Stop Loss to protect against losses.
Beware of Leverage, margin trading and Rollover
In The online broker There are these concepts that were carefully designed to engage the trader, offering the opportunity to generate greater profits without ‘ placing greater capital ‘.
Unfortunately, the results are adverse and have a why. No Exchange Company or online broker will give you free money for you to benefit and go out with your money more than the company.
So simple, so if you are willing to have a larger capital to diversify your products, avoid excessively using high leverage (> 1:20), do not extend your contracts by more than twice due difference and even more avoid debt With loans in the same Exchange.
Statistically This is like playing decentralized roulette; While the winning options are higher than the traditional one, you must be very conscious and focused not to ‘ fall into the trap ‘ of a greedy trader and consider that because others have achieved it and/or because you have had good performance , this scenario will always be the rule.
Remember that excessive leverage in bad plays triggers the total loss of all your funds and the platforms clearly warn that CFDs in particular are products with odds of more than 85% loss of funds.
So use the tools but with common sense.