How to Get Your Hands on Crypto?
Is it time you took the plunge into crypto?
It’s been a wild ride the past 12 years, but have the best times passed? Will prices fall and wipe you out? Can you afford to have the value of your crypto wallet fall?
There has been positive news in recent days besides the big negative of China’s crypto ban. However, it wouldn’t take much to cause a change in market sentiment.
More than One Way to Skin a Bitcoin
Sure, you can buy Bitcoin or any other cryptocurrency that takes your eye. But what if the price falls? You could be seriously out of pocket. And the chances of prices falling are high. Yes, some pundits would have us believe the price can only go up, but others are predicting doom and gloom.
Who do you believe? Nobody – Don’t even dream of going there. There are other ways of profiting from crypto that don’t include maybe losing your shirt.
Crypto stocks are those stocks related to cryptocurrency. Some companies provide services like wallets; others provide products like Bitcoin mining machines.
In the Californian Gold Rush, the people who made the most money were the ones selling shovels.
The best way to make money from the crypto boom is to sell the tools and services crypto traders need.
When you buy stocks you are buying shares in a profitable company that will always have underlying value based on the company’s assets. You can look at stock charts, see previous price data, and base your purchase on logic.
When you buy cryptocurrency, you are buying something where the price is only based on supply and demand; there are no underlying assets, no trading data, only price charts where the past movement has depended on announcements by governments and celebrities.
Most crypto stocks are not stocks you buy and hold for years. These are stocks where you profit by trading. Their prices are volatile, especially when you look at low-priced stocks. Finding the top crypto penny stocks to watch takes research. Google isn’t everything - You need experience and an extensive knowledge of trading before you can identify profitable opportunities in the market.
Invest in paid stock tip services. These will usually give you trades that will work out better than free services. Take advantage of the service’s paid researches – They have been at it longer than you.
Reducing Your Risk
Trading is a risky business, but you can reduce your risk. The best trading platforms will let you set up a stop-loss position. This will automatically sell your stocks if they fall to a value you set. It means you can decide how much you can afford to lose, preventing you from losing everything if there is a rout.
Similarly, decide what profit you can reasonably expect and set up an automatic take-profit position. This removes the temptation to hang on for more, then losing your profit if the market turns against you,
A CFD (Contract for Difference) is a way to bet on whether a stock or index will rise or fall. You never own the asset. CFDs are controversial, but extremely useful because they let you make money even if prices are falling.
Start with a free demo account where you are not putting your hard-earned cash on the line.
A CFD is a short-term bet. Close the contract at the end of the day. Set up stop-loss, and take-profit points where you terminate the contract automatically.
One Good Reason to Buy Bitcoin
If share prices fall, you might think of buying Bitcoin to hold for the medium term because its price tends to rise when markets are falling.
Changing Your Life, One Trade at a Time
Get your feet wet slowly.
- Start following the financial news online and in your newspapers. You have a massive amount to learn BEFORE you even start virtual trading.
- Read, study, and learn how the stock market works. Understand the factors that have caused stock price movements in the past. Get your head around candlestick charts and moving average graphs.
- THEN, create a free virtual trading account at a stockbroker’s website. Use only virtual trading until you are consistently making more profitable trades than losing ones.
- Once you are confident with the steps above, open a trading account with a broker.
- Open a trade in an index. An index gives you a way to diversify your holdings, even with a few hundred dollars. Diversifying is essential to reduce your exposure risk to any one company or sector.
- Close your trade by the end of the day because you don’t want the price to crash while you are asleep, even if you have set a stop-loss position.
- Rinse and repeat Steps 5 and 6.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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