With Bitcoin (BTC) prices fluctuating over the past weeks, it’s easy to understand how confused the people entering the world of cryptocurrencies might be. Don’t worry, we’re here to explain everything.
The main issue for most people is this: when is the best time to buy? You might feel that you understand how the trends work but, before anything else, we should double-check whether or not we’re really ready to start trading crypto.
Things to Consider
First things first, how much are you willing to risk in the market? That should be one of the first questions you ask yourself before you begin. Given that crypto trading has become a popular money-making trend, it’s perfectly reasonable for you to expect to see a big number in your cryptocurrency wallet immediately.
Do Your Own Research
While there are a lot of people presenting themselves as experts, we have to admit to ourselves that cryptocurrencies are still relatively young. What that means for us is that as much as we’d like to understand everything, there will be times when something unexpected happens.
One case you should consider is how cryptocurrency value tends to follow the level of interest that the public is currently giving it. We see this in how a simple tweet from a popular figure like Elon Musk can create such a big impact.
That said, it’s important to determine if the money you’re willing to invest in crypto trading is a manageable amount. After all, you wouldn’t want to lose everything on one bad trade.
Understand the Risks
At this point, you might be expecting us to tell you to study some formula or equation. The thing is, with Bitcoin’s potential-both good and bad, the best time to buy it is when you’re ready to spend.
So how do you deal with this problem? Well, the best way is for you to define the boundaries of your crypto trading. This is the part where you’ll have to follow the trends, but consider this as a necessary step in identifying your limits.
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The Best Time to Buy Bitcoin
We know; it’s scary the first time you buy cryptocurrencies. The key is in how well prepared you are before you get into it.
What Pays Off
Formulating your own strategy based on your own research is the best way to approach how you’ll be participating in trades.
One popular strategy is the dollar-cost averaging method. This will have you buying small amounts of cryptocurrency once you reach a certain amount. Yes, the prices you’ll be buying won’t always be the best, but your average expense should make things more reasonable over time.
The great thing about this strategy is that these days, it’s pretty easy to quickly purchase Bitcoin. That means no more worrying about participating in trades at the last minute.
The Ideal Time to Trade
If you’ve tried searching for tips on the exact time of the day to trade cryptocurrencies, you might notice some inconsistency with what people suggest. Others might say that the best time is at the start of the day in the US, while others might try to trade later in the day.
The thing is, it might depend especially on the specific currency you’re trying to trade. Remember what we said about doing your own research? It doesn’t have to be too definitive. Try to note when prices are at the lowest and track that over time. You should be able to identify the best time for you.
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Things to Avoid
Now that we’ve discussed how to prepare for crypto trading, the next step is to identify habits that you should avoid making. If you find yourself falling for these misconceptions, it’s high time you remind yourself of what you stand to gain when you trade smart.
FOMO
The fear of missing out (FOMO) is what drives a lot of bad trades. Simply put, trading under the influence of FOMO happens when you follow a trend only for it to backfire.
It’s easy to empathize with these people. It comes from the mindset where people might say, “I wish I had bought Bitcoin in the first place! I would have been rich by now!”
The trick is to not dwell on it. Missed a good trade opportunity? That’s fine; the key is to learn from that mistake. Dwell too long on it and it only might affect your trading behavior negatively.
FUD
Fear, uncertainty, and doubt are the three main factors that might force you into a bad deal. To be fair, many people buy into this because of the volatile nature of Bitcoin prices. That said, we have to accept the fact that Bitcoin, and cryptocurrencies in general, are still somewhat new.
Take note, crypto traders, approach each trade with confidence. Allowing FUD to creep into your trading will only lead to miscalculated trade offers, doubtful trades, and regretting your financial decisions.
The Bottom Line
So here’s the situation: cryptocurrencies are a great way to make money, but we have to keep in mind that there will always be risks, as with anything where you stand to gain a lot. The key is to prepare by doing your own research.
While it is perfectly normal to follow the advice of experts both online and offline, the point is that we can’t avoid uncertainties. Do yourself a favor by creating and following a strategy.
The world of cryptocurrencies may be confusing, but it is a great opportunity for both the experienced and the inexperienced. Give yourself the advantage by learning more about peer-to-peer crypto trading on Paxful’s blog today!