Things to know about altcoin trading
The volatility of altcoin prices in the market can be a good source of profit, but it can lead to some losses. This is why it is important to understand the fundamentals of altcoins and how they work, as well as what drives some market changes. There are some other points that we at CAPEX recommend before getting started, as well.
Don’t follow unproven methods to profit
Don’t be overly influenced by others when starting to trade altcoins. Because you are not the only trader trying to make a profit, try to avoid letting the input of others (especially non-experts) from impacting your decisions. There are plenty of examples on the Internet, through websites, videos and more, that portray “guaranteed methods to become a millionaire” trading cryptocurrencies – ignore them. Most of the content is generated by promoters who are only interested in driving traffic but who have no real knowledge or expertise in altcoin trading. The best strategy, as with any trading, is to conduct your own research and only make a decision if you feel confident about a possible shift in price.
Only invest what you are comfortable losing
You should also only invest what you are comfortably ready to lose. This is another tip that applies to any type of investment and is a crucial rule to follow. Never borrow money to get started trading altcoins because changes in the market could potentially result in losses and, consequently, debt. Don’t use funds that are earmarked for other purposes such as rent, mortgage or medical care. Instead, plan appropriately and allocate a certain amount of money to invest in trading. Also, using a crypto demo account to practice is always helpful. At CAPEX, you have access to a demo account at all times.
Don’t invest in only one asset
It’s not a good idea to invest only in one portfolio. Although you might have a preferred altcoin in the market, investments are emotion-free. Don’t put all of your investment money into one altcoin because you increase your risk. Instead, diversify the portfolio and target multiple altcoins by carefully analyzing their performance history and expected returns.
Correctly manage your risks
The previous tip goes hand-in-hand with the next one. Always make sure you are effectively managing risks when trading. This means that you need to understand all of the risks involved before getting started and integrate proper strategies to mitigate them. For example, although you anticipate the price of a certain altcoin to move up, it could still move down and you need to be ready with an appropriate stop-loss tool to prevent incurring losses if the price continues to slide.
Conclusion – Trade crypto CFDs at CAPEX
Trading altcoins has become extremely popular as an investment opportunity because of the fast-growing popularity of cryptocurrencies. It is similar to Forex trading in a lot of ways but can also be more complicated because of the risks associated and the lack of decades-long histories.
Those interested in how to buy altcoin should begin by learning how to trade altcoin before making their first investment. It is also important to understand how to properly analyze market trends and adhere to strategies that have proven effective. Sign up today at CAPEX and start practicing in a demo account and learning more through the CAPEX Academy.