It should come as no surprise that good cryptocurrency traders are generally the most well informed. While there will always be an element of timing and luck involved, cryptocurrency trading is a practice that involves lots of numbers and data, and the more you know and understand about the numbers and data, the better a trader you will be.
Whether you are just starting out or you are an experienced crypto trader, the better informed you are, the easier and, hopefully, more successful your trading will be. If you are looking to learn more about crypto trading in order to be the best trader you can be, here are 5 tips for being a more informed cryptocurrency trader.
1. Research what crypto is and how it works
The first step to becoming a more informed crypto trader is to research everything you can about what cryptocurrency is and how it works. Understanding the assets you are investing in is a crucial piece of any type of investment. When it comes to investing in relatively new technology and financial products like cryptocurrency, it is even more vital.
Start with the basics of cryptocurrency and build your knowledge base from there. You can do research on the blockchain technology cryptocurrency that cryptocurrency is based on and find out the difference between Bitcoin and altcoins. From there you can investigate the different categories of altcoins such as mining-based coins, stablecoin, and utility tokens, and then dig down deeper on individual cryptocurrencies that interest you.
2. Evaluate different trading platforms
Trading crypto is a 24/7/365 endeavor with exchanges located all around the world so you can trade almost anywhere and anytime. This also means that there is a good amount of choices when it comes to which exchange you will trade on. Informed investors will compare and contrast multiple platforms to decide which one is the best for them.
For example, you may have been using Coinbase, but want to see how Kraken compares. You could try it out for yourself, or consult a review like this one from Cove Markets that might help you determine whether it suits your needs. When you do this, you will find pros and cons of each platform which will help you pick the exchange that best fits your needs.
3. Get real-time crypto news
Because cryptocurrency trading is an around-the-clock endeavor, news on these markets is reported all the time. The most informed investors stay as up-to-date about all the latest news about crypto. This helps traders make more informed decisions and capitalize on rising and falling prices when they happen.
In order to get the most current, real-time information available about the crypto market, you could spend all day perusing the top crypto news sites, but that is inefficient and time-consuming. The best way to follow all the latest news is with a crypto news aggregator. Platforms like CryptoPanic, CryptoGoat, and Coinna gather all the latest and most pertinent news in one place to help keep you as up to date as possible.
4. Follow crypto leaders on social media
Crypto news aggregators will bring you news, articles, and pricing fast, but for real information and thought-leading opinion on cryptocurrency, the best place to go is to social media. No matter what your favorite social platform is, you will be able to find crypto influencers on each platform to help guide you through the world of cryptocurrency.
You can find plenty of lists that go through all the top crypto influencer accounts, and you should try following as many of them as you can to get an idea of who you like best. To start you off, here are some of the best.
On Facebook, try following crypto millionaire (or possible billionaire) and former child actor Brock Pierce or journalist Tim Hartford. On Twitter, you will find Ethereum founder Vitalik Buterin and the controversial but never dull John McAfee. On YouTube, there is “average dude” Crypto Bobby, blockchain consultant David Gadd is on LinkedIn, and you can follow Girl Gone Crypto on Instagram, where she was recently named female crypto influencer of the year.
5. Practice, practice, practice
For many people, you can read and listen and observe all you want, but the best way to become more informed is to learn by doing. For these types of people, the last tip to becoming a more informed crypto trader is to practice, practice, practice. This will mean different things to different types of people and different types of traders.
For some traders who already have a general understanding and some time in the market, the best way to practice is to invest in small-cap cryptocurrencies before jumping into bigger ones. You can find coins and tokens that trade for just a few dollars or even a few cents on the different exchanges. Trading these for low amounts of money will help you get the hang of trading and a feel for how crypto markets work.
If you are not ready to invest money, there are alternatives. You can find websites dedicated to practicing “fantasy” crypto trading, where you can use real market info to trade without using real money. Some crypto exchanges even offer this feature so that you can become better informed and more experienced before putting your hard-earned money in play.
An informed crypto trader has a much better chance of being a successful crypto trader than an uninformed one. Make sure you stay as informed as possible by following these five tips. You should research the market to learn the basics, evaluate the exchange options, get real-time news, follow crypto influencers on social media, and practice as much as you can.
Any trader, from first-time ones to early crypto adopters, can learn more about the markets, trading practices, and the industry as a whole by following these tips. The more you know, the better prepared you will be to deal with the fast-paced, exciting, and volatile world of crypto trading. Good luck!