Cryptocurrency is a popular and rapidly growing market that can mean a huge return on investment. These currencies can be volatile and can change for better, or worse in the space of one day. However, with a bit of research and knowledge on how to best invest, you can make cryptocurrency work for you — whether you’re looking for a long-term investment or a short-term profit. Read on to find out more about techniques that can give you the leading edge.
Research
If you’re new to investing in Cryptocurrency, making sure that you do your research before you begin means that you can give yourself the best chance when it comes to making a return. Information on Crypto is available everywhere — if you’re using a platform to invest, you should be able to access everything you need to know about cryptocurrency and your chosen investments through information provided on the app or site, you could also look online to find out more.
You could also use investment insights to make sure you’re investing in the right places.
You should look at the background of a project when making your decision and weigh up whether it is worth investing in. Having an idea of general market trends means that you can give yourself the best chance of reaching your investment goals.
Create a strategy
Many benefits come with making an investment strategy, the main advantage being that you can choose a plan that is most suited to your goals. Following a strategy when investing in Crypto means that you can keep a healthy portfolio in the long run. It means you can avoid emotionally investing and means you’re less likely to make any detrimental decisions based on the condition of the market at that time.
There is a strategy suitable for everyone, no matter your level of investing. When putting a strategy in place you should think about the level of risk you’re willing to take when it comes to your investments; decide how much you are willing to invest, and never invest more than you can afford to lose. You should also think about the length of time you’re looking to invest for, whether it’s to get you to an imminent financial goal or whether you’re looking to build up funds over a longer period. Below, we’ll look at a few Crypto techniques that give you the best chance of making a return.
Buying and holding
Buying and holding is a technique in which investors buy large assets and set them aside for a long period of time. It is classed as a passive trading technique, as the assets invested are left for a while without the investor looking at how the market is progressing.
Buying and holding is a good option if you’re looking for long term investment, and don’t want to play a particularly active part in your investments. However, this means you’ll have to take time and research before you invest in an asset, so you have a clear idea of performance.
Day trading
In contrast to buying and holding, day trading is also becoming more popular with investors. Day trading is exactly that, entering the market for a single day, and leaving after 24 hours. Investors analyse the market before investing, and trade for around a day or sometimes less in the hope that their investment will generate a return. Some of the benefits of day trading include the ability to trade with small amounts, so you don’t have to build up a large deposit that a lot of trading schemes require. It also allows you to become more familiar with cryptocurrency and gain a better understanding of how it works.
One of the main benefits that investors can find with day trading is that it can increase your rate of return. Some benefits come with daily gains, and as the market tends to go up and down by 1% a day, there are successes to be had with this technique. You might even end up making more in a day than you would in a year! There is added risk that comes along with this, but the same can be said for all investments.
Swing trade
If you’re not investing for the long haul, but you’re not ready for the intensity of day trading, you can opt for the middle ground with swing trading. This is another example of an active strategy that involves investing for less than a month.
This technique is recommended over day trading if you’re a beginner, as it allows more time for you to get to grips with the fluctuations in the market, and it also means you have more time to decide than you would with a day trade investment. Again, anyone looking to take part in swing trading techniques must do their research before they do so, to get a better idea of the market.
Choose long term
When it comes to any type of investment, returns are never guaranteed. The volatility of the Crypto market means that you’re more likely to lose money on the short term, daily trading than you would with a longer-term investment. Although it might seem tempting to try your luck in the market with a day trade, due to the fact they only require a small amount to get started, losing money is highly likely unless you’re experienced. So, if you’re new to Crypto, go long term and see what the market has to offer you.
