Starter Advice for Students: Many students now have some decent amount of money savings they would like to invest to make sure after graduation they have a worthy income for a living. This is how the interest of students in crypto has arisen.
First of all, you should realize that learning to invest in crypto takes a lot of time, so find the most suitable for you dissertation writing service to make sure you don’t get in trouble with your writing assignments in college. Stock up on patience, time, and passion to start this interesting journey of crypto investing.
Investing in cryptocurrency initially implied some element of randomness in the formation of the price of the asset. Of course, the basis remains unchanged – the balance of supply and demand – but the value of virtual coins can change in any direction, at any moment, and for the smallest of reasons.
For example, the volatility of bitcoin in 2021 was 64%, and its price could rise or fall by 25% in a single day. By comparison, the annual volatility of the S&P 500 index was 17% and of WTI oil 54%, but never more than 10% for a day.
Therefore, investing in cryptocurrency requires a special approach to trading that differs from other markets. To avoid unfortunate mistakes, familiarity with the 5 rules of investing in virtual assets will help.
Focus on a long-term strategy
Investments in cryptocurrency are wise to calculate and plan for at least 2 years. If you have $5,000 to spare today, but there is a high probability that you will need some of that amount at any time, then investing all that money in cryptocurrency is the worst possible decision. In that case, it would be better to start your own business as a student which might bring you profits much earlier.
Invest only the amount that you can afford to “lose” for a couple of years. Why is that? Simple. Judging by the bitcoin value graph – the main indicator of the state of the crypto market – the periods of growth and decline alternate with such a frequency.
Investing in cryptocurrencies does not like hasty decisions and actions. More often than not, ill-considered actions were taken under the influence of a momentary impulse that lead to losses. Sometimes it is enough to wait just a few days – and the market will go up, or, conversely, there will be an opportunity to buy the asset at the most comfortable price.
Follow the plan
Even professional traders are influenced by FOMO (Fear of missing out) – the fear of missing out on an opportunity to make money here and now. For instance, it’s hard to resist buying an asset that has been rising steadily for some time.
It seems that it is necessary to buy such a coin right now, and after some time to sell it at a profit – it is enough just to wait a little longer for even more takeoff. And greed does not allow it to stop in time, because the asset grows as if given a chance to earn a larger sum. As a rule, a correction occurs soon and then the thoughts are quite different – the need to sell urgently to save something from the initial investment.
And the more gambling and emotional a person is, the more often he will lose investments in the movements that happen almost every day on the crypto market. Especially in the period of bitcoin growth.
Professionals advise you to develop your investment plan and stick to it clearly, despite the market situation. For example, just buy a cryptocurrency for the same amount – every week or month. It doesn’t matter if the market is rising or falling – in long-term investing mode, this strategy will bring good profits after a few years.
New cryptocurrencies that have just entered the market are especially dangerous in this regard. Often such assets are artificially pumped and dumped – either by the developers themselves or by market makers – making money on inexperienced users. They buy up a coin at the start of sales, pushing its price to the sky.
And then the FOMO factor comes into play. More and more newcomers, observing the unrestrained growth of a “promising” coin, begin to buy it themselves. They don’t realize that now they are pushing the price up with their own hands. And then the whales start to sharply drop their cheaply bought coins, thus bringing the value of the cryptocurrency to a minimum or even to zero.
Only time can show the real value of an asset. If a project has existed for several years, is constantly developing, and is actively traded, it is possible to invest in it. Otherwise, the risk is unacceptably high.
Do not get carried away with TA indicators
There is a huge number of indicators that are used in technical analysis. And when you consider that each of them can be further customized by changing some parameters, there are a huge number of options available for tracking.
The best traders know very well that a proper understanding of the market situation is much more important than using a couple of dozen indicators, which often contradict each other. Therefore, experienced players follow only a few of them – those that most closely reflect the market situation – based on their own experience of using them.
It’s impossible to claim that any indicator is more accurate than the others in all cases and situations. It is better to master two or three of them in detail and learn to understand what they show us than to look at a dozen of indicators with a clever look, trying to make sense of this chaos.
Admitting mistakes in time
There are no perfect traders-all of them make blunders and mistakes. Mistakenly identifying the “bottom” level, poorly chosen moment to enter or exit a position, incorrect assessment of potential – all these things happen to everyone. There are no exceptions. Therefore, you should not immediately increase your investments in this or that cryptocurrency, which seems more “successful” for investing, to compensate for your mistake.
At such moments it is best to close the charts site and forget about investments for a few days. Psychological trauma from unsuccessful investments negatively affects the impartiality of assessing the market situation.
Even when it seems to you that you can get your losses back in a guaranteed way – right here and now – it is better to miss such an opportunity than to make the situation even worse with a 90% probability. It’s been proven time and time again by millions of traders all over the world.
It is better to go for a walk, spend time with family or friends, check subreddit to find some trustworthy services that will help you with college homework, do something else – do everything possible to let the situation go. And it’s wiser to think about what led to your mistake when you have a clear head.
The truly successful traders are not those who never make mistakes. They are the ones who know how to acknowledge them, as well as to use the experience gained in the future, not allowing the repetition of negative situations already passed.
Invest in Leaders
This advice may not seem too obvious. Why invest in the top cryptocurrencies? After all, they are not able to bring as much “X” as potentially young projects will.
But CoinMarketCap leaders are less volatile, they are more cash-liquid than their younger and perhaps more promising competitors. It is better to earn +10% to deposit than to lose 20% due to strong fluctuations or inability to close the position in time.
And the rush to sell bitcoin, ethereum, or ripple is not worth it. Investors should buy these “blue chips” of the crypto market. Of course, it should be done with an eye on the market situation. As a result, even the top cryptocurrencies in a period of market activity show a growth of 200-300%, and even higher. The main thing is not to be afraid of a prolonged fall and stay in the asset until its growth.
Any rules are not dogmas
Every investor must understand one simple truth. If some universal rules of investing money in our world would guarantee only successful deals, many traders would be using them during the whole existence of the crypto market.
And this would inevitably lead either to the loss of their relevance or to the disappearance of the market itself. After all, there are no winners without losers. And when some people make money, others must suffer losses.
Therefore, you should not blindly follow the advice of someone, regardless of the experience of this person. You can take his opinion into account, but you should always strive to assess the market or an asset independently, study polarized opinions, to use alternative tools for analysis.
If you see that the strategy is no longer working, change it. Maybe even despite earlier decisions. But, again, this should not be done spontaneously, but after enough time for you to extinguish your emotions and eliminate psychological factors.
The most important thing to understand is that no one is responsible for your money but you. Therefore, every decision must lead to meaningful action with clear answers to the three questions: “What?”, “How?” and “Why?