Starting out in cryptocurrency investing is a lot easier today than it was back when Bitcoin first hit the market. Today almost everyone can get involved in trading, of any type, including cryptos, so long as they have the money to get started. It’s no longer the exclusive prerogative of the rich! However, before you get started with any type of trading, you should decide what type of investing best suits your financial goals.
Investors come in two models. Buy and hold investors sink their cash into investments they believe will provide them with a good return down the track, be it 12 months, 12 years, or 112 years. This is an excellent investment model for those who aren’t after a quick buck but would rather leave their investment sitting somewhere quietly earning them a retirement next egg. Warren Buffet is a successful example of this type of investor. Buy and hold investors often also earn money by way of dividends on their investments.
The other investor model is the day trader, or short-term trader. These are the traders who really like excitement in their lives, and have the time and patience to watch the market. Day trading and short-term trading involves buying and selling investments, whether it’s shares, cryptocurrencies or other similar types of investments, rapidly. Very often, these transactions occur within the space of 24 hours if the market conditions are right. Investors buy at one price, wait for whatever they’re trading to reach a predetermined price then hit the sell button.
Once you’ve decided which investment model suits you best, the next step is determining your level of risk. In a nutshell, this is the amount of money you can afford to lose should your trading decisions not pan out as hoped. A cardinal rule here is to never commit to investing more than that, no matter how tempting it might be. You may have a win, or even several wins, but eventually your luck will run out and if you’ve just committed next month’s mortgage payment to the throw of a dice, it’s not a good place to be.
A good safety net, if you want to try your hand at day trading with cryptocurrencies, is to investigate automated trading software like that used in the Robert Downey bitcoin revolution. These programs are smart algorithms that watch the market and ‘learn’ when to buy and sell for best results. The advantage they have over humans, especially in the highly volatile crypto trading world, is that they’re much faster at hitting the buy or sell button! As cryptocurrency prices can rise and fall very suddenly this speed could mean the difference between making a substantial profit, or not. They also free you up to do more interesting things than spend hours hunched over a computer screen monitoring the market.