What rookies need to know before they start crypto trading

Although cryptocurrencies have only been around since 2009, this digital asset has gone on to take the financial world by storm and has helped to create an entire new class of financial instruments. In the little over a decade since it was first launched, it is now estimated that around 1 in 10 people invest in cryptocurrencies.

This is a staggering achievement for such a short amount of time and speaks to the broader interest that has been generated about cryptocurrencies in recent years. Far from being an obscure technological niche for a few tech-savvy traders, cryptocurrencies are now a truly international industry with millions of traders around the world, in addition to the many hundreds of billions of dollars’ worth of financial assets it has helped to create.

The seemingly ever-increasing profile of cryptocurrencies has helped to create a new generation of traders and helped millions around the globe to take control of their financial futures in a very direct way. At the same time, many of these novice traders often find themselves feeling inundated with information and overwhelmed at the thought of planning and executing a crypto trading strategy.

If you are planning to invest in cryptocurrency for the first time, it is important that you fully appreciate the venture you are undertaking before risking any of your hard-earned cash. With this warning in mind, let’s take a look at some of the most valuable information rookie traders need to know before they start crypto trading.

Establish reputable, trustworthy news and information sources

As with any other form of trading, if you want to trade successfully, you will inevitably need to keep track of the latest market movements and industry developments. In fact, keeping on top of all the latest news is the core of any trading strategy.

As such, establishing a list of resources you can use to access this information will be essential to your trading career! This information shouldn’t just include the latest market updates such as what the current price of Luna is, for example. Instead, it should also give you access to incisive commentary that can help you to make sense of what these cryptocurrency market movements are caused by.

Volatility is part of the game

Given that the cryptocurrency industry is still only a little over a decade old, there is a huge amount of development taking place within the sector. For this reason, it is no secret that cryptocurrencies tend to be much more volatile in terms of their price movements than other more established, traditional financial assets.

At least for the foreseeable future, understanding that volatility will be an inevitable part of the game and will be important to keeping your cool as you progress from a rookie to a more advanced trader.

Although you can’t control whether the markets will be volatile, you can ultimately control your own reactions to this volatility. Be agile and flexible in your decision making and try to avoid reacting emotionally to news of market movements.

Pay greater attention to safety and data protection

Perhaps the most important thing to get on top of when you are starting your cryptocurrency trading career is to establish good security and safety habits as soon as possible.

Digital assets such as Bitcoin and other cryptocurrencies can either be stored online in digital ‘wallets’ or offline in cold storage. If you are a beginner, having easy access to your crypto through a digital wallet might be tempting, however, this is a bad habit to get into.

While it might be necessary to store a certain amount online in order to access it for trading, you should try and store the majority of your funds in cold storage. This will ensure that it is not vulnerable to being accessed by a nefarious third party, such as a hacker or a scammer.

You should also take care to further secure any digital or online wallets you have created with two-factor authentication, randomized passwords and by only ever accessing your wallet on trusted devices. These simple steps will go a surprisingly long way to keeping your account safe online.

You can also build on these good habits by undertaking regular security audits and by identifying areas for improvement. This well help you to achieve the financially sound lifestyle needed to trade successfully in the long run!