How to Thrive in Crypto! – Ways to get rid of Crypto Trading Fear.
Risk aversion, or more appropriately, loss aversion is a common tendency among humans, and when it comes to money, the intensity only increases. Thus, when it comes to the thing that can topsy turvy one’s life, the stakes get really high. Investments are no other than these high stake decisions where one wrong foot can leave you with lifelong regrets. So, it’s important to understand the risks and rewards that come with investments and what should be one’s approach to guard them against potential losses. Let us go through some of the aspects specifically focused on cryptocurrency before you set your feet into the markets.
- Know your risk and investment appetite: When looking to invest your money, make peace with the idea of losing it all. Never invest more than what you can afford to lose without heavily altering your life. Always understand both the upside and downside of your investment and only then go forward with the investment.
- Understand the Business/ Project: Knowing what a company does and the scope of its product or service helps in understanding the key fundamentals of the company. The sustainability and growth of business directly have an impact on your investment.
- Fundamental Research: This goes without saying in every industry whether it be crypto, equity, debt, or any other investment opportunity. The fundamental research involves a thorough understanding of the whitepaper, knowing the team, and many other aspects.
- Analyze the demand and supply: Before you start trading in the market, understand that demand and supply play a vital role in price determination, and with a volatile industry such as Crypto, this parameter becomes way more important.
- Price Analysis: As mentioned that demand and supply drive the price, however, other factors also come to play in price determination. So when trading or investing, make sure to find the factors driving the price and not just put money out of FOMO.
- Check Liquidity: Considering the trust and less knowledge about crypto, the majority of the trades in the market are out of FOMO or random gambling. Thus, whenever the market sentiment changes, it impacts liquidity leaving investors and traders in a hot spot.
- Choose a Reliable exchange: This, if not the most important, still plays a key role. With the emergence of some bad players, like FTX falling, investors and traders were left panicking to dry out in the market.
These are the few tactics that, if followed, could help you not only survive but also thrive in the Crypto Industry. These aspects form the key rules in any investor/ trader’s Bible and should be in yours if you’re looking to make your luck.
About the Author
Ashmeet S. Kharbanda is the Marketing Executive at NonceBlox Pvt. Ltd. and the founder of the YouTube Channel – Litpreneur. He’s a keen reader and writer who loves talking about Blockchain, Web3, and Finance.