The first goal when participating in the cryptocurrency market of investors and traders is “profit”. The higher the profit, the higher the number of traders. This form of investment is actually just a basic form of investment where investors need to have experience and make the right decision at the right time. Here are 4 valuable lessons that you should know when investing in the cryptocurrency market.
Understand the essence of cryptocurrency
It can be said that this is the core element of knowledge that any investor who wants to succeed must understand. Most of us understand this basic concept. However, basic is not enough. The electronics industry is changing very quickly. So, if you don’t trade on a regular basis or work in the industry, it’s easy to overlook the fundamentals.
Cryptocurrencies are a facilitator, enabling disruption in many industries with different use cases. Therefore, there are many nuances and aspects that require you to understand before diving into the market. This nascent industry contains various complex technical terms and concepts that can be confusing to a non-specialist. Similar to any specialized investor in other fields: bonds, commodities, forex, etc., you need to have an understanding and familiarity with the market you are participating in.
Cryptocurrency market fundamentals are inherently emotional and volatile. However, once you accumulate a sufficient amount of knowledge, you can easily consolidate and analyze your own market advantage and manage your own risk.
Ignore the hype of PR and Marketing
Everyone’s tendency to predict is different, but emotional decisions are inevitable. Analyzing the Bitcoin market from November 2017 to February 2018, a clear market pattern can be seen during the 2017 bull run and the early 2018 market crash.
However, at that time, most investors just looked at it as an individual and were completely led in the most unfavorable direction. In contrast, as a larger segment or group (programmers, technology enthusiasts, crypto traders, etc.), it is not difficult to make the right prediction.
One of the predictable behaviors is that we’re vulnerable to narrative hype with core dimensions. Hitting the fear if not missed the opportunity, exaggerated pr marketing tricks can really change the landscape of the entire market. As a result, marketing and public relations (PR) activities over the decades have been increasingly invested in becoming stronger.
The psychological background has actually attracted us to the field of crypto investment first. Many investment incentive activities such as massive pre-sale discounts, offers, promotions, etc. of projects and paid reviews are a common sight in the mostly unregulated industry. this. The media, under the influence of some other force, has “added fuel to the fire”, arousing the curiosity, interest and excitement of many people. Ignoring the hype is really a valuable skill that everyone who wants to invest successfully must have in order to distinguish between a fundamentally good project or just a hoax.
You can consider some issues through the following questions:
- What fundamentals are covered by the project communication feasible? (Considering reasonableness, soundness)
- Is the development team qualified?
- Unverified issues?
Accept to lose 9/10 “bet”
Investing, in essence, is just a bet where you have to accept to lose 9/10 of that bet, or even all of it. Early-stage tech startups are usually a risky game. In particular, cryptocurrency is an extremely high-risk field because of its immaturity and speculative power.
When you decide to enter this field, you have to accept its risk. However, you can still limit the risk ratio by analyzing and evaluating many factors such as the strength of the team, the viability of the project, the ability to achieve the roadmap, the utility of the token… .
In many areas of investment, perhaps cryptocurrencies and stocks are the two areas that have the most similarities. However, the crypto market is still very young and volatile, up to 9 out of 10 startups fail in the first 5 years of operation, even more than 60% of ICOs have been completely wiped out.
In addition, it is impossible not to mention scam projects (scams) or Ponzi schemes. If you don’t have enough experience, falling into scam or ponzi traps is not so strange. Therefore, every trader must train the spirit of steel so as not to falter in fear of any other danger.
DYOR – Detailed appraisal (Do your own research)
To enter the field without being sent off, you need to meet the physical and skill requirements. Investment is the same, in addition to capital, you need to spend time researching yourself so as not to fail empty-handed. However, how much is enough? The concept of enough is not limited but depends on the perception of each individual, for me is when I feel confident enough to analyze and evaluate the objectivity of a project not only at a website, a whitepaper. Currently, there are many companies that are taking advantage of influencers, wealthy individuals or trusted technology leaders to scam. Without delving into the details of a whitepaper, the technical capabilities of the project, or the development team, the risk of losing your money will be great.
The cryptocurrency market is still fluctuating. Breakthrough ways are expected in the future. At the same time, investors need to seize the right opportunity at the right time to bring themselves the best profit. We hope the above article has provided you with a lot of useful experiences. Good luck!
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