Taking it up a notch: strategies to become better at investing in crypto 

Cryptocurrencies have become one of the most popular assets to have in your portfolio. They are no longer solely the domain of the select few who are aware of their existence. In fact, more and more investors have begun adding digital assets, in the form of coins and tokens, to their portfolios. This move serves to diversify the holdings of the traders and provide additional security measures in the case of market crashes. If the events of 2022 are anything to go by, it has become more apparent than ever to investors that having a diversified portfolio can keep you somewhat protected from the detrimental effects of inflation and significant changes in markets.

But is there a specific recipe one should follow when looking to buy Bitcoin with debit card? Are there certain behaviors you should adopt in order to elevate your chances of success, and are there some hints the market offers that can help guide you? The truth is that there’s no one-size-fits-all solution when it comes to trading, but there are certainly some things you can do to maximize your chances of succeeding.

Range trading 

You’re probably familiar with the concept of day trading, the game plan involving taking and exiting positions within the same day. However, range trading might sound like a more obscure term. Essentially, it refers to investing within a particular range over a relatively short period. For instance, if an asset is trading at $1000 and is expected to rise to $1100, you should trade in the range between the two prices. Many investors request assistance from professional analysts or learn how to analyze the market themselves in order to get a more accurate estimation of the prices they can expect.

In the crypto environment, however, it is always a bit of a gamble. The prices of digital assets tend to be somewhat volatile. Even Bitcoin, the most well-known digital currency and the blueprint for all other currencies based on the blockchain system, records quite dramatic value changes over short periods. As such, many investors have been apprehensive around cryptocurrencies, believing they need to be more stable to ever prove themselves as lucrative assets. Others, however, are convinced of their potential as hedges against inflation and their capacity to revolutionize the world of finance.

Assess your risk tolerance 

When you enter the world of cryptocurrencies, you must be aware of their risks. While all assets, including traditional ones in stocks, bonds or real estate, come with a certain degree of uncertainty, digital money is typically more volatile. Generally speaking, you should stick with the well-known cryptocurrencies that have established a name for themselves within the market. The ones that are very new are more likely to be incredibly changeable, and if you’re taking your first steps into the trading world, a negative experience right at the beginning is more likely than not to cause you to swear off cryptocurrencies forever.

So, before heading off to start trading, you must have an objective look at how much risk you’re willing to take. It’s absolutely impossible to invest without any associated capital loss, regardless of how perfect you believe your strategy is. So, if you’re not comfortable with the idea that you can lose money, there are two possible options. You can give up investing altogether or stick to investing only as much as you feel comfortable losing.

However, you should also be aware of the fact that sometimes higher risks come with significant rewards. The potential returns in the crypto world can be rather extensive, so if you find yourself becoming more comfortable with risks after trading on exchanges for a while, you can try to be a little bolder in your investments. If you come out of the top, you’ll see why so many investors are drawn to the digital asset market despite its highly changeable prices.

Learn analysis 

Due to the fact the market changes so rapidly, it can appear that there’s absolutely no logic whatsoever behind it. And while it’s true that predicting with absolute accuracy is close to impossible (and anybody who claims to be able to do so is likely untrustworthy), there are some types of sophisticated technical analysis models you can use. They include:

• Fibonacci retracements: Using horizontal lines indicating the probable locations of support and resistance, this type of analysis shows how much a price has retraced a prior move. The direction of this previous trend is more likely than not to continue. The Fibonacci retracements work by taking two extreme points and dividing the vertical distance in accordance with the Fibonacci ratios of 23.6%, 38.2% and 61.8%. There are additional divisions you make at precisely 50% and 100%.
• Bollinger Bands: This tool enables you to identify short-term price movements and probable entry and exit points. Many investors find Bollinger Bands to be particularly helpful owing to their visually intuitive method. It works by using two lines above and below the moving average of a crypto chart. Generally, when prices approach the lower band, it’s an excellent time to buy, and when they’re closer to the upper levels, it’s best to sell.
• Moving averages: As the name indicates, these statistics showcase the average changes within a designated period. They are widely used in finances to keep track of trends for securities. SMA, the simple moving average, calculates the average prices over a certain number of days or weeks, while EMA, the exponential average, adds additional weight to more recent prices.

When you enter the world of crypto, you must be prepared for many changes. Because they’re so popular among a large number of people, digital currencies are typically highly unpredictable assets. However, many believe that with the rise of technology across all industries, things are bound to change soon. For many, cryptocurrencies and the blockchain are the first step in this technology that will push the boundaries of the financial world. Whether that happens or not remains to be seen. In the meantime, however, it’s clear that crypto isn’t going anywhere.