Do you trade in Bitcoins? If you do, then you’re probably already familiar with the many benefits of this currency, which include easy global access and very low fees when compared to other methods of payment. Click on the below image to create a free trading account.
However, there are also risks to consider before trading in Bitcoins, including the possibility of losing your money if you’re not careful with your choice of brokers or trading platform, or if you make poor investment decisions. Here are some ways to keep your Bitcoins safe as you start trading them or any other asset.
1. Set Realistic Expectations
The volatility of Bitcoin has increased so much that there’s a chance you might lose all your money trading it, so if you’re looking to invest in Bitcoin or any other cryptocurrency be prepared for substantial price fluctuations. Consider setting clear parameters as to how much of your portfolio can be risked on cryptocurrencies and how much can be invested elsewhere.
2. Beware of Scams and Frauds
One of the biggest risks in trading and investing is fraud. Cryptocurrencies are generally unregulated, meaning scammers can easily target and abuse them. If you’re dealing with a company that offers investment opportunities, double-check its legitimacy. Scammers often use fake websites on the Internet to mislead unwary users and snatch their hard-earned money.
3. Do Your Own Research
Before you prepare yourself for any sort of financial investment in cryptocurrencies, it is highly advised that you do proper research on the Internet and proceed accordingly. Don’t get caught up in what everyone else is doing—only you can decide if an investment makes sense for you. Make sure to read up on whether a currency is legal and regulated in your country of residence before deciding if it’s safe for you to invest.
4. Focus on Long-Term Investment
Buying and holding is one of our favorite investment strategies. It might not be as exciting as day trading, but it’s far more profitable in the long term. When you look at short-term gains, you’re going to want to jump in and out of investments—but after all those commissions and fees, who will be left with any money? Stick with long-term growth instead. Even though it may not be as exciting as day trading, your hard work will pay off eventually.
5. Don’t Fall for Bitcoin Pump and Dump Groups
There are a lot of really great ways you can invest in Bitcoin, but don’t fall for scams and pump and dump groups. The first thing to know is that scammers will do just about anything they can to separate you from your hard-earned money.
If any group on the Internet offers you any lucrative investment opportunities in cryptocurrencies, and it the offer sounds too good to be true, you should better avoid such offers. Most pump and dump groups work through private chat rooms with secret passwords where they spread false information which you should avoid at every cost.
6. Don’t Overdo Your Trades
Over-trading can cause major losses. Because cryptocurrency values are so volatile, even experienced traders can be tricked into buying at a high. Instead of trying to chase down huge returns on every trade, aim for small gains and let your profits build up over time.
Limiting yourself in terms of trading cryptocurrencies will help you stay on the right track of investment. And if you do mess up, don’t panic—you can always make more trades or simply cut your losses and move on. By minimizing how much you risk with each trade, you’ll help keep it from totally derailing your finances.
7. Keep Information Private
There are plenty of stories about Bitcoin owners who purchased thousands of coins when they were cheap and then failed to properly secure their private keys or had them stolen by malicious hackers. If you store your bitcoins on an internet-connected device, it’s vital that you follow a few simple security rules, such as creating strong passwords and keeping software up-to-date.
Trading digital currencies is a high-risk game. While you might be able to make some quick returns, there are certain risks associated with trading in Bitcoin. Following up with these above-mentioned tips will make sure you don’t end up losing your money in this complex trading game.