As you may have heard, cryptocurrency trading is gaining popularity among investors. While this trend has been around for a while now, the recent explosion in cryptocurrency value and media attention has made it a hot topic all over the world. If you’ve been considering getting into crypto trading yourself but don’t know where to start or what to expect, this article is for you!
Here are a few things to expect as a new cryptocurrency trader.
#1 Short-Term Gains Are Easier to Get Than Long-Term Gains
In the cryptocurrency world, there are two types of gains – short-term and long-term. To explain what these are, let’s first look at what they are not.
- A short-term gain is again that you make within 24 hours (or less) after buying your cryptocurrency.
- A long-term gain is any gain that you make after 24 hours (or more), but before you sell your cryptocurrency back into fiat currency or another form of payment like PayPal or Apple Pay.
It all comes down to how markets work and how human psychology works as well. When it comes to market behavior, humans are often irrational creatures who tend to overreact when cryptocurrency prices move up or down too fast for their liking. However, you must understand that cryptocurrency trading is all about understanding how to navigate these gains. The trade-off for short-term gains will be long-term ones, but not always.
#2 It’s Easy to Start Trading
A second thing you can expect is that it’s easy to start trading. You don’t need a lot of money to get started, and there are plenty of ways for you to trade from home, on your phone, laptop, or tablet. You can even do it from your workstation or desktop computer!
You may be wondering what the difference is between these terms. A workstation is like a laptop but designed specifically for high-performance computing tasks like cryptocurrency trading.
#3 Most Cryptocurrency Traders Lose Money
There are a lot of reasons to think that you might be able to make money, but there are also a lot of reasons why you might not. You could have bought it at the wrong time or with too much risk, you may have not understood how the markets work, or maybe a popular coin just turned out to be useless and dropped in value.
Even if you learn all about trading and do everything right, it’s still likely that most people will fail at being profitable traders. If this sounds depressing, don’t worry—there’s good news on this one too!
#4 You’ll Hear Mixed Reviews of Trading Bots
You’ll hear mixed reviews of trading bots. Some traders swear by them, while others will advise you to stay away. The truth is that bots can be very useful if used correctly and properly maintained, but there are also many potential pitfalls associated with the use of a bot.
For example, some bots have been known to engage in shady practices such as front-running or even high-frequency trading (HFT). These types of behavior are illegal and unethical when done by humans, so it stands to reason that they would also be illegal and unethical when performed by automated systems—and yet this still happens all too often in the world of cryptocurrency trading bots!
#5 Every Week Brings New Surprises
Every week brings new surprises, both good and bad. The market is constantly changing, as are the factors that affect it. Each week brings new opportunities for growth and profit, but it also brings plenty of risks that could leave you with losses on your hands if you’re not careful.
As a new trader, you should expect to see some significant volatility in the cryptocurrency markets from time to time—and this is a whole different animal from stock trading where price swings may be more sporadic or infrequent than they are in crypto.
Cryptocurrency traders must adjust themselves quickly to these changes and continue their research so they can stay ahead of the curve when it comes to finding out which coins will be worth investing in next month or even next year!
#6 Fear, Uncertainty, and Doubt Will Be Everywhere
There is so much out there about the risks of investing in cryptocurrency that it can be hard to know what’s true and what isn’t.
If you decide to invest in cryptocurrency, you need to be aware that you’re entering a world where many people think it’s a scam or at least a bad investment. You should also be prepared for other people telling you that your money is at risk if you use or trade cryptocurrencies.
The concept of investing in cryptocurrency is simple, but the reality can be complicated. Investors encounter highs and lows along their journey. However, as long as you are exploring the cryptocurrency markets carefully, you will be fine. With a bit of effort, achieving success will also feel within reach.