Today, there are about a dozen different strategies for building a profitable cryptocurrency business. One of them is earnings on the trading of cryptocurrencies. A lot of misconceptions are associated with this strategy, which I want to tell you about.
The general approach to trading in the field of cryptocurrency looks quite understandable and does not conceal anything extraordinary. It is necessary to repeat approximately the same sequence of basic steps to earn on trading.
Forecast of dynamics
As usual, the trader begins his activity by trying to form a realistic forecast through analysis that the market has the greatest chances to rise in price in the foreseeable future.
Next, you need to carefully study the dynamics of fluctuations in value to determine the moment when the cryptocurrency can be purchased at the most favorable price in anticipation of its growth.
Even after long-term growth, the cost of cryptocurrency may one day go down. The task of the trader is to correctly predict this moment and have time to make a sale at the highest possible price.
It would seem that everything is so simple that even a beginner can start getting good profits using this simple scheme. However, in fact I can say that there are a lot of nuances that are not always paid attention to.
The fact is that if we had any checklists that clearly work out at least 51% of the cases, and this tool was completely suitable for use by a newcomer, then everything around would already be very wealthy cryptoinvestors.
Unfortunately, years of practice are required to achieve good results in trading. Moreover, even with years of practice, traders can not overcome passive investment strategies in the long run – this has been repeatedly tested and proven in large studies in stock markets, exchange markets, currency markets, and so on.
Therefore, in my opinion, trading in itself is an interesting area, but only on the condition that you are ready to devote your life to this. All the stories about what can be as lightly, one leg in this topic to climb and succeed, without significantly overestimated risks – I do not observe this in the market. There are no ready-made methods or checklists that could be applied without total immersion in the topic. Maybe over time this will appear, but so far I don’t see anything like it on the market. So far I see a huge excitement around the topic and the desire to simply exploit a high interest in the subject with promises of certain things that will work and is guaranteed to produce results. In my opinion, for 90% of investors, blind faith in this approach will inevitably lead to disappointment.
Recently, I have often been asked about trading – in particular, about why I do not teach trading and generally do not recommend it, especially to beginners.
The situation is as follows. Trading cryptocurrency brings very good results, but there are very high risks. For a beginner, it is very difficult to balance the risks and profitability of trading so that it is more efficient than any passive strategy of investing in bitcoins. This requires honing the skill for months or even years, and really serious success in trading is achieved only by very disciplined people who thoroughly study the topic and devote a lot of time to training.
The Internet is full of messages that learning to trade is easy, results will go quickly and results are almost guaranteed. This is a lot of manipulation. This is valid only in certain stages of the market, and the huge number of people who give these messages are not themselves professionals. There are a number of educational products from professionals, but this can be learned and it can bring good results if you dedicate yourself to this.
As a tool not for an investor who links his life with trading, but for a more conservative, passive investor, trading cryptocurrency as a tool, in my opinion, is not very promising. If, at the same time, the investor is a novice, then this tool becomes also not very safe, since the risks of losing are unreasonably high.