The following tips will help you invest responsibly (and effectively).
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The cryptocurrency market is highly volatile with currencies often shifting 5-10% every day. This volatility opens up many opportunities for traders to grow their investment whilst others run a risk of loss.
There are a few important things to remember when investing or trading. Only invest what you can afford to lose, and if entering the market for the first time, investing or trading should only be done with disposable income.
Stemming from our first recommendation, we would also suggest you start off small with your first venture into trading and investing. Focus on your percentage gain or loss, rather than the lump sum of profit. From this, you will gain experience to determine whether or not you are ready to up your stakes of investment or continue learning and developing your trading strategies. It is also important to ensure you are not disheartened if you are not seeing big profit immediately. Cryptocurrency, although very volatile, can be a game of patience as some coins can take some time before they increase in value.
One of the most important pieces of advice we can give is for you to undergo your own research and to gain a better understanding of the current market (DYOR). It is very easy when first learning to trade to simply purchase coins purely on the recommendations of others. But it is important to remember research is key when trading and your decisions should always be your own. A few recommendations we would advise you to make would be to check the market capitalisations of the coins you are looking to invest in. This can be done on websites like www.coinmarketcap.com. From here, you can also view the price history of the cryptocurrency.
For new coins, it is often a good idea to read their whitepaper to see what they are trying to achieve and evaluate whether or not you believe their aim, rather than purchasing a coin you have heard discussed on forums or social media. Decisions to trade should not only be driven by passion but also lead by facts that will develop your trading knowledge.
Compiling your own research is not only important when selecting what cryptocurrency to invest in but also when deciding which platform you choose to trade on. We would recommend ensuring that your chosen exchange have all the correct KYC (Know Your Customer) and AML (Anti-Money Laundering) procedures in place. This is usually an indicator the company is doing business correctly and is trustworthy. However, it is also a good idea to learn where the company is based and who the business owners are. These factors provide a clear indication of whether or not you should trust a platform. To use CoinBurp as an example, we ensure all customers can learn about our team and where we’re based. Users are also required to complete thorough KYC and AML procedures before being able to make trades.
In summary, we advise that you only invest what you can afford to lose, start small to adapt, and most importantly; do your own research. We hope these tips will help you invest responsibly and effectively.