Crypto Trading Best Practices
Dec 8, 2021
If you are new to crypto and you’re planning to invest some of your hard earned cash into a project, it's crucial that you are aware of exactly what you are entering into! Below are some of the things that will help guide you in your crypto trading journey.
Do Your Own Research (DYOR)
When it comes to trading and investing in cryptocurrencies, there is nothing better than to do your own research. Relying on vague sites or self-interest driven crypto influencers can often be misleading. That's why it’s important that you DYOR!
As a crypto investor, it is vital to regularly check in with what's happening in the crypto world. Most people do this by following reputable cryptocurrency news outlets, like CoinDesk, Global Crypto, or Cointelegraph. In order to mitigate the risks of crypto trading, an investor should always educate yourself and DYOR.
The term DYOR is also often used as a disclaimer when crypto enthusiasts make public posts or share their analyses on social media.
Don’t invest more than you can afford to lose
When it comes to investing, there’s one golden rule that you should always follow: Never invest more than you can afford to lose. Experienced traders always recommend that new traders start small and test the waters with a few trades. Once they feel comfortable, then they should feel free to invest larger amounts, however, you should never risk more that you are willing to lose. Cryptocurrencies are extremely volatile and carry high risks, you should never do things like increase your mortgage or use your credit card facility for any investment that is high risk.
Many traders lack security awareness and often fail to keep their private keys safe. A private key is a unique string of characters representing a digital signature that grants full access to your wallet, including the authorization to send funds. This is similar to a signature used to sign off on a bank cheque– it should never be shared with others, as it would effectively let them “forge” your signature and control your funds. As a crypto trader or HODLer, it’s extremely important to keep your keys safe. If you were to lose access to them, you would lose access to all of the assets in your wallet.
While there are a variety of crypto wallets available, each person has their own preference. Check out our blog on crypto wallets and security.
Remember, proper diligence and sound judgement should be used in evaluating the risks associated with these activities. Trading cryptocurrency carries significant risk and losses can exceed deposits. Refer to our Terms and Conditions and disclosure material.