In the world of cryptocurrency, relying on other people’s advice is both necessary and risky at the same time. Some pieces of advice can work out quite well, even though other information will not yield any positive results. The following four pieces of advice are often considered the “worst” to share with other cryptocurrency enthusiasts in this day and age.
#3 Ignore Technical Analysis
It has become apparent not every fan of cryptocurrencies sees merit in technical analysis. In fact, one could argue TA only works if enough people believe in it to make things happen. While there is some truth to that statement, no one can deny technical analysis tends to be more right than wrong, especially when it comes to some of the top cryptocurrencies and digital assets.
History often repeats itself, especially in the financial world. Cryptocurrencies have been no exception in this regard, despite their “novel” approach to global finance. As such, performing proper TA can usually yield some valuable insights as to how markets will evolve. The results might not line up perfectly every single time, but a fair bit of market momentum can be predicted relatively accurately.
#2 Stop-Loss Orders Aren’t Needed
When dealing with volatile markets such as cryptocurrencies and digital assets, any precaution to minimize losses should be used whenever possible. Especially because of how smaller cap altcoins tend to see a fair bit of manipulation these days, putting in stop-loss orders is of the utmost importance. There is no reason for any trader to take unnecessary risks in this industry, as market momentum can see brief swings in either direction without prior warning.
Although it is true stop-loss orders are hardly ever triggered for most advanced traders, novice speculators will learn this approach can save them from dealing with unnecessary setbacks. Not every trade one makes will be a success, and preparing for the worst has saved many people from major financial harm over the years.
#1 Holding is the Key
In the volatile world of cryptocurrencies and digital assets, holding onto one’s “bag of coins” is often advised when dealing with top 15 currencies. Anything outside of the top 15 is not necessarily a long hold, although pursuing this option can certainly pay off in some cases. It all depends on what the future will hold for that specific currency
Traders also need to keep in mind that some of their coins will lose a lot of value more often than not. As such, cutting one’s losses and moving on to other markets can often turn a miserable day into a day without major losses or profits. Holding is a solid strategy in some cases, but it is not the only way to deal with cryptocurrencies and maximizing profits or minimizing potential losses.