Best Cryptocurrency Trading Tips
What we are here to do today is to provide you with the best cryptocurrency trading tips so you can be safe and profitable. Let’s get right to it.
Take Online Security Seriously
OK, so this tip technically has nothing to do with trading in itself, but it’s very important to follow nonetheless. When it comes down to it, there are way too many people out there or extremely lazy or careless when it comes to cyber security and cryptocurrency trading. Doing things like using the same passwords for all of your accounts or saving your passwords in your browser are not recommended.
We need to make sure that your passwords are very long and difficult to guess is also recommended that you have high quality security programs in place, especially antivirus and antimalware software. Moreover, it’s something you should try doing is using a password manager that will keep all of your passwords extremely secure. You don’t want somebody hacking into your Bitcoin wallet or your bank account because that is not going to be good.
Store Your Coins in a Secure Wallet
What is the biggest mistakes that newbie cryptocurrency traders make is to keep their coins stored on the trading platform or in the crypto bank. Folks, this is a massive mistake. And do you know why? Unlike real banks for major financial institutions, crypto currencies and crypto banks are not insured. This is also the case for trading platforms that trade with cryptocurrencies.
The simple reality is that if the trading platform or the crypto banking question goes belly up, you will lose all of your money and you will never get it back. Therefore, what you need to do is to store all coins that you’re not actively trading with at that very moment in a secure wallet that is not connected to the platform or any crypto bank.
Here you can choose to use a digital wallet that is installed on the hard drive of your device, or you can use an actual physical hardware wallet like a Ledger device. However, when it comes to physical wallets, beware that if you lose it, it’s just like losing your real wallet in the sense that once it’s gone, it’s gone.
Pay Attention to Transaction Fees – Keep Them to a Minimum
Something that you need to be aware of is that even if your financial institution that you’re trading with does not charge transaction fees, which, let’s face it, is very unlikely, you will also be faced with transaction fees simply because you’re using cryptocurrencies.
The simple reality is that every single transaction that happens with Bitcoin or any other cryptocurrency goes onto the block chain and this costs money even if the transaction fees for using cryptocurrencies or for transferring your cryptocurrencies from one wallet to another are very minimal, they do still add up.
The recommendation is to only move around coins when you absolutely need to, because every single move is going to cost you money. Moreover, you should look for a trading platform that charges minimal or absolutely no transaction fees. For example, Wealthsimple trade does not charge any transaction fees to its customers, which is a huge bonus, no doubt.
Cryptocurrency Exchange Fees Matter Too
Another thing that you need to know about cryptocurrencies is that exchanging one type for another. Is also going to cost you money. Just like when you convert British pounds to American dollars in the bank charges you a fee, so does a crypto service charge a fee for converting Bitcoin to Dogecoin.
This means that if you were buying one type of cryptocurrency with another, you need to be absolutely certain that you want it, because every single transaction is going to cost you, even if just a little bit. On that same note, you want to look for a trading platform or a crypto bank that has minimal crypto currency exchange fees.
Cryptocurrency Income is Taxable Income
Most people simply don’t know that crypto currency income is taxable. In fact, many people use cryptocurrencies specifically to try and avoid paying income taxes.
Well folks, if tax man catches you, you are going to be in for a world of surprise because the reality is that Bitcoin and all other cryptocurrency capital income is considered taxable, and if you don’t pay your taxes on it, there will certainly be consequences.
The point we’re making here is that you need to keep track of all of your cryptocurrency trades and investments, specifically the profits you make off of them. Any profits that you make from selling Bitcoin is taxable.
Diversify Your Coins
A really good tip to follow in trading cryptocurrencies is to keep in mind that you always want to diversify your coins. Yes, bitcoins buy fried most popular and valuable of the crypto currencies at this time, but with that being said, it is still not overly safe. Although you want to invest majority of your money in Bitcoin, the simple reality is that if they quit crashes, you won’t do too well, which means that having a diverse array of coins is ideal.
Diversify Your Investments
More than just diversifying your investments in terms of your cryptocurrencies, you should also keep in mind that the cryptocurrency market is not the only one that you should be investing in. In fact, although the cryptocurrency market is gaining legitimacy and popularity by the month, the simple reality excited still not all that secure.
The cryptocurrency market can crash at anytime, and evidence of this has popped up many times over the past few years. The crypto market is extremely volatile and should therefore also invest in things like Forex and stock market. At this time, it is recommended that no more than 10% of your overall investments should be in cryptocurrencies.
Use a Good Crypto Signals Service
The other cryptocurrency trading tip that we want to leave you for today is that you should try using a good cryptocurrency trading service such as Crypto Trading Box. This is a signal service which provides you with up to 12 accurate cryptocurrency signals per day, and all you have to do is copy and paste them into your trading platform.
Cryptocurrency Trading Tips for Success
There you have it folks. Some of the most important tips for you to follow in terms of crypto currency trading. Although these crypto currency trading tips that we talked about today aren’t really about the trading aspect as much as the financial and security aspect of things, they are still very important to consider.