How to make money on cryptocurrency trading – Tips to follow

Cryptocurrency prices are growing at a rocket pace this year and many investors try to make a fortune on the crypto trend. I personally am one of them. My investment is spread over more cryptocurrencies, the largest share I currently have in Ethereum, which has increased by 3600% since the beginning of this year. A strong indicator suggesting promising future of this cryptocurrency is also the fact that behind this coin stays companies like ING, Intel, Microsoft or J.P. Morgan. Ethereum is great in one thing, it does not serve only as a currency like Bitcoin does, but it also provides a platform for creating decentralised applications (so-called Dapps). Which means that you can theoretically build on the Ethereum platform an application that will automatically reward people depending on how they behave to ecological environment and how they impact it.

Definitely, do not take this as an investment recommendation, there are many cryptocurrencies that are somehow special. No matter what cryptocurrency you pick, here are 6 rules for cryptocurrency trading that you should follow if you want to make money.

1. Buy only coins with promising future

Do your own research and find out a background of the cryptocurrency you want to invest in. How many people are working on the project? How skilled are they? What are their plans for the cryptocurrency? And other important questions should come into play.

2. Wait for the right time to get into a trade

If you want to make money on crypto investing, there is nothing more important than buying a cryptocurrency in the right moment. Its price has to be relatively low, so you could get as many coins as possible. On one hand, people do not want to buy a cryptocurrency which is going down, but on the other hand, they do not want to buy it when it’s price is trending. It might be a good thing for you to create price benchmarks for which you are willing to buy cryptocurrencies that you have researched. Once they hit it, you just click on the buy button.

3. Make money on resale of the cryptocurrency

Once you are in a trade you have to think about the best time to sell. That could be before publishing an important news that might shift the price to a downtrend. Or when investors are pushing the price too hard up and they are not thinking straight. Always ask yourself whether the cryptocurrency can remain at this value or if it’s just a fake sentiment.

4. Don’t follow the crowd

I think this is kind of obvious tip if you want to make money on crypto trading. You do not want to be the one who follows other traders, but rather the one who leads the way. People who do not know what they are doing on the market do that and most of them just lose money. If you were like them, you would buy when the price is high and sell when it’s low, which is, of course, a complete nonsense.

5. Don’t put all your money in one basket

Just like with trading any other instrument, it is highly recommended not to put all your money just into one coin. If you make a portfolio from several cryptocurrencies, there is a much bigger chance that you will make money. Simply because you eliminate the risk when one cryptocurrency crashes. And you improve your chances when one or more coins in which you wouldn’t invest will skyrocket.

6. Keep track of your trades

If you make a record of your trades you will know exactly which coins are the most profitable ones and which ones are cutting your profit. This essential information can help you better your trading results. Therefore, I highly recommend using a trading diary where you write all-important information, such as entry price, exit price, fees, etc.