Honestly, I never dreamed of becoming a crypto trader. When I was in college, some of my batchmates did crypto trading, and I was intrigued by it and wanted to learn more.

So, with their guidance and help from YouTube videos, I learned some of the basics. In the meantime, I saved some money to invest in the crypto market, and that is how my journey started.

Initially, crypto trading was a bumpy ride as I liquidated my small account multiple times simply because I was clueless about some basic yet fundamental rules of crypto trading. However, I learned a lot from my past mistakes and reinvested in the crypto market.

Below, I will share some vital crypto trading rules every beginner should know. So, if you’re just stepping into the crypto market, read on so you don’t liquidate your investment like I did.

Conduct Research Before Investing in any Coin

One of the costliest mistakes in my crypto journey was blindly investing in cryptocurrencies without conducting any research. Mostly, I invested in famous projects that everyone talked about. Other times, I trusted my friends and invested wherever they told me to invest.

Anyway, after liquidating my crypto account twice, I finally learned my lesson: Always conduct thorough research before investing in a cryptocurrency.

While researching a crypto coin, always read its “white paper”. Essentially, it contains vital information about a crypto coin, such as the project’s goals, blockchain, roadmap, technology, framework, and more.

Besides this, also look out for the total supply, volume, and market data cap of the coin. These factors can help you determine how volatile or stable a coin may remain in the long run.

Beginners Should Stick to Spot Trading

Spot trading is the process where you first buy a coin and then sell it when the market reaches a certain point. As you need to wait for the coin’s market price to rise to a specific level, Spot trading is surely a slow process.

In some cases, such as when the crypto market dumps without any warning, you may need to wait for days, weeks, or even months to recover your portfolio.

However, I would still recommend beginners to go for Spot over Future trading. Futures require extreme technical knowledge and indicators to predict the market’s position. Plus, your portfolio is always at risk of getting liquidated.

On the flip side, your investment will always be secure in the Spot market. Yes, the market’s movements would affect your portfolio, but your Spot wallet likely won’t get liquidated.

That said, Spot trading may be more helpful for beginners to learn the market’s fundamentals. Importantly, the investment is more secure in the Spot market, and even if the coin’s price drops, beginners may learn how to hold them patiently.

Fix Your Internet for Future Trading

As I mentioned above, it’s best to learn the crypto market’s fundamentals in the Spot market before investing in the Futures. However, if you’ve got enough experience and understanding of the crypto market and feel like you’re ready for future trading, then I have a suggestion for you.

Future trading is more rewarding but riskier at the same time. To mitigate those risks, there are numerous indicators, such as Fair Value Gap (FVG), Relative Strength Index (RSI), and more to help you accurately predict whether to long or short the coin. Plus, you may quickly need to close your opened position when the coin hits your predicted price. 

Now, to securely trade and analyze the Future market, it’s best to have a reliable internet connection first. Besides volatility, the crypto market can change directions quickly, and you may need real-time data to access your opened position and make a sound decision.

After a few unfortunate experiences in Future trading, I switched to Xfinity Internet. Since then, I don’t recall losing a trade due to spotty internet. So, make sure you have your internet ready before entering the future market.

Don’t Believe in FOMO

FOMO stands for “Fear Of Missing Out” and it’s the number one enemy of beginners, as it was once mine too. A lot of times, people spread rumors about different projects or blockchains in the crypto market. In most cases, these rumors are spread through communities and groups on social media.

While I believe it’s beneficial to join such a crypto community for learning, don’t pay a lot of attention to such rumors. Most times, these rumors are spread to create FOMO among the crypto traders so they may take impulsive trades.

Due to this, some trades may be profitable, but most trades end up in loss. Most of the times, FOMO may also liquidate a trader’s account. So it’s best to trust your technical and fundamental analysis before opening a trade and avoid FOMO at all costs.

Frequently Asked Questions (FAQs)

Is it important to understand the market’s charts?

Yes, the market’s charts explain the market structure, volume, and other technical aspects of a coin.

Which is the best platform to perform technical analysis?

Although the crypto broker you choose may provide tools and indicators for technical analysis, TradingView is one of the best options as it offers the most updated market data.

Can I invest in multiple cryptocurrencies simultaneously in the spot market?

Yes, you can invest in multiple cryptocurrencies and it’s also recommended to diversify your portfolio for risk management.