Blockchain, the underlying technology of cryptocurrency, has taken the world by storm. Thanks to its versatility, every country globally is studying different ways to use blockchain, and Australia is no exception.
If you are one of the thousands in Australia who want to trade cryptocurrency, you need to understand how cryptocurrency works.
Once you understand the basics, you can safely trade cryptocurrency in Australia and get AUD dogecoin, Bitcoin, Ether or any other crypto coin you want. To help you more, here are six tips for the successful trading of cryptocurrency in Australia. Let’s take a look.
- Compare online coin exchanges to buy crypto coins.
Crypto exchanges are the platforms for buying and selling different types of cryptocurrencies. The exchanges help you to create a secure account, transfer your fiat currency (such as AUD) to get AUD dogecoin or any other type of cryptocurrency you want.
You can then save these cryptocurrencies in your online or offline wallets. Many factors distinguish the best crypto exchanges from hundreds of others.
When choosing the coin exchange, remember to check their safety measures, commission rates, withdrawal limits, the number of coins they offer and their authenticity. Make sure you choose the best crypto exchange with minimal commission rates, lower withdrawal restrictions, and higher security.
- Learn the basics of cryptocurrency.
“If you give a man a fish, you feed him for a day. If you teach a man to fish, you feed him for a lifetime.” In the same way, it’s essential to teach the basics of cryptocurrency to each aspiring crypto trader.
Learning the basics of cryptocurrency and its founding principles will help you understand it better and help you make better decisions while investing in crypto. It’s always good to do your research about the blockchain and its numerous real-life applications before actively investing in crypto.
Any coin that solves any real-world problem with the help of blockchain has the potential to gain value in the longer run. That’s why it’s important to study different coins and their fundamentals and vision.
- Make a foolproof investing/trading plan.
It’s essential to have a solid plan while investing or trading in crypto. As a thoughtful investor or trader, you need to make a list of your prospect coins with price, market cap, benefits, threats and opportunities. Your investment plan will keep you on track while making decisions.
Create suitable entry-exit points, and don’t get obsessed with the moving charts on the screen. As crypto exchanges are always open, you don’t have to spend your whole day watching screens and looking for the best coins to trade.
The plan will also help you create a trading schedule in which you will perform all your trading activities instead of spending the whole day watching the computer screen, which is very unhealthy.
- Keep a keen eye on Bitcoin.
Cryptocurrencies are highly correlated, which means the value of one coin affects the value of other currencies. For example, in the stock market world, a correlation between two stocks means that the value of one of them will rise if the value of the other one rises, and vice versa.
On the other hand, in cryptocurrency, correlation happens with all the assets. Being the largest coin in the cryptocurrency world, Bitcoin has laid the foundation of the whole crypto world and affects other currencies’ value.
That’s why, as a crypto trader, you need to pay close attention to the value of bitcoin. Many crypto experts observed that other currencies also rise or drop in value whenever BTC rises or dips in value.
Bitcoin(BTC) and Ethereum(ETH), the two most popular cryptocurrencies, are highly correlated. Experts observed in a study that there was a 90% correlation between bitcoin and Ethereum for nearly two years.
- Keep your emotions at bay while trading.
Emotions are one of the biggest threats in the journey of successful trading or investing. Everyone wants to make profits as fast as possible, especially the new traders. Unfortunately, this greed has caused many investors to make wrong decisions and face massive losses.
Some investors also get affected by anger, frustration and fear. These emotions are hazardous for a trader as they can lead to making hasty decisions. If you make your trading decisions out of fear or frustration, it can lead you to sell or buy at the wrong time.
The fear of missing out, also known as FOMO, is another thing that traders need to avoid. FOMO appears when the trader gets overwhelmed with all the options and wants to have a piece of everything. Hence they make buying decisions based on FOMO and regret them later.
A thoughtful trader has to leave their emotions at the doorstep while trading in crypto. This is because these emotions cloud your judgement and decision-making abilities and lead you in the wrong direction. That’s why it’s essential to keep your emotions in control while trading in crypto.
- Never put all your eggs in one basket.
This rule of investing is as old as investing itself. A wise trader invests in different promising coins instead of putting all the money on one horse, i. e. the Bitcoin. Bitcoin and Ether are the oldest and most reliable coins in crypto.
A wise trader has a few pieces of BTC and ETH in their portfolio while diversifying their portfolio with different other coins like Dogecoin, Ripple, Litecoin, etc.
To find the best currencies to invest in, you need to study the fundamentals of different coins that look promising. Then, you can understand their vision and plans and how they plan to solve a real-world problem.
So, before you put all of your life savings into buying one currency, study different coins and invest in the ones that you believe have the most promise.
These were some of the tips for successful trading in Australia or any other country for that matter. Try to make the decisions based on facts and data instead of hype, emotions and fake news. That way, you can protect yourself from market crashes and continue your journey as a successful cryptocurrency investor or trader.