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Myles

What should I look out for before trading a cryptocurrency? 

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Hi Myles,

You need an excellent strategy to conduct your trading where you are just beginning to deal with cryptocurrencies, or you have been in this field for quite some time. Your trading strategy should also help you minimize the chances of making losses.
Cryptocurrencies have become popular over the years. Owning a cryptocurrency currently has also been made easier. However, before you start dealing with any cryptocurrency, there are some factors that you need to consider.
You need to know the volume of trade of a certain cryptocurrency. When a digital currency trades in large quantities daily, it means that it is easy for you to buy trade the crypto. The large trading volume means that the cryptocurrency is highly liquid; therefore, you need not struggle to trade the currency.
You need to develop a good trading plan and stick to it. Please do not trade a cryptocurrency for a price lower than you have set. Your plan should include your actions in case a trade fails to happen according to your expectations. One action you can take is by implementing a stop-loss order. A stop-loss order will protect you from making notable losses when you sell your crypto at a price lower than what you had intended.
It would be best if you also considered how you would store your crypto. It would be best to evaluate various methods and go for the one that can guarantee the top security of your cryptocurrency.
Market capitalization (market cap) is another thing you need to consider before buying a cryptocurrency. Market cap shows the number of cryptos available in a certain company. It also shows you the risks prone to a certain cryptocurrency.

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You should pay attention to the following points prior to trading cryptocurrencies, particularly if you are a neophyte.
Target large market capitalization. Cryptos with large supply in circulation and high market cap make them less vulnerable to wild volatility and manipulation.Small market cap cryptos face wild price changes on negative or positive news, therefore easy manipulation targets for large holders.
Big trade volumes denote easy coin buying or selling. Low volumes point to liquidity challenges and traders struggling to make buys or disposing positions.
Stop-losses and taking profit may not play well into analytics of digital assets. However, do make sure you have a plan for each trade. That way you won’t mess up with emotion inspired trading.
Safely store your coins, for there is a saying you trade and keep funds on exchanges you risk losing. Proficient traders maintain digital asset wallets offline where no one else has access but them.
 

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