By: Usman Salis
In every sphere of business, there are tips and tricks that an astute trader deploys in order to achieve their goals of getting the biggest possible return on their investments. The cryptocurrency world is one that has developed a reputation for high returns for its users, as during the last year (2017) the market overall grew over 1000% in value within 12 months. Exchanges being the main places where most people acquire their crypto assets are not always a straightforward business and it would really help if one had a few tricks up their sleeves before beginning their trading activities on any. Some of these important tips include:
- Cold Storage Wallets: Although wallets such as blockchain and to an extend Coinbase have grown in popularity, trading on exchanges can be a dangerous thing as various real-life experiences such as the Mt Gox incident and the recent South Korean exchange bust has shown us all. No matter how reputable or safe an exchange might look, it is greatly advised that the trader keeps the majority of their crypto holdings on offline wallets away from the exchange. At any given period when the trader wants to sell their currencies, they can instead transfer to the exchange wallet and make their trades instantly
- Spread Your Investments: The cryptocurrency market can be a truly wild beast prone to unpredictable behavior. Although there is always that chance that a crypto asset might jump up suddenly in its value, there is always that chance it will crash as well. Therefore is very much advised that the investor spreads their money over a number of good-looking unrelated crypto assets to avoid the chance of losing everything when they invest in a single asset.
- Use Different Exchanges: This is also a spread the risk philosophy kind of tactic, much like spreading your risk over a number of different products within a single exchange. The idea is that in the event of a sudden fizzling out of an exchange, which often happens with zero points of recourse for the investors, it will be a much better idea if the investor puts their money in different exchanges which will limit the risk of their whole crypto portfolio going to thin air in case of a trouble with one of the exchanges.
- Avoid Long Withdrawal Exchanges: In choosing the perfect exchange, estimating the average time it requires for one to withdraw their investment is very important. An exchange which requires an inordinately long process before one can withdraw their assets is greatly advised against, as there might be a time when the investor needs to withdraw fast from the exchange which puts them at great risks if the exchange’s withdrawal process takes longer to conclude.
Index of industries being changed by blockchain: