Buying/selling Bitcoin or any other cryptocurrency can be risky if you don’t know what you are doing. Newbie traders can lose all of their investments by making wrong decisions. Hence, you must make the right decisions. That’s why I will be talking about some of the top tips that will allow you to trade Bitcoin safely.
Many crypto education platforms like CoinDesk, Money Mongers, CoinTelegraph etc talk about various tips you should be aware of while trading cryptocurrencies. And here I will be talking about such tips only:
How to Trade Crypto Safely in South Africa
1. Only invest what you can afford to lose
The first tip is only to invest what you can afford to lose. As the crypto market is highly volatile, the market can go up or down. So it is advisable that you are only investing the amount of money you can afford to lose.
Also, when you are starting up, it’s better to start with a small amount. Because as a newbie, you are bound to make mistakes, and you surely don’t want huge financial loss while you are starting up.
As you gain experience and know how the market works, you can consider adding more investments to your crypto portfolio.
2. Set profit targets and use stop loss
You cannot hit the bullseye with every trade, so be prepared to deal with losses. But how much can you afford to lose? You surely don’t want your balance to go zero. This is where the concept of stop loss comes into place.
By using stop loss, you would be able to set a limit for the loss you can take. So if the price hits your limit, it will get auto sold, saving you from huge financial loss.
Similarly, you can set profit targets. So once the price reaches your desired price point, it will get auto-sold. So you don’t have to sit for hours looking at the price charts.
3. Have a healthy crypto portfolio
If you are considering having only one coin in your portfolio, then do avoid it. Instead, you should have a portfolio consisting of multiple coins. This is because the crypto market is volatile, and every single coin loses or gains its value over time.
So in case, if the coin you have invested in loses its value, you would face a loss. But when you diversify your portfolio, you are not relying on a single coin.
Instead, if one of the coin’s loses its value, there will be other coins to balance your portfolio. So the risk would be lesser.
4. Don’t invest based on hype
When trading crypto or any other financial instrument, it’s good to avoid the hype. For instance, we have seen how Elon Musk has raised the price of DOGE. Also, the coin did make profits for many, but there are also a lot of investors who lost their investments.
Hence, it’s a good idea to avoid the hype and do your own research and learn about different cryptocurrencies.
Also, make sure to get your news from reputable news sources only. You would find news articles opposing cryptocurrencies or some negative news. But in most cases, they are just hoaxes. So don’t trust news sources blindly for your investments.
5. Start small
Lastly, you should start small and avoid taking big bets. As the crypto market has unpredictable behaviors. Hence, it is advised that you keep your initial crypto investment very limited.
You should not put all your money in crypto. As it can lead you to huge financial risks. Instead, you should only have about 2% of your investment portfolio in crypto and the rest on less volatile assets. (not a financial advice, do your own research)
As a result, if the market goes down, you would not lose all your money. However, as per your experience and research, you can take big bets. But yes, be sure about the risks you are taking.
Conclusion
So those were a few tips to trade bitcoin safely in South Africa. I hope you will consider these tips as you trade Bitcoin or any other coins. Also, for any other questions, you can feel free to drop a comment below.
