If you are new to trading & investing with no prior experience you may find it daunting to find profitable investing & trading opportunities. Your biggest challenge is where to start and what to learn. There is also a problem of plenty on INTERNET. The amount of data available is too much & most new investors find it overwhelming as to where to start & what to learn first.
Lets simplify your life with some Tips
Lets start with Dos, Donts & where to start
First & foremost its important to know, what you want out of your investing career & why? I will go in a Q&A flow in order to better explain.
Let me ask you what do you want from your trading & investing career? Why are you here? Whats your prime objective?
You may have different agendas that may include:
- To create a supplementary side income.
- To replace your 9-5 job & give yourself a freedom to be your own boss.
- To make millions of dollars by taking high risk gambling trades.
- Or may be you are here purely for fun with no agenda
Now what you need to do from this point onwards depends entirely on your objectives. What you need to do to create a side income by trading part time will differ from what you need to do to achieve a full time career replacement vs gambling to make millions.
I believe gamblers who are here to make millions don’t need any tips considering their sole objective is gambling. At best they win, worst case they fold but either ways all they are doing is gambling and that requires very littler formal training. Its all about their gut feeling & bit of a luck, so if you are into that category this article is not for you from here onwards. Similarly if you are here for only fun & time pass, there is nothing much for you either.
Now let’s come back to other two categories. You either want to create a supplementary side income or you want to replace your 9-5 job & adapt trading as your full time career. If you fall into these 2 categories we need the following answers:
What kind of time commitment you are willing to give to learn & trade? Are you a part timer or already a full timer?
If you are a part timer, the learning curve will be different vs a full timer. So lets assume you are a part timer. And you want to create a supplementary side income & if you really make it big than someday you want to replace your current job/business with a full time trading career.
Well now we need to choose the asset class that better fits your situation. The choice of asset class depends entirely on your local regulatory environment as well as size of your initial & ultimate investment. Some of the asset classes include:
- Commodities & CFDs
- Derivatives Trading
- Fixed Income
- Real Estate
- Art & Alternative Investments
Your choice of an asset class entirely depends on your Risk : Return profile. The rules of the game are absolutely & entirely different for most asset classes. And therefore each one of them needs an article of its own with regards to Dos, Donts & Where to Start for the New Investors. But for the purpose of our discussion we are assuming you have chosen Cryptocurrency as an asset class to create a side income opportunity that may convert into full fledged career some day.
So what are you supposed to “Do” & Dont as a New Investor who wants to trade cryptocurrency?
Here are some steps that i recommend
Do: Open an Account with a reputed Exchange!!!!! You must stay away from dodgy & shady exchanges with low liquidity. Deposit a small amount. Do not start with big capital yet. Make sure to stay away from exchanges that offer Leverage Trading. If someone is offering you 100x Leverage, they are essentially offering you a gambling opportunity. they will allow you to take a 100,000$ position on a 1000$ deposit. It will take only 1% move in the asset price & your entire capital will be liquidated. So nope, absolutely no for Bitmex at this stage yet. You aren’t ready yet
Dont: I do not recommend paper trading to new investors. Trading is all about psychology & you can never learn the psychology of managing risk with Paper Money vs Real Money.
Do: Figure out the best free charting platforms for Cryptocurrency. Follow the Tutorial for that platform & learn how to open & view charts on that platform. I recommend TradingView.Com for the simplicity. Start with the following topics:
- How to open & View a Chart
- How to set a Watchlist
- How to plot an Indicator on a Chart
- What is Moving Averages & Exponential Moving Averages
- What is Fibonacci Retracement & how to use it for trading
- What is Horizontal & Trend Line Support & Resistance
- How to trade Support & Resistance Zones
- How to spot & trade Price Action?
- What is Trend Trading?
- Whats is Risk Management?
- What is Money Management?