For those who are new to the crypto world, it is not uncommon to wonder, is it true that crypto-assets can bring profit? What are the steps that should be taken by beginners? How do you get profit from crypto assets?
Like any other investment instrument, investing in crypto assets is risky. However, of course, you can minimize the risk and maximize the profits, as long as you carefully crafted a plan before starting to buy crypto assets.
In this article, we will discuss what to prepare before you start your crypto trading journey.
Before trading, you have to decide whether you want to invest your time to learn, focus and dedicate to trading? Or whether you want to buy the asset and then save it for a long period?
Trading and investing are two different things, and each has a different approach. Broadly speaking, if you don’t have free time, you might be better suited to choose a long-term investment instead of trading.
Below are the first three steps that you should take before buying an asset.
1. Knowing risk appetite
Knowing risk appetite means knowing how much risk you are willing to take. This is related to how much funds you want to use or how big a percentage of your savings will be allocated to crypto trading.
Another thing to consider when determining the risk is that while volatility continues to reign supreme in the cryptocurrency world, the price fluctuations of other coins are higher than bitcoin. Knowing the risk before purchasing crypto of your choice is necessary as
proper risk management is what leads to profitable investing.
2. Specifies timeframe
The second point is that you must understand and determine the trading period. Do you only want to trade within a week, a month, or a year? Each period has a different strategy. For example, you choose to invest Rp 1 million in a month. So, the Rp 1 million should be consistently used for trading, and not be withdrawn before the specified period ended.
The third point that is no less important is psychology and discipline. Psychology means to stick to the plans that have been made and not easily panic when the price tumbles. You can certainly anticipate this if you have done good research and planning before buying the chosen crypto asset.
If you have done all of the steps above, the next step is to make a trading plan. First, you have to do your research and find out why the chosen coin will likely go up in value, for example, and make plans that specify when to buy at what price, when to sell at what price, and what to do when the price fluctuates. Below is the example.
Example: The market sentiment is currently not in an ideal condition. You have allocated Rp 1 million for crypto trading. One example of a plan that you can make is to buy ether (ETH) in stages, starting with the purchase using 20-30% of the allocated funds.
For example, if in the first stage of purchasing ether, the price of one ether is Rp50 million, when the price falls to Rp45 million, you can make a purchase again with the remaining allocated fund. If the price goes down again, you can keep purchasing ether with the remaining funds.
Likewise, for when the price goes up. With this strategy, you purchase the ether in an average price instead of at one time and one price that can be either very high or very low in value. This strategy can help remove the emotional factor in investing.
There are three types of analysis that beginners should understand before crypto trading, namely, fundamental analysis, technical analysis & on-chain analysis.
Fundamental analysis is an analysis carried out to deep dive into the fundamental aspect of a crypto asset, such as the asset’s usability, the number of people who own it, and the team who built it. Meanwhile, technical analysis means analyzing the assets based on data from the previous period to help predict the future of the market.
Meanwhile, on-chain analysis is an analysis method that is carried out based on collecting transaction information of an asset. One of the examples of this method is analyzing the inflow and outflow volume of crypto assets from the exchange and their impact on the value of the asset. This method is usually done by professional traders, as it requires a paid platform to do it.
Familiarize yourself with these analytical methods, especially fundamental and technical analysis is essential as one of the first steps in crypto trading for beginners.
Pintu app is equipped with various features that can help you to begin your trading journey. Here are some of its features that you can use to maximize your profits.
After reading the article above, if you are interested in crypto asset trading, download Pintu, a cryptocurrency trading application that has been officially registered with BAPPEBTI. On Pintu, you can start trading with as little as Rp 22,000!