Risk Management in Crypto Trading
Crypto trading as lucrative as it is can also be very tricky in luring investors to lose their money. Just as hedge funds, the higher the risk taken the higher the returns and if things do not go as planned, the lost also becomes quite unbearable for the losers. Some individuals that venture into these kinds of businesses believe that it is an issue of mastering the intricacies and one is good to good to go. For this reason, people spend time learning how to trade crypto either through online classes or register with people they know at a fee, and they get taught. Some other people are also of the view that crypto trading is a game of luck and either one loses or gain does not depend much on one’s skills. Thus, the outcome of crypto trading is due to factors that cannot be clearly explained, and these happenings cannot be controlled by those who invest their money but rather some outsiders who may not really be aware of the impact it displaces on the losers. Some could be a press release from a powerful government, a withdrawal of an influential company from a business deal or one rich man’s decision to change his channel of investment. This piece write up will explain how both ideas come to play which suggests that though turn outs from crypto trading can be caused by external factors the individuals got roles to play to keep their funds safe.
Before starting crypto trading, there major things are needed to kickstart. One needs a brokerage account where transactions take place, either to sell or buy any crypto coin, there is the need to have this account to meet other and do business there. Some of the popular brokers one can find currently are eToro, binance, gemini, coinbase, and many others. The next thing needed is the type of coin one wants to trade. Each coin has its market value which changes every microsecond and investors need to be careful when choosing. Some common and coins one can find these days are bitcoin, Ethereum, degecoin, konjungate, tether and many others. After choosing a broker and a coin, there is the need to get a wallet where the coins can be stored if one wants to engage in long term trading.
The avoidable risk everyone can be conscious of when starting crypto trading has to do with either the broker with whom the account is opened, the chosen coin and the wallet are all registered their domain names. The domain name of a company is the online version of registered street names. They confirm the legitimacy of websites, and how long they are allowed to operate for. Any broker or coin without a registered domain name can vanish at any point in time with millions of investors’ coins without any route of tracing the perpetrators. The registration address gives enough information on how to report abusive websites and helps to trace the owners whenever any fraudulent act happens. A website called whois.com helps to verify these domain names. These steps can be followed to do the tracking.
Go to whois.com
Go to the menu icon on the top right and select WHOIS
Put in the name of the broker or the coin and run search
This will indicate when the registration expires and show the status of the domain name. There are several people’s views on each website which can be consulted on trustpilot.com to have a fair idea of what others think of the brokers and coins chosen.
After being certain on these things, one is good to start but must be careful about when buying coins from individuals that propose bigger unreasonable cheaper rates, they could be fraudsters. Experts advise that trading crypto can be quite addictive and especially when it starts becoming a bit lucrative, people may be then tempted to invest everything they have into trading and if the uncontrollable factors spike, there could be a great loss. Placing bets in bits is also other insights given by experts. Say if one has 2000 dollars in his trading accounts and places all in one bet, the gains could be great but if he loses, everything will be gone, so it is advised to put them in bits in such a case, if the bet does not go well the next one may be favourable. It then better to accumulate little gains than going after huge ones that can send one to bankruptcy.
Trading crypto can be profitable but could also be dangerous if care is not taken. Some of the contributive factors may be external but it is always prudent to manage what one has power over before blaming the ones they cannot do anything about.
