Cryptocurrencies have been creating a buzz for several years, with people attracted by the potential for big investment gains.
Students are becoming interested in entering this market. But how can they do this right?
Below is a step-by-step guide that will help students get into crypto with ease.
Study the industry first
Investing is a skill that takes plenty of time to acquire and hone. Cryptocurrency is a massive and very complex industry that also takes time to study. So, before students can get into crypto, they have to take some time to study this topic thoroughly.
Every student’s schedule is packed with studying and coursework – but they can save time by using paper writing service EssayPro if they wish to work towards an introduction to the world of crypto.
The knowledge and skills they acquire could be essential to the success of their investment.
Decide what you should invest in
After acquiring basic industry-related knowledge and skills, students should focus on discovering different cryptocurrencies to decide what they want to invest in.
The list of existing cryptocurrencies is pretty broad. Bitcoin and Ethereum are by far the best-known, but there are many other options.
Do some research and don’t rely too much on the past statistics of the options you consider – remember that this market is very unstable. Therefore, a currency that has skyrocketed once will not necessarily continue to grow. It can drop in value just as suddenly.
Also, don’t forget that there are many different ways to invest in crypto. To name a few, there are crypto funds, futures, exchange or broker stocks, and blockchain ETFs. Carefully study all the options available out there to find something that will work best for you.
Find a reputable platform
As cryptocurrency gains more popularity, more and more platforms and tools for trading are appearing on the web. Some have been known to industry specialists for many years, whereas others are new to the market. Each platform has its pros and cons. And not all of them are worth trusting.
In order to get into crypto and ensure success, one needs to study the available options and find a platform that suits them best. Ideally, you want to find a platform that is reputable, reliable, convenient, low-cost, and easy to use. Some of the most popular options include:
- TD Ameritrade
- Fidelity Investments
- Interactive Brokers
And there are plenty of other options. To get started, check out the various rankings of the best trading platforms. Then, take your time to research each option and, finally, choose something that feels right to you.
You can store coins in your cryptocurrency wallet for a very long time. For example, if you have your money savings in a Dogecoin wallet and, after a certain period of time, the price of Dogecoin rises, you will receive a passive income.
Define your budget
When you know what you want to put your money in and have a reliable platform that will let you do this safely, it is time to define your trading budget. This step might be somewhat tricky for students. We all know that they often live on a shoestring budget and don’t have a stable source of income. Yet, they can still get into this market.
Experts claim that you can start even with a very small budget. Eventually, with the help of wise risk management and a solid trading strategy, you might be able to multiply your initial budget. So, don’t worry if you only have a few bucks to get started.
Learn to manage and mitigate risks
It shouldn’t surprise you that investing in crypto is quite risky. This market is extremely dynamic and changes quickly. Thus, it is crucial that you know how to assess, manage, and mitigate risks.
The way you should manage your risks will depend on whether you are interested in long-term or short-term trading.
The most common strategy for long-term investments is to never sell your assets, regardless of price changes. This implies not selling your coins when they suddenly drop or rise in value. Instead, you should determine the term for your investment and just wait.
Short-term trading, on the contrary, requires you to sell and buy assets regularly. This can be pretty hard for beginners because this type of trading requires you to have a very careful and smart selling strategy. But, with some time and experience, you should be able to master the art of short-term trading.
Never invest more than you are ready to lose
If you ask about the best tip for aspiring traders, most industry experts would say never to invest more money than you can afford to lose. Regardless of the selected type of trading, this rule remains the most crucial one. Of course, if you don’t want to lose everything.
The core idea behind this tip is very simple – you are always risking your money when investing. So, one way or another, certain losses are unavoidable. But, you can avoid losing everything at once. To do this, you should only invest a small part of your budget into each particular asset. And the total sum should be the one that you can afford to lose.
Get yourself a trading mentor
Having basically no experience or understanding of the industry, many beginners make a huge mistake by assuming they will be able to learn the secrets of trading along the way solely on their personal experience. This approach can work for someone who has lots of money they don’t really need. But, for a student, this could mean bankruptcy.
If you want to avoid losing all your money in no time, consider getting yourself a mentor. Why do you need one? An experienced mentor can help you make the first steps in cryptocurrency investment without risking too much. A perfect place to find such a mentor is to look for one in your local investing group. Such groups bring together beginners and experts with a deep market knowledge and vast experience.
The bottom line
The market of cryptocurrencies attracts millions of people interested in investing their money. Having been around for quite a while now, this market keeps growing larger every year. Due to this reason, more and more people are looking for ways to enter it.
As it turns out, the world of crypto looks especially attractive to students. Young and adventurous, they are constantly looking for ways to make some money.
Trading can be part of the answer to their financial struggle – but they must be wary of only investing what they can afford to lose.