Cryptocurrency trading can be a very rewarding and profitable activity, but only for those who know how to navigate the market and are able to decipher the intricacies and the rules that govern this fairly new and fascinating area of investment. Play your cards right, and you’ve got a powerful wealth-building tool in your hands. Make a wrong move, and your crypto journey can come to a sudden end.

For the most part, investing in cryptocurrency can feel like a wild roller-coaster ride, full of excitement and unexpected turns. If you want to be successful at it, get ready to face the most common dilemma crypto traders face: when to buy, sell and hold. As a newbie to the crypto scene, it can be extremely difficult to figure out when’s the right time to buy, sell or hold onto your digital assets. As you gain experience, you’ll become more skilled and confident at making these decisions, but crypto trading can prove a hard nut to crack even for versed stakeholders.

If you don’t want guesswork and baseless speculation to guide your trading journey – and trust us, you don’t – here are a few tips that can help set the ground for a safer and smarter decision-making process.

Start with a plan

As you may already assume, kicking off your trading venture without having a general plan and a well-thought-out strategy in place is not a wise move. You need to have a clear framework and some guidelines that can help you stay on the right track and keep you from making rookie mistakes.

There are various techniques and methods you can use to craft your plan, but one of the most important elements that you should definitely include in your strategy is setting a specific price point at which you want to sell or buy a certain digital currency. These targets should serve as the basis for your trading activity, considerably smoothing the decision-making process for you.

Limit potential losses with stop loss orders

High return potential and high risk go hand in hand in the crypto world. Unfortunately, there’s not much you can do about it as you can’t have one without the other. But that doesn’t mean you should just simply go with the flow and sell or buy whenever you feel like it. Being aware of the risks that you expose yourself to when investing in crypto also implies taking the necessary measures to protect yourself against an unpleasant outcome.

Stop loss orders are one of the measures that can help traders mitigate risks and minimize losses. What stop loss orders do is help you get out of an unfavorable trade at the right time by buying or selling an asset when they reach a predetermined price. however, you still have to possess a good understanding of the market and be able to make accurate predictions in order to have stop loss orders work in your favor.

Doing due diligence

The adage knowledge is power definitely applies to crypto trading as well. Numerous variables influence the cryptocurrency market and drive purchase and selling decisions, such as scarcity, competition, government regulations, political events, the state of the economy, and so on. While you have no control over these elements, the least you can do is do your research and learn as much as you can about all things crypto.

You shouldn’t limit yourself to basic information that everyone has access to. Instead, take your investigations further and dive deeper into technical analysis. Making sound buying or selling decisions also depends on your ability to read and interpret charts, identify patterns and keep on top of trends.

Keep a close eye on price fluctuations

Cryptos have specific attributes that differentiate them from one another, but there’s one common denominator for all of them – volatility. Dramatic swings in value characterize all digital currencies, and it can be next to impossible to predict if or when the prices will surge or drop in the future.

That’s why you need to keep your eyes on the price at all times. If Ethereum investments make up the largest part of your portfolio, you should obviously check Ethereum price regularly to make sure you’re up to date with any changes in its value before you decide if you’re going to buy, sell or hold. You should also look at how prices evolved over the years in order to make an idea of what you can expect to happen next.

Don’t fall for rookie mistakes

Investing in a cryptocurrency when the prices are low and selling when they go up again sounds like a pretty sensible strategy, except that’s not necessarily the smartest thing to do. While you should always keep your budget in mind and avoid spending more than you can afford to lose, investing in cheap digital assets and currencies doesn’t guarantee you a profit.

Affordability shouldn’t be your only incentive for buying or selling crypto. Market cap and community support are factors that should weigh a lot more in the decision-making process. Instead of following recipes for success that often lead you nowhere, try to maintain a sceptical perspective and use your better judgement before taking any action.

Practice patience

It’s important to remember that the path to crypto trading success is paved with patience and perseverance. While short-term trading strategies can be lucrative, they’re often not a good idea in the long run due to their high risk. It’s better to look at crypto investment as a marathon and not a sprint. This means that holding onto your assets for longer can help you bypass short-term volatilities and thus ensure far better results than day trading.

There are no guarantees or certainties in crypto trading, which is why no one can come up with a set of rules on when to sell, buy or hold cryptocurrencies. So, while these guidelines can be helpful, it ultimately comes down to your skills and ability to make the right move at the right time.

Taylor Gilbert is the admin and freelance writer at How About Tech since 2020. He primarily writes Tech articles, How-to guides and Entertainment as well.