When it comes to making money online, the easiest thing that comes to mind is crypto day trading. If you learn to trade and you have a reasonable spare amount, you can even 100x your money with crypto.
I understand that a huge risk is involved in crypto because of its volatility, but I don’t see any business where there is no risk involved.
For instance, if you go for any brick-and-mortar business, you put in at least thousands of dollars and hope that it will yield something useful. The highest ROI you can expect could be 59%.
But no one can guarantee you success.
For instance, many people start a laundry business, because it’s highly profitable, but many entrepreneurs fail in the laundry business because they make some obvious mistakes.
It means risk is everywhere.
So is the case here.
If you make mistakes, you may lose your money. But if you are good at trading, the returns on investments (ROI) in crypto are endless.
I have given the example of SHIB many times earlier, many people became millionaires in 2021 due to SHIBA INU. Many other coins can play the same game in the next bull run.
Well, if you have made up your mind, here are four basic things that every beginner must check before investing even a single penny in crypto.
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Learn crypto trading first
If I could go back to when I started investing in crypto, and I could change anything, I would make up my mind to learn crypto first.
Here is a misconception that leads people to believe that crypto is a blind business.
Many people who see crypto bull runs believe that many coins start going up for no reason or due to small reasons. For instance, one coin announced that it will move to the metaverse, and the coin started pumping, or maybe Elon Musk tweeted about any coin, and it started pumping.
You must keep in mind that nothing pumps due to such reasons. News has temporary effects, but every cryptocurrency follows a pattern. If the coin has not completed the pattern, it’s a fake pump, but if it has completed the pattern, it is a real pump and you can catch that crypto pump.
It’s possible that the patterns are made with mathematical functions on the given timelines. For instance, the company is building the fundamentals of a coin, and the expected timeline is one year, they believe that they can’t win the race within the first year, they will get a pattern of a year and there will be many ups and downs. There are many other factors involved. As I have not seen how those patterns are created, so I can’t guess all the reasons.
Luckily, at least, those patterns could be captured.
Those patterns create supports, resistances, and trend lines.
If you are investing in cryptocurrency, you must learn all those signals that predict everything that’s coming in the following moments or months.
If you are a beginner, and you have come in the bull run, you should hold back, and learn crypto first; because anything that goes up comes down.
You must check the crypto trend
When I started investing in crypto, I had no idea of anything, it was the end of the last bull run.
I saw many coins were going crazy. Dogecoin started pumping from 5c and went to 73c. I was expecting it to be $4 soon.
I had no idea how much market cap is required to reach that destination and why people would put $400 billion in a meme coin. When even Bitcoin is a trillion-dollar coin.
Well, the trend changed in a while, and coins started dumping.
I had no idea that coins follow trends, if there is a downtrend, it’s not investment time, it’s the day trading period.
And if it’s up trend, it’s good for investments until it reverses.
So if you are a beginner, you must check if there is a downtrend or an up trend.
Check the monthly retest of your coin
Moving a bit forward, the next big thing to check is the monthly successful retest.
If you want to buy a coin at any level, you must check if the coin has already retested its recent month’s support successfully.
For instance, if you look at the monthly chart of dogecoin, you can see that it has successfully rested its recent support level under 6c.
It means there is an 80% chance that Dogecoin will go up at least once. You can keep your investments in it until it doesn’t break resistance in two monthly tries.
You can also see dogecoin tried to break resistance below 30c many times, but couldn’t succeed and then the downtrend officially started in 2021
Well, this is what you must check before investing your money in any coin.
Check the fundamentals of the coin
Not every coin is good for investment. If you want to buy a coin, you should see what are they doing. Why will they succeed?
For instance, if a coin is working on building fundamentals, and you see some good future for it, you can go for it.
The best advice I have for any beginner is not to go for any new coin, new coins always ruin your money, at least once. Let them play with others’ money first.
If you don’t check the above-mentioned things, you will ultimately lose your investments. At last, I am not your financial advisor, I have shared what I have learned in the following two years. The only reason to share the information is to secure your investments.
Never give money to anyone
There are tens of hundreds of scammers out there in the market. They are working hard to get your money, they use tons of creative ways to scam you.
For instance, look at these Online Investment Scams, where they have mentioned almost every strategy people use to scam innocent traders.
If you notice, among all the strategies, they ask you for the money. You give them and they run away!
So it’s highly advised not to trust anyone and never send your money to someone to invest. Learn yourself, and earn for yourself.