As a mother, you might be busy with work, your career, and family life such that you have minimal time to engage in other activities. However, you can always find time to do other things that can add value to your life. Despite your busy schedules and the many responsibilities, you can try crypto trading.
A cryptocurrency is a virtual or digital currency secured by cryptography, making it almost impossible to double-spend or counterfeit. It’s a digital asset based on a network, and it’s distributed across many computers. This structure enables them to exist outside the control of central authorities and the government. According to a recent survey by one cryptocurrency exchange, 39% of Australians view cryptocurrencies as a worthwhile alternative investment to real estate property. (1) (2)
Therefore, taking the risk of investing in crypto can help you make extra money. You can trade more with less by getting online brokers who accept a low minimum deposit and offer decent leverage. A good crypto broker should also guide you on some profitable strategies to trade crypto.
Here are helpful tips that you need as you get into crypto trading:
- Invest what you can lose
You definitely want to make more money while trading crypto. But you should understand that any investment is a risk, and there’s a possibility of gaining or losing. Having this mindset will help you as you trade. So as soon as you convert your money to cryptocurrency, consider it lost forever.
The reason is that there’s no guarantee that you’ll get it back. Several things can cause losses, such as bugs, government regulation, hacks, and wrong predictions. So it would be best if you were psychologically prepared because anything can happen.
There was a crash in January 2018 where some crypto investors got burned. Many encountered substantial monetary losses. To express their frustrations, some of them smashed their laptops, and others broke their monitors. This is because they had great expectations of getting returns, but they got disappointed. Others had even taken loans, hoping they’d get profits, but the world turned its back on them.
For this reason, if you’re planning to invest money that you can’t afford to lose, you need to take a step back. Think about your decision and look at your current financial position. Ensure that you’re not acting out of desperation.
This will save you much frustration in case things go south. Also, ensure that you set up your crypto trading account with credible brokers. If you’re living in Australia, you can find some good crypto exchanges with websites like bestcryptoexchangeaustralia.com.au that provide comprehensive reviews so you choose the best exchange for you.
- Pay attention to Bitcoin
Most Altcoins (alternatives of Bitcoin) are more or less related to Bitcoin. Think about Ethereum, Polkadot, Litecoin, Cardano, Dogecoin, Stellar, Monero, Solana, Shiba Inu, and the rest. If the price of Bitcoin goes up, the price of Altcoins drops as individuals try to exit to enjoy Bitcoin profits. On the other hand, if the price of Bitcoin drastically drops, the price of Altcoins can equally go down. People will try to exit Altcoins to trade back into the flat, anticipating that the curve will rise again.
Therefore, if you want to know the best time for Altcoin growth, it’s when Bitcoin exhibits consistent decline or growth or remains stagnant in price.
- Diversify your options
As much as the potential to gain increases with the amount of money you invest into a particular coin, the potential of loss also magnifies. An excellent way to look at it is to closely monitor the overall cryptocurrency market and ask yourself some important investment questions.
It would be good to ascertain whether the increase of the market cap would be driven by many coins or by just one coin. To capture the overall growth of the cryptocurrency, you need to diversify and get the benefits of growth from investing in multiple coins. The returns can help your financial growth as a mom, and thus your whole family can benefit.
An example of this is seen between 2016 and 2018 where Verge increased by 13,000 times, CorgiCoin increased by 60,000 times, and Bitcoin increased by 34 times. As much as the investors would’ve reaped benefits from Bitcoin only, diversifying their options would have made them gain even more profits. In this same sense, you can also try diversifying your options.
- Don’t be greedy
It’d help if you learn to take your profits at an opportune time rather than wait too long until your profits turn into losses. Many times, after investing and your coin starts growing, you might feel a bit too confident of your trading prowess. You may start desiring more profits within a short time, especially if you have big dreams in your mind. Such behavior may lead to your ruin in the markets. So, always be super cautious.
If a coin gains by 30%, there’s no need for you to leave the whole amount there, even if you’d targeted a 40% or 50% profit. You should at least pull out some of the profits as the investment grows, even if the coin doesn’t reach the profits you had in mind. (4)
If you try getting out at a higher point or wait for so long, you risk turning the profit into a loss or even losing the profit you’d already made. Make it a habit of immediately taking some of the profits you’ve made and gathering enough information before re-entering a trade. This tactic will help you reap more profits.
- Don’t invest blindly
There are people in this world who aim at taking advantage of other investors’ lack of trading expertise and naivety. They trade in cryptocurrency markets and seize every opportunity they find to exploit less-informed investors.
They’ll tell you what to buy and even advise you on the coins that are just about to go on a bullish run, only to exploit you and then exit. You’ll be left there stranded, yet you’ve already given them your money. Therefore, you need to be more conscientious regarding with and from whom you deal or get advice.
While it’s true that the cryptocurrency markets have a highly speculative nature, a good investor should do thorough research to take full accountability for the potential investment outcome.
Getting information from a renowned and successful investor is good, but you shouldn’t be so sure. It’s never a promise because, in the end, you can still lose. Regardless of whether you’ll ask for advice or not, you need to follow your instincts before trading. Also, make a point of seeking advice from a licensed crypto advisor.
- Look at the bigger picture
As you research different cryptocurrencies you’d like to trade, you’ll realize that there are different classifications of coins. Some of them have amazing publicity, look promising, and have a record of successful execution. On the other hand, others are not so popular.
The best approach is to select long-term and medium holds, pit them aside, and wait rather than get in and out of trades within a short period. And when the price starts to drop, don’t be in a hurry to sell. You shouldn’t touch anything you’ve set aside in your medium or long-term portfolio for some time.
A good example of a coin that you can consider as a long hold is Binance coin (BNB). It recently dipped by 20% for a while, and people made their sell-offs to preserve their investments. A week later, it pumped by almost 3 times and stayed there in the skies for some time. If the long-term investors would’ve held just a little longer, they’d have reaped handsome profits. Therefore, you need to be patient and only sell after the time you’d set elapses.
- Learn from your mistakes
After losing a particular trade, always evaluate the situation and how you traded to figure out why it happened the way it did. Take that experience as an example to guide your next move. Now that you know better, ensure that you don’t repeat the same mistakes.
It’s good to keep in mind that there are still other traders who’ve lost money before. This is to encourage you not to dwell on your failures. Avoid being inspired by fear. Instead, take a short break and try again. No one wins every single trade. Losing makes you wiser and makes you a better trader, only if you’re willing to bounce back from failure. (5)
- Set stop losses
When you’re actively trading, you need to set stop losses for coins that aren’t part of your medium- and long-term holds. There are several reasons why this is important. First, it will help you mitigate your losses. In case you lose, you won’t be affected as such because you expected it.
Second, it forces you to decide on the point of acceptable loss. And since you have a reference point, you’re able to track your performance and measure your effectiveness. You’re also able to strive to ensure that the losses don’t fall below the set level. If they do, you’re able to do some readjustments to prevent future losses.
Conclusion
Despite your busy schedule as a mom, trading crypto is a good way to make extra income. However, you need to get into it with some bit of basic knowledge. As a start, you’d want to invest only that amount of cash you’re willing to lose, set stop losses, diversify your trade options, and take profits at the right time. You’d also want to do a close follow-up on Bitcoin to guide you on the prices of Altcoins. Apart from getting more income, you’ll surely enjoy trading as it’s a good way of spending your free time.
References
- “Cryptocurrency”, https://www.investopedia.com/terms/c/cryptocurrency.asp
- “39% of Australian millennials believe that cryptocurrencies are a ’good alternative to having an investment property’, according to a new survey”, https://www.businessinsider.com.au/australians-property-cryptocurrency-2021-6
- “Everything You Need to Know About Altcoins”, https://www.thebalance.com/altcoins-a-basic-guide-391206
- “How to take Profit on Crypto”, https://cryptobulls.info/how-to-take-profit-on-crypto
- “How to Handle Trading Losses in Crypto”, https://itsblockchain.com/handle-crypto-trading-losses/