Tips for traders and investors

The introduction of cryptocurrencies dates more than 10 years ago, when the first cryptocurrency, Bitcoin, was introduced. Ever since then, the decentralization of finance has been taking place, with some projects and ideas more successful than others. What most cryptocurrencies as well as all decentralized finance projects have in common is the will and goal to empower individuals and give the power over their finances back to their own hands.

This is however being excessively difficult, when huge amounts of cash and money are being stacked in few big corporate firms such as Google, Amazon, Apple of Facebook. Nevertheless, there are still individuals who are trying to increase their wealth by trading and are using the volatile world of cryptocurrencies to do so. What might look like a clever idea, since cryptocurrencies are offering great returns and yields in the case of DeFi, has its own drawbacks. These however can be offset, if the traders are smart enough to follow very specific rules designed to provide them with necessary edge. Here are just some of the rules that one might want to take into account, if he/she wants to be successful as a trader of cryptocurrencies.

Diversification

Never putting all eggs into one (or two) baskets will help you protect yourself from erasing your portfolio. What might look like a great opportunity to earn quick money if you know something is going to go up, might turn out in a complete disaster. Because there is no such thing as a certainty of a price movement in the markets. Therefore, to protect your trades and portfolio, always try to diversify, picking more different cryptocurrencies across different types (tokens, anonymous cryptocurrencies, platforms, stablecoins, exchange tokens etc) to lower the risks.

Manage your positions and risks

This advice should be handy especially for traders, but it can apply to investors as well. When trading (or investing), be sure to know your risk limits and your risk appetite and consider treat your trades in such a manner. Are you afraid of losing a lot money in a trade? Put a tight stop loss. Do you want to see 50% increase in your trade. Make sure that you understand that with higher profit there is also a higher risk.

Also, always be sure to have your trades under control with a reasonable amount of opened trades. Are you new to trading? Never have more than 5 open positions, because you could find yourself very quickly overwhelmed with all the things you need to look for. When it comes to risk managing, rule of a thumb would suggest to never put more than 10% in one position and never have bigger stop loss than 10%. Therefore, if the trade goes completely wrong (and some of them will), you are only risking 1% of your portfolio in any given trade.

Be responsible — for your gains as well as for your losses

As a trader, you should only blame yourself for your losses. That does not mean of course that you can not watch other traders or get inspired by their ideas. However, every trade that you pull is yours and only yours. Therefore, the outcome, whether is positive or negative, is again, yours and only yours. If you want to be successful in this sector, either as an investor or as a trader, you have to make sure that you are 100% responsible for your portfolio and whatever happens to it.

Find like-minded people

This last point might not be as much of a trading or investing advice as all the other above, however, it is still might be helpful. When it comes to trading cryptocurrencies or investing in them, there are many different portals, websites or projects that are doing great job in helping newcomers to adapt in the sector. Sadly there are still some that are trying to scam people and steal their money and therefore one has to be very careful of who to trust.

Fun Gram is trying to do exactly this. To create social network for people that are trying to get in touch with other likeminded people, who are doing their best in taking their financial freedom back into their hands. And whether that is via trading, investing of cryptocurrencies or DeFi projects is not important. What is important is the will and of the people to learn and help each other.

FUNGAM is a search platform based of decentralized blockchain which aimed to establish a simple and intelligence navigation portal to the blockchain world.