Step 6 – Create a wallet to store your cryptocurrency.
The purchased cryptocurrency should not be stored on the exchange, it should be kept in a safe place - in an electronic wallet. There are two main types of wallets: "hot" (online wallets) and "cold" (hardware wallets).
"Hot" wallets are those located on services connected to the Internet, such as an exchange or a mobile application. They are convenient for active trading, but at the same time have a high probability of being hacked.
‘Hot’ wallets are best used when something needs to be purchased or when active trading is taking place on the exchange. Or, if we leave a certain amount in the wallet for strategic purposes: purchases, resales, etc.
‘Cold’ hardware wallets are devices for storing cryptocurrency that are not connected to the internet. They are more secure and suitable for long-term storage.
The following hardware crypto wallets are the most commonly used:
Ledger;
Trezor;
For small amounts of cryptocurrency, it is more convenient to use ‘hot’ wallets. However, if you plan to make serious investments, for long-term storage, or large amounts, then it is only ‘cold’ storage.$BTC
Step 7 — understanding risks and diversification.
As we have already mentioned, the cryptocurrency market is characterized by high volatility; prices can change significantly in a short period of time. Therefore, it is important not to invest more than you are willing to lose.
A key point is also diversification. It is not advisable to invest all funds in a single cryptocurrency, in one direction, or to keep them on one specific exchange.
It is wise to diversify your investments among various assets and to keep funds in several wallets. This helps reduce risks. Step 8 — constant focus on news and trends.
The cryptocurrency market is very sensitive to news, so it is important to keep up with current information. First and foremost, this includes changes at the legislative level, innovations in cryptocurrency regulation, etc. The market is strongly influenced by global news, world events, and statements from major companies or investors regarding their support or rejection of cryptocurrency.
Also, if you want to engage in trading, you must learn to perform technical analysis, analyze charts, and the market. This is a separate, quite complex direction. $BNB
Step 9 — learn to analyze charts and the market as a whole.
Technical analysis does not always work, and charts can be misleading.
It is essential to understand that any market is manipulative, and charts are pictures drawn by market makers for us. These are the people who support the pricing policies and financial model of any project along with the exchanges on which they are present.
Therefore, a newcomer must understand technical analysis and charts to know how promising an asset is, and whether it has a future. In order to acquire an asset for long-term or short-term goals and to make a profit, one must be able to look beyond just the chart.
Step 10 — analyze the news.
Usually, any news is ‘pulled’ into some kind of connection with the price of #Bitcoin , #Ethereum or any other well-known cryptocurrency.
It is necessary to learn to analyze them to see who benefits from the information and how to use it as a tool, in addition to technical analysis, chart analysis, on-chain analytics, etc.$TRB
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