As we had previously stated in the market sentiment series, September is historically a bad month for Bitcoin. But despite the recent Bitcoin correction, the overall sentiment in the crypto markets remains somehow bullish in the mid to long term.
With more and more newcomers flocking to the crypto space, most feel tempted to invest in altcoins. Fascinated with the potential for insanely high returns, new investors search high and low to discover the next trend in the altcoin market.
In this guide, we will offer some help and guidance on how to trade altcoins. We will share some risk management tips, alongside some technical and market sentiment analysis, in order to help our community better navigate the dangerous and volatile crypto landscape.
Step 1 — Choosing an exchange
You should choose one or several exchanges where you feel at home. The safer option is to select well-established exchanges and avoid shadier and less known ones.
Look for an exchange with an intuitive design and with services that match your needs. If you are looking to stake a portion of your holdings, for example, you should look for an exchange that specializes in decentralized finance (DeFi) services.
To minimize risks don’t forget to activate two-factor authentication and avoid keeping all of your holdings on a single exchange. Ideally, you should keep a portion of your portfolio in cold storage.
Binance, Kraken, Coinbase, and Crypto.com are among the largest and most established crypto exchanges. Zenfuse is also recommended as a platform you can trust and have an easy time navigating. It was built with innovation in mind and has several distinguishing features that many of these larger exchanges lack, such as:
- Panic sell button
- Ability to trade in multiple exchanges from a single interface
- Advanced analytics and extensive portfolio management tools
Step 2: How to find the right coins to trade
Everyone will develop their own preferences and choose their “pet projects”. That is completely acceptable, but try to keep an open mind for other altcoins and avoid becoming too tribalistic about your favorite ones. The most relevant factor may not be which coin you buy, but when you buy them.
If you are looking for altcoins to invest in, know that trends tend to overextend in the crypto market. If you observe an altcoin having a breakout, and it is backed by positive market sentiment and a significant surge in trading volume, it is likely that the trend will continue for days or even weeks.
But even better than following a coin’s pump is to buy them at lower prices. The fear and greed index indicates the overall sentiment among market participants. If the indicator shows fear, it is generally an excellent buying opportunity. If it shows greed, on the other hand, it may indicate that the market is due for a correction soon.
Finally, keep in mind that the most balanced strategy involves diversifying and having Bitcoin on your portfolio. Going 100% on altcoins can yield you higher returns, but it can also backfire rather quickly. Having a long-term position on Bitcoin helps hedge some of the risks of holding altcoins.
Step 3: Keep your health in check
What use is the best trading strategy in the world if you can’t keep your emotions under control? Having a balanced and healthy lifestyle can do wonders for your bottom line, as you’ll be able to make decisions based on logic and strategy instead of greed or fear.
Bankroll management is also vital because if you invest large sums of money it will be harder to keep emotions in check. You shouldn’t invest more than you can afford to lose, especially if you are just starting out.
About Zenfuse
Zenfuse is a powerful all-in-one platform for cryptocurrency traders and investors.
It aggregates multiple cryptocurrency exchanges, allowing control of funds via API, and powers up the trading process, making trading more profitable, simple, and stress-free.
Our cross-platform app provides rich analytics of both your portfolio and order history, giving you the ability to control your funds on a mobile device.
