Some things to know about trading and investing in crypto markets

I get up very early sometimes, to check the cryptocurrency billboard on Coin360, to see if I can find buying opportunities in the Spot market.

Why do I do Spot Trading and not Margin Trading?

The truth is that I have nothing against margin trading, but I feel more comfortable trading in the spot market, because I have never liked that that at the slightest negative movement in the market, all your investment in crypto it can go to the drain.

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And even worse if it occurs to you to use leverage, so the higher the level of leverage, the greater the risk of losing everything more easily in the process; because although, when you leverage yourself in a position at a rate of 100X it means that you can multiply your money 100 times in the case of being right; it also means that you have 100 times more chances of losing everything in the event that you are wrong in your projections and movements in the market.

Also, another thing to keep in mind is that if you think that when you buy something in the margin market (let's say Bitcoin), you are really buying Bitcoins that you can take out of your wallet, you are very wrong. On the other hand, when you buy Bitcoin in the Spot market, you are really buying it, and you can withdraw it whenever you want to your external or personal wallet.

But I always advise to be careful, even in the Spot market

Despite everything mentioned so far, I am fully aware that risks exist, even trading in the Spot market. It is because of that I advise those who are interested in operating or investing in cryptocurrencies to always be very careful with the projections and actions they carry out in the markets; and not to be invaded by FUD or FOMO from people who don't know anything about the cryptomarkets and are just spreading false rumors about what's really going on.

That is also why I also usually operate or invest, making use of a StableCoin (call it USDT, USDC, BUSD, etc), because how they are stable means that its value will always oscillate around $1 and this will allow me to monitor better the relationship of what was purchased respectively. Because if I buy Bitcoin, for example, at a certain price, I will know exactly how much I have gained or lost in the face of any fluctuations in the market just by looking at the price information.

Another thing that I would advise those looking to start trading and invest on cryptomarkets is to always manage your capital correctly and never invest or put more money on the market than you are willing to lose. Because the risk of losing exists in the markets (both with margin trading and spot trading), and therefore, we must be careful not to get unpleasant surprises and end up bankrupt.

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The liquidity of cryptocurrencies: Something important to keep in mind

Another factor that we must take into account when investing in a cryptocurrency in the spot market is that we must preferably choose projects with a very liquid level, since this will determine the degree of convertibility that it will have at all times.

What do I mean by this? Simple, you see, Bitcoin is currently the cryptocurrency with the highest degree of liquidity on the market (it is the most liquid cryptocurrency on the market), because at any time, at any day and at any hour; we can buy and sell Bitcoin if we wish, because there will always be people interested to buy and sell it.

But if the cryptocurrency is called (for example), XYZWPIOQ (I just made up the name), and we buy it because we had a hunch and then it starts to fall, so when we decide to sell it, we're going to have big trouble making it; if ever moment we getting to sell it effectively. So, by this I mean that the risk of losing money when investing in cryptocurrencies that do not have a good level of liquidity is much higher.

A good indicator of the level of liquidity of a cryptocurrency (although it is not an infallible factor either), is the market capitalization that it has; and we must be very attentive to it to orient ourselves respectively.

Learn from mistakes made

Another thing that characterizes me when I operate in the markets and that I advise anyone to develop very well is the ability to learn from their own mistakes. Because the people who stumble over the same stone multiple times and are not able to rectify or correct the course are the ones who end up breaking down in the markets.

Capital management is, by the way, what will also help us to wisely use the ability to learn from the mistakes made, in order to obtain profits in the markets.

Because learning from mistakes and being thoughtful, intelligent and timely, great fortunes can be made in the cryptographic markets, without a doubt.

What do you think about the topic discussed? Please comment.

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