Why You Should Track Crypto Price Changes – How it Affects Your Income
Whether you’re new to trading or a seasoned veteran, the world of cryptocurrency is full of pitfalls.
12:56 23 February 2021
These pitfalls are normally related to price changes and volatility as well as other oversights that traders make. We break down the top 5 things to watch out for when trading crypto.
Track Price Changes in Real Time
You can’t be in front of a screen 24/7. Hence, it is completely expected that you might miss opportunities when you’re away from monitoring your crypto. But making an effort to check crypto charts is much better than ignoring how your portfolio fluctuates and leaving it alone.
5 minutes of tracking the prices of your currency and how the market is doing overall should give you a good indication of where you can expect it to be in a few hours. Sometimes crypto is unpredictable, but most of the time, there are signals and volatility isn’t without warning.
Keep Up to Date with Fees
Crypto exchanges update their fees according to their business demands. You might have been transacting on a single exchange for years. Over that period, fees may have been creeping up without you paying too much attention. Familiarity can breed contempt and you must be checking your exchange against others on a semi-regular basis.
Some traders compare exchanges monthly while others do it quarterly. The fact is, anyone who is shrewd and wants to make their crypto work for them will be checking exchanges regularly to ensure they’re getting the best prices.
Make Use of Conversion Calculators
This ties into the previous two points. Using conversion calculators, you can see how much profit you can make without worrying about being stung by hidden costs. Reputable conversion tools will give you a final figure for the amount you will receive for trading your current crypto.
Let us face it, we all think our crypto is worth more than we can sell it for. So, your profit might not always be as big as you hoped for. Still, a calculator will give you a concrete figure that you can compare to your buy price, and then work out your profit margin. By checking ETH to BTC price, you see if you can make a profit on that trade.
Don’t Ignore Signs
One of the biggest price pitfalls traders make is ignoring signs. For example, if your crypto stock has dropped consistently and there is a lot of bad news surrounding it, it is probably best to listen to those signs and trade rather than hold on. Bear in mind, selling on time for a small loss that you can recoup is much better than stomaching a big loss later.
Good traders and investors are never attached to a brand or crypto, they go where the market goes. Most fans won’t make money regularly. Although they may eventually get a big payout, they could equally be break-even or make nothing at all. That isn’t a smart trading strategy.
Set Alerts on Your Portfolio
Many exchanges allow traders to set orders on their accounts to sell if the crypto hits a specific value. Others will simply alert the user and allow them to decide. Many mobile applications can help monitor your portfolio by setting alarms or auto trading on your behalf.
While this method isn’t for everyone, it is a great tool to consider if you’re too busy to check in on your currency regularly throughout the day. Plus, it could save you a fortune if your chosen token plummets in value while you’re asleep.