A lot of people are investing in cryptocurrency and its becoming increasingly clear that its not just a passing fad. Its also clear that its potentially very lucrative though not without risks. So, before you invest in cryptocurrency, its a good idea to have a goal in mind and know how much you can afford to lose.

Not many people ask themselves why they are you investing? Most will say its to make money quick, while others will say its a future investment in blockchain technology. For others, it might just be out of curiosity. These are already very different reasons that should produce very different strategies.

For short-term gains, it would make sense to buy low and sell high but theres a lot more to it than that. Youd need to choose a coin with high liquidity, have a sense of risk management, and rebalance your portfolio every so often. Without a plan, youre simply not going to produce good results.

Likewise, if youre betting on future technology then youre likely making a long term-investment, meaning youre going to hold, or hodl. Thats what a lot of early bitcoin and ethereum holders did, but that doesnt mean its the right strategy for you and your goals. And even this purpose still requires research. Theres a ton of investment opportunities, and many of them will not pan out.

No matter your reason, dont just gamble your money away because you feel like it might do well. Have a reason for why youre investing, how much youre investing, what youre investing in, and the timing youre choosing to make the buy.

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Once you know why youre investing, ask yourself what you want to gain. For example, how much profit are you looking to make? To meet your goal, how much time, effort, and research are you willing to put in? What is your stop-loss? Before you invest, know your objective and go about it rationally. Since most people wont have much time to spare for research, you can use cryptocurrency trading tools to aid in the decision making.

Another thing to keep in mind if you have experience trading stocks, dont assume cryptocurrency trading will be the same thing. Cryptocurrencies are not stock. You can use tools like RSI (relative strength index) and ADX (average directional index), which are certainly helpful, but cryptocurrency is way more volatile and the market tends to be much more emotional than the stock market. Think FUD/FOMO: fear, uncertainty and doubt/fear of missing out.

If you can keep a level head, devise a plan and stick to it, while properly managing risks, then crypto investing might be rewarding for you. How involved you get should be dependent on your goals.

Remember, whether or not cryptocurrency is a good investment for you depends entirely on what you think the future will look like and not what the past growth of cryptocurrency has been.

(copy post) I think this information will help the beginners.

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