Shay Benhamou’s Guide for Beginners to Kickstart their Crypto Trading Journey 

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crypto

Cryptocurrencies are an emerging asset class that appear to have grabbed a great deal of attention of late. These digital currencies have detractors and admirers in equal proportions. The former point out their extreme volatility, along with cybersecurity issues, regulatory ambiguity and their uncertain future. The latter, on the other hand, highlight the mind-boggling returns they have managed to generate over the years. It is vital for you to tread with caution when you are thinking about trading cryptocurrencies.

If you are a beginner, Shay Benhamou has put together this guide to help you kickstart your journey in the crypto space. What should you do? Read on to find out:

Don’t take big bets

In the last year alone, there are a number of cryptocurrencies that have managed to deliver mouthwatering returns. A few thousand dollars invested in these digital currencies would have turned into millions. Due to this high growth, you may be prompted to take some big bets and invest a substantial sum of money. However, Shay Benhamou warns against doing so because these are a very volatile asset class and their prices can fluctuate significantly without any prior warning. While prices have surged in the past year, there have been crashes as well and this can affect your bottom line. 

Use an established platform 

Another essential consideration for beginners is the platform they will use for trading cryptocurrencies. They are not regulated in a number of countries, so you will have to use a trading platform and there are plenty of them to be found nowadays. According to Shay Benhamou, just like you would choose an authentic and reliable broker for trading stocks, you should look for a trustworthy platform to use for cryptocurrency trading as well. This ensures that you will not be scammed, or have your money tied up. You should be thorough in your research, which means understanding its working mechanism, reading reviews and checking its offerings. 

Resist FOMO (Fear of Missing Out) 

Just like risk appetite and your financial goals play an important role in stock investing, or other forms of investment, the same should be applicable for the cryptocurrency market. If you decide to trade a digital currency because of FOMO (Fear of Missing Out), then there is a possibility that you will make a mistake and lose a large amount of money. Shay Benhamou suggests that rather than basing your strategy on speculation, you should focus more on facts. A lot of investors rely on information they get from social media, but betting on such data is an open invitation to trouble.

Consider market capitalization and trading volume 

There are more than 4,000 cryptocurrencies that exist in the market and a number of these have low trading volumes and market capitalizations. As per Shay Benhamou, it is in your best interest to opt for cryptocurrencies that have high trading volumes and an adequate market cap. This makes them less vulnerable to manipulation, which can minimize the risk associated with them. It is easier to buy and sell cryptocurrencies that have a high trading volume and market cap, due to which you should pay attention to the liquidity of a digital currency.

Keep track of global developments 

It is vital for you to keep track of the global developments that are occurring in the crypto market. According to Shay Benhamou, these can have a significant impact on prices, so you have to be quick to make a move on any major development that occurs. The fact that crypto trading happens 24/7 can come in handy because you will be able to change positions quickly. This can help in minimizing your exposure and give you a chance to take advantage of quick movement sin this volatile market.

As long as you proceed with caution and have the right knowledge, Shay Benhamou believes that you can begin your foray in the cryptocurrency market.