Buying bitcoin can make you a lot of money IF you do it correctly. There are many similarities between buying bitcoin and buying stocks. In both cases you will need an wise investor mindset.
First and foremost, before you purchase Bitcoin, you must remember that cryptocurrency markets are extremely volatile. There are many people who have lost a lot of money trading and investing into the cryptocurrency markets, and there are also others who have made a lot of money, but this all depends on timing and discipline. The first question to ask yourself is to find out how much money you are willing to risk when it comes to purchasing BItcoin, and what your price target is.
Often times, it’s easy to have “sunken cost” bias, where you believe that an asset or stock will skyrocket, and believe it more because of the amount of money that you have invested. This can often lead to disappointment. Nobody wants to be in financial ruin just because they misjudged a stock or an asset, and that’s why you must concentrate on risk and reward when it comes to BItcoin. For example, if you have a life savings of $1,000, but want to invest $500 into BItcoin, is that really worth it? You might end up needing that $500 very soon, and it might take time to withdraw that Bitcoin. In this manner - it might not be worth it. However, if you have a life savings of $100,000, and want to invest $1,000 in Bitcon; this seems a lot more reasonable.
Take your time, do no rush and learn how to buy bitcoin safely.
It is essential to try to figure out where you are willing to abandon your investment.
In other words when buying any assets, you need to have a clear stop price in mind.
For example, in the stock market, those who buy stocks use a “stop loss”, meaning that the stock will automatically sell if it reaches a certain level. The idea is that an investor is using a certain theory in believing that the stock will go up, but if he is wrong, he is willing to admit that, and take the small loss rather than a bigger loss (if the stock plummets down further).
The same concept applies when you buy and sell cryptocurrencies.
Every trader and investor must put their ego to the side and realize when their theory might not be playing out.
For example, Bitcoin was almost at $20,000 late last year in December. There were many who believed that it would consolidate at $15,000, or $10,000 - but it’s very clear that they were wrong, considering that Bitcoin ended up going below $5000. For those that bought at $15,000, they were better off selling after they realized that it clearly wasn’t the bottom, rather than waiting to see the price decrease even farther. There are those that might also lack the discipline to fully stick to a strategy when it comes to trading, and decide to buy more when it isn’t the best decision. That’s why before you buy bitcoin, you have to understand and check on your strategy and emotions with regards to Bitcoin, so that you have an actual plan. As they say in the stock market, “plan your trade, then trade your plan.” If you are able to put aside your ego, have the right amount of discipline, you might just end up making a lot of money!
Joining bitcoin trading group is also a good way to learn how to buy bitcoin for profits via a HODL strategy oreven crypto automated trading. Take the time to learn about the different trading strategies in order to find the right one for you.
If you are brand new to cryptocurrency, you should start by opening a free account here.
Take your time to familiarize yourself with the platform and feel free to ask question to professionals bitcoin traders. They will be more than happy to help and guide you on how to buy your first bitcoin or place your very first trade.