Although crypto is a new and exciting industry, it has its risks for those who are interested in investing in it. And with thousands of new cryptocurrencies emerging on exchanges and trading platforms, anyone who considers investing in a cryptocurrency should also take into account the volatility and speculative nature of the market.
No matter the state of the market, crypto traders should have a thorough understanding of crypto as well as trading principles. Only invest what you’re prepared to lose. The risks of trading cryptocurrencies are mainly related to its volatility. They are high-risk and speculative, and it is important that you understand the risks before you start trading. If you have impeccable risk management skills and nerves of steel, here’s what you need to know to get started trading crypto.
– Volatile: unexpected changes in market sentiment can lead to sharp and sudden moves in price. It is not uncommon for the value of cryptocurrencies to quickly drop by hundreds, if not thousands of dollars.
– Unregulated: as a decentralized currency, cryptocurrencies are currently unregulated by both governments and central banks. They were developed to be free from government oversight or influence and are instead monitored by peer-to-peer internet protocol.
– Discontinuation: cryptocurrency trading carries additional risks such as hard forks or discontinuation. When a hard fork occurs, there may be substantial price volatility around the event. This may entail you to stop trading if you do not have reliable prices from the underlying market.
– Gapping: market volatility can cause prices to move from one level to another without actually passing through the level in-between. Gapping (or slippage) usually occurs during periods of high market volatility. As a result, your stop-loss could be executed at a worse level than you had requested.
– Cost: you should review all costs involved before you trade. Charges may be higher when trading cryptocurrencies. The likelihood of making a profit versus the impact of these fees should be considered.
– Pricing variations: compared with currencies, there can be significant variations in the pricing of cryptocurrencies used to determine the value of trade positions.
You should fully understand the risks associated before you start trading. Only invest if you are an experienced investor with sophisticated knowledge of financial markets. Cryptocurrency trading may not be appropriate for everyone. We recommend that you seek independent professional advice, if necessary,
To trade without a hassle, you can try RoboFi. With RoboFi, you only need to deposit/stake a percentage of the token and RoboFi will do the rest. Profits and losses are based on the full value of the trade.
RoboFi (www.robofi.io) is a Defi platform that envisions a marketplace for revolutionary Dao crypto trading bots. Through its IBO (Initial Bot Offering) system, community members can maximize their earnings in an easy, simple, and secure way. We create a safe and transparent environment based on blockchain technologies that help developers bring crypto trading bot platforms to the market. In addition, individuals will have easy access to these bot applications, thereby generating more earning opportunities. RoboFi ecosystem is fueled by the $VICS token.