How much money do you need to have in order to try your hand at digital money trading, where to start and how not to lose your starting capital.
Trading is quite a risky way of earning, which requires knowledge and skills. Trading cryptocurrencies is even more risky because it is an extremely volatile asset. On the other hand, high fluctuations in the value of digital money allow not only to lose capital quickly, but also give an opportunity to multiply it.
“You can start trading cryptocurrency from $100-200.”
Familiarity with cryptocurrency trading is better to start with the spot market, I am sure the expert on finance CEX.IO Broker Alexander Yanyuk. It will allow to get acquainted with technical analysis, develop a trading strategy and trading discipline without exposing the deposit to high risks.
When determining the starting amount one should follow the rule that its loss should not affect one’s welfare in any way, says Yanyuk. But it should allow taking part in trading long enough to be able to master trading tools and work out a strategy.
“For that, $100-200 is enough. You should not try to earn money right away, it will have a negative impact on psychological stability. At the initial stage, the main objective should be to develop trading discipline and a trading strategy that will protect you in the future when operating with considerable amounts of money using leverage,” explained Yanyuk.
If the first trading experience will be successful, then in the future one should analyze the average profitability, which was obtained while working with a small deposit. Also the expert recommended to set a goal in real terms, which should be achieved in a year or a month. For example, if the yield was 10% per month, then in order to earn $1,000, the deposit should be $10,000.
“In the ideal case, that is, with a uniform 10% return from month to month, the income in real terms would increase as the deposit would increase. But there are no ideal cases and one should always strictly follow the rules of trading discipline, this is the main guarantee of successful trading in the long term,” – said the specialist.
“$1000 will be enough to start trading.”
One of the main advantages of the crypto market is that you don’t need a large start-up capital to get started, explained Michael Ross-Johnson, CEO of the cryptocurrency p2p platform Chatex. According to him, a novice trader would only need a thousand dollars to buy some digital money, transfer it to an exchange and start speculating with the chosen strategy.
“On the one hand, this amount is enough to buy cryptocurrency, on the other hand, it is not so big that you fear losing it. Until you have experience and practice, you may lack knowledge and understanding of the market, and it’s easy to go without an investment,” Ross-Johnson warned.
“The more money you have in your account, the more comfortable and secure it is to trade.”
The most comfortable amount to trade cryptocurrency should be such that trading takes place with minimal risk, that is, without the use of leverage, explained the lead analyst of 8848 Invest Victor Pershikov. For example, $13,700 is enough to trade bitcoin “1 to 1”, or about $400 at the current exchange rate to buy ETH.
“The more funds in the account, the more comfortable and secure the trading will be,” Pershikov explained.
The smaller the funds, the more borrowing is needed to buy or sell digital assets. Margin trading can be profitable and effective if the trader has experience and knowledge of financial analysis. But a beginning trader has to learn how to control risks and avoid losses in order to reach an acceptable level of income over time, the expert stressed. That’s why the initial sum of funds must be sufficient and correlate with the current value of the assets which the investor is going to trade.