When people think of Cryptocurrency, one of the first words that come to mind is undoubtedly "complex." Although the notion has been around for over a decade, many people still don't understand it completely, and who can blame them? Cryptocurrency trading can be a tad overwhelming. And why not? The market is as volatile as; well, we can’t think of anything that is so much volatile.

Since the launch of Bitcoin, many new players have entered the market, leading to more than 5000 Cryptocurrencies. As a result, it can be a daunting task for traders to decide which Cryptocurrency to trade. So if you are trying to figure out which Cryptocurrency to trade, you need to know the basic fundamentals of trading.

In this blog, we have covered 7 tips on how to pick the right Cryptocurrency to trade

1. Blockchain Technology

The underlying technology is essential for a Cryptocurrency's success. Therefore, you must comprehend how it will perform in comparison to its competition and what makes the technology unique. Keep an eye out for the major innovators and Cryptocurrencies that will dramatically disrupt the respective industries.

Let’s consider Ethereum -

It is the second-largest Cryptocurrency which is popular amongst developers for its ability to build and integrate the Blockchain into their applications. Additionally, it is also known for smart contracts, Ethereum Virtual Machine (EVM), DApps, NFTs, and many more. Ethereum has grown drastically to become one of the most popular Cryptocurrencies in the world because of its cutting-edge technology.

2. The Cryptocurrency Community

The Cryptocurrency community has helped play a part in its success, which is why it is a great place to start your research work. You should look for Cryptocurrencies with large communities and dedicated followers. Since this indicates that people genuinely believe, are interested and are engaged in Cryptocurrency. You can browse through several subreddits, YouTube channels, and community comments to see what people are saying about your potential investment.

Also Read, 5 things you should know before Crypto trading

3. Fundamental Analysis

If you are new to Cryptocurrencies and not into the technical stuff, you can look at the underpinnings of the investment, such as their goals, objectives, strengths, roadmap, team, and so on. In the long haul, fundamental analysis will help you just as much as technical analysis.

For instance -

• The goal of Cryptocurrency helps you learn whether it is long-term or not; if not, then it calls for a warning flag.
• The team is in charge of a coin's success; they're the ones who make all the key decisions. Hence, it is crucial to investigate and evaluate the team behind Cryptocurrency since the team has the responsibility to ensure the success of the project.
• When choosing which Cryptocurrency to trade in, opt for a coin with a realistic roadmap and long-term development prospects.

Moreover, whether it's their white paper, social media, or website, try to understand the objectives of the coin's future and look at the community to see what kind of culture is forming.

4. The White Paper

A White paper is one of the essential places to assess a coin's fundamentals. Thus, it is crucial to pour into the white paper before investing. You may have to sift through some technical jargon, but don't let that deter you as it contains valuable information and insights. Usually, the launch of a new Cryptocurrency is preceded by a white paper. It outlines the coin’s purpose, objectives, technology, operations, basically its overall vision. It also reveals information about a Cryptocurrency's professionalism and credibility.

5. Technical Pricing Analysis

“Dr Phil” McGraw quoted, “The best predictor of future behavior is past behavior”. Even though this isn’t always the case, particularly with Cryptocurrencies, given the market volatility. However, price fluctuations reflect the coin's history and whether it will be a good investment in the future. For example, the value and range of volatility, furthermore if the coin is resilient.

You must also pay attention to the historical charts, demand and supply, circulation, trading volume, market cap, chart patterns, and stability of the Cryptocurrency.

Also Read, 8 Tips For Successful Crypto Trading

6. ICOs Investment

Initial Coin Offerings (ICOs) are the preferred means of raising operational capital and launching new coins for digital currency businesses. It entails investing in a company that can provide the product and offer you a return on your money, similar to the stock market. When contemplating investing in an ICO, you must take extra precautions. It is not a matter of science to know whether or not to invest in an ICO; rather, it is a matter of paying great attention to the subtleties that most people appear to overlook when focusing solely on the promised returns.

Therefore, you must rely on your knowledge of the offering, what makes it unique in the industry, and the team behind it. Because you're starting from scratch, investing in a solid ICO will enable significant gains. In addition, you can examine previous successful ICOs and keep track of industry trends to help you identify the next lucrative ICO.

7. The Basics

With more than 5000 Cryptocurrencies in the market, it is always advisable to mitigate your risk by diversifying your Investment portfolio. It is crucial to conduct independent research, plan, and strategize before Crypto trading. You must also have an exit strategy when the market gets messier, set profit targets, use stop loss, place sell orders, and manage your risks. One of the most well-known reasons why many traders fail in their endeavours is that they give in without a thorough study.

History has it that the top Crypto traders have perfected the skill of keeping their composure even when things appear to be out of control. This is why you must learn to trade objectively rather than emotionally. Start trading when you are confident about making decisions in terms of entering and exiting trades. Once you've decided on a coin to trade in, stay vigilant and updated at all times. Keep an eye out for any news about your investment and continue to research like you did before you invested.

It will take time to grasp the world of Cryptocurrencies, so don't put too much pressure on yourself to become an expert right away. While there are no "safe bets" in the Crypto world, consider this blog as a checklist guide. It is crucial to follow the basic investment principles and to make sure your potential investment checks all of the boxes.

Disclaimer: The author’s views and opinions are for informational purposes only and do not constitute financial, investment, or other advice.