“The investment of cryptocurrency is made easy: a beginner guide on crypto, cold wallets and stop commands”
When it comes to investing in cryptocurrency, many people are intimidated by market complexities. But with the right tools and strategies, anyone can succeed in investing in the crypto. In this article, we will more closely examine three essential concepts: cryptocurrency (crypto), cold wallets and stop orders.
What is crypto?
Crypto, abbreviation of cryptocurrency, refers to the digital or virtual currencies that use cryptography for security and are decentralized, which means that they are not controlled by any government or institution. The best known example of a crypto is Bitcoin (BTC), but there are many others like Ethereum (ETH) and Litecoin (LTC). Crypto can be invested in the use of various platforms, including exchanges, online brokers and wallets.
What is a cold wallet?
A cold wallet is a offline digital or paper storage device used to contain cryptocurrencies. Unlike a hot wallet, which is connected to the Internet and is accessible at any time, a cold wallet forces you to physically transport your keys and funds with you. This provides additional security against hacking and flight.
What are the orders of stop?
A stop order is an order to buy or sell a cryptocurrency when its price reaches a certain level. The term “stop” refers to the price where the order will be executed, whatever the conditions of the market. By fixing a stop price, you can limit your losses if the price drops and avoid getting caught in a market slowdown.
Installation of a cold wallet
To start investing in the crypto with a cold wallet, follow these steps:
- Choose an exchange of renowned cryptocurrency or an online broker that provides integration of cold wallets.
- Create an account and finance your account with your favorite payment method.
- Configure your cold wallet by important your private keys and buying the necessary equipment (for example, Ledger, Trezor).
- Transfer your funds to the cold wallet using a secure transfer process.
Use of stop orders
Once you have configured your cold wallet, you can start using the stop commands to manage the risk:
- Set a stop price for your cryptocurrency by around 10 to 20% below its current value.
- Place an order at the market value when the price drops below your stop level.
- If the price reaches your stop level without reaching it, you will not be executed on the trade.
Why are the stop orders essential
Although the diversification of your portfolio with other assets is crucial, the arrest prescriptions can provide a safety net compared to the slowdown in the significant market. By limiting potential losses, you will avoid the temptation to maintain a losing position, which could cause significant financial losses.
In conclusion, investment in crypto requires technical knowledge and experience, but with a cold portfolio and stop orders, anyone can successfully manage their portfolio. Do not forget to always do your own research, set clear objectives and remain informed of market trends to succeed in the long term in the world of cryptocurrency.