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Practical guide: how to buy cryptos for beginners

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Written by   8
3 weeks ago

Learn how to choose the right time to buy a cryptocurrency and how to build and distribute your portfolio.

I'm sure you've wondered: is it possible to learn how to invest in cryptocurrencies for beginners? Knowing how and when to buy cryptos can be a tricky process for beginners. When someone gets into cryptocurrency investing, it is usually because of a friend, who tells them, tells them, that they make money: "invest, this is a gold mine!". Possibly, this is the case if you know how to read cryptocurrency charts and more or less get a handle on technical analysis indicators. Otherwise, sorry, you are going to be whale meat (at all times we are talking about spot investments, not trading).

How to invest in cryptocurrencies for beginners: how to buy cryptos without having a clue about indicators

In this guide to learn how to buy cryptos for newbies we are going to describe in a few simple steps how to buy coins and which moment is the most appropriate, as long as the market is flowing correctly. This is fundamental to be clear about: if Bitcoin goes down aggressively and goes to the guano, it is to be expected that the rest of altcoins (either cryptocurrencies or tokens) will follow the negative slope of BTC.

I assume that you know which coin you want to invest in because you have made a previous exhaustive study (and not because The Wolf recommended it to you (hahaha). This guide to learn how to buy cryptocurrencies is designed for those who want to holdear (keep the investment in the medium term) and make the so-called DCA (Dollar Cost Averaging ).

When learning how to invest in cryptocurrencies, there are many questions: when is the right time to buy? which technical analysis indicator should I use? is now the best time or should I wait for the price to go down?

When is a good time to buy a cryptocurrency?

A coin is profitable to start DCA when its price is at least 50% of its last Ath (all time high).

Let's look, for example, at the behavior of the rising Solana cryptocurrency on September 14, 2021:

On the same Coinmarketcap website, select the option to view the chart using Tradingview (top left corner), then click on Price range and look for the ath of the coin. It follows below. We always choose daily chart.

We plotted and came out that SOL's price is down 28% from its all-time high. Is it over 50%? No. Therefore, it is not yet time to enter.

Why is this technique used? Very easy: usually, the so-called "good projects" (as opposed to the coins of fuck-all positions in the Coinmarketcap rankings), usually lose at Fibonacci levels a 50% retracement, 68% (or even more) if Bitcoin goes down. If you keep buying as it goes down from 50% bit by bit, you know that someday it will return to its ath by recovering a gain of more than 50%. Or even more.

Example ORN

Here we see perfectly that we are at 70% of its ath, it is a good project and it is worthwhile to start buying progressively. The strategy is to invest little by little if it continues to fall, up to the limit you intend to invest.

How to buy cryptocurrencies safely on spot

In summary, to know how to invest in cryptocurrencies for beginners just follow these few steps:

Step 1: Choose your coin.

Step 2: Is it a good time? Plot the price and check how far it is from its ath.

Alternative approach: if Bitcoin has corrected 50% or more, buy whatever you want because they are already on the floor.

How to create and distribute your cryptocurrency portfolio

Personal recommendation of the safest portfolio creation according to your investment capital:

  • 50% Top10 coins (can be 1 or several).

  • 30% Top10-100 coins

  • 20% Possible gems (100 and up), bought progressively and sold progressively. If you make an X2-X3, you get your investment back and leave your profits floating. In this way, if a bearish period arrives, you will only get the profits and not your investment.

and well so far today's article I did it a little because it is the general information that I have learned over the months as a small basic guide to learn how to make investments taking advantage of the low prices in the market due to recent events that have affected a lot the crypto prices recently I hope this will be useful for most newbies as well as me that still continue learning the blockchain world and its secrets.

until panduru1997 bids farewell until a future article.......

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