From 10,000 US dollars to 50,000 US dollars in just a few weeks – those who got into Bitcoin money at the right time were able to achieve high returns quite easily in recent months. The catch is that as quickly as the price rises, it can also fall again. So the market is volatile – and it is all the more important to follow a few “rules” when crypto trading.

Unpredictable crypto prices

We have collected tips that should make it easier to get started in trading and minimize the risk. Still, even the most cautious trader can be unlucky, to a certain extent (and it is higher than many believe) the rates are simply unpredictable. Moreover, anyone who remembers Gamestop knows the power the community can muster – which makes the market additionally unpredictable. Entire Telegram groups are exclusively occupied with discussing the next “pump” – i.e., agreeing on a digital currency whose price is driven up by coordinated purchases. In this respect, there are no securities in this game. All the more important to follow a few rules.

Do Your Own Research

Crypto ResearchUnlike ETFs and funds, cryptocurrencies are difficult to assess, neither in the short nor in the long term. However, they are not necessarily suitable as a classic speculation object either; after all, they are primarily a means of payment (even if most cryptos are not yet used for this purpose). Regardless of this, the first rule is that anyone who invests should know where the money is going. This also means that dealing with the topic is not only advisable, but actually indispensable. The lack of regulation – unlike with fiat money – ensures that the market sometimes acts extremely sensitively – a single tweet can, to exaggerate, decide over millions. The only way to react in time – or at least to know which currencies are volatile and how: Thorough research and constant exposure to the topic.

Don’t fall for FOMO

“Fear of missing out”: when prices rise, the whole market often starts moving quite quickly. There are psychological reasons for this: The fear of missing out on a hefty profit then goes around – and drives new investors into the tentacles of Kraken, Coinbase, Bitpanda and Co. Sure, the assumption makes sense: If I invest quickly, I could also quickly make a little more out of a little money. However, first of all, many people always have this train of thought and the inevitable end of the bull run is usually closer than you think – see the Bitcoin trough of the last few weeks. So the rule is: Don’t fall for FOMO. Prices that rise usually fall again.

Only spend what you can lose again

A rule that should actually apply to all areas of life: You can only spend what you earn – or what you can actually lose. It is not advisable to invest sums that will later be lacking in other areas. Anyone who invests should set an upper limit and stick to it. It is better to invest small sums on a regular basis. Many brokers already offer functions for automated monthly purchases, similar to fund savings. The money that normally – outside the pandemic – remains in the bar, can thus be invested monthly. Although this also involves a high risk, the loss remains manageable in the event of a price drop.


HODL should actually be called “HOLD”, which would be easier to understand. The user “Gamerkyuubi” “invented” the term unintentionally in a Bitcoin forum, basically it is a typo. He meant to write “I am holding”, which became “hodling” – and a new trending term was born. In 2013 that was, during Bitcoin’s first major slump. What is meant by this is simply investing for the long term. An example: at the beginning of 2019, one Bitcoin cost about 3,400 euros, a year before that it was worth about 14,000 euros. So anyone who bought in 2018 made a tidy loss at that point – and because the price fell in the weeks and months before, many also sold. But in July 2019, the price was already back at around 11,000 euros – and then shot up massively from October 2020. In other words, those who hodl buy a cryptocurrency with potential (which brings us back to the research) and bet on the price rising properly in the long term. However, there are of course no guarantees here either – and long-term investments are also subject to risks, albeit different ones. Who remembers the unlucky guy who had 7,500 Bitcoins on a hard drive and lost them?

Day trading is for professionals

Day trading with BTCThe opposite of HODL. Those who daytrade must consider it almost a profession – and invest a similar amount of time. Good day traders deal with the market around the clock and ultimately hope to catch good price movements. This can perhaps be predicted to a certain extent via relevant forums and messenger groups, but nothing is fixed with cryptocurrencies.

Daily trading is for advanced traders and professionals – just like on the stock market. The whole thing is certainly exciting, but should only be tackled with sufficient experience – and with capital that can theoretically be lost.

Compare fees

Whether Bitpanda, Coinbase, Kraken or Binance: anyone who wants to buy and sell cryptocurrencies must choose one or more brokers or exchange platforms. The biggest differences lie in the fees for fiat transfers, ranging from a comparatively expensive 1.5 percent at Bitpanda and Coinbase to 0 percent (SEPA) at Kraken. Moreover, not all trading platforms carry the same coins – so a preliminary comparison is worthwhile here as well. We have compared all the major trading platforms here.

Store your Crypto

Or: Safety first. Purchased coins can be stored in “hot wallets” (with Internet connection) or “cold wallets” or “hardware wallets” (physical storage without network access). Especially those who plan for the long term can consider the second step – but beware: physical storage media also tend to get lost. In all cases, wallets, broker and exchange apps should be appropriately secured. This means using two-factor authentication wherever possible, not writing down passwords, and using secure access codes.

It’s never the perfect time

1,000 euros in Cardano – and the next day there are still 800 euros in the wallet? This is understandably annoying, but it often makes less than you thought. There is no such thing as “the” perfect time to invest. People who bought Bitcoins for 1,000 euros are annoyed that it wasn’t 200 euros – and those who bought for 20,000 euros would have preferred to pay only 1,000 euros. In the long run, however, both cases have won in this example. Also, those who overlook a price jump need not fret: What rises usually falls again – especially on the crypto market.

Start small

Entering the crypto market is often difficult and newcomers often make mistakes. To avoid being overwhelmed, beginners should start with small trades. Only when they have a better understanding of coin trading should they venture into riskier investments. Practice makes perfect! Also important: a trading platform that supports beginners and doesn’t overwhelm them. In some cases, this may mean more fees; however, there’s also no point in fiddling with tools you don’t understand.

Always diversify

Just like in the stock market, diversification is the key to success in cryptocurrency portfolios. Traders who have done their homework should invest in different coins, which can be much safer than putting all their eggs in one basket. However, many digital currencies move in similar waves, so it’s more feasible to put some of your profits into even more unfamiliar coins – and then hope to have the new bitcoin in your portfolio. More importantly, with crypto investing alone, the risk is very high. If you want to invest money, you should also think about safer backups like funds or gold.

Set profit targets and stop losses

Because the crypto market can be very unpredictable, traders should set certain safeguards to avoid losing too much and risking too much capital. Most importantly, they need to know when it’s time to get out of a trade. Specific profit targets are important. In doing so, traders set a specific value at which they will sell their coins, even if there is still room to go up. Many investors tend to get greedy and wait too long to sell assets. This can take revenge when the price crashes, which is why profit targets are an effective precautionary measure. Stop losses, on the other hand, protect against losses. This is a price floor at which assets are automatically sold. This way, traders can quickly get rid of their coins if they fall back to the value at which they originally bought them. This way, they avoid high losses and at least keep their investment.

Do not listen to others

When making a concrete decision such as an actual buy or sell, traders need to act confidently. In other phases of crypto trading, advice is definitely useful, but in the end, investors must rely on their own intuition. Drawing last-minute advice from other traders only unsettles and confuses. Such last minute tips usually lead to bad decisions. By the way, this also includes all the short-term investment tips from more or primarily less reputable sites, Twitter accounts and supposed Facebook financial professionals.

Own email account for trading

Using the regular email address for crypto trading is risky. Traders are vulnerable to hackers as a result. That’s why investors should create a separate account just for crypto trading. Ideally, the account should be secured via two-factor authentication to provide optimal protection against cyber thugs.

If you want to invest your money profitably, you’ll find that it’s not that easy to do so during a period of low interest rates. Due to the fact that the zero interest rate policy pursued by the European Central Bank (ECB for short) is unlikely to end in the near future, alternatives are therefore required.

The crypto market may be particularly interesting here. But anyone who invests his money in digital currencies should know that (serious) losses may very well occur. The risk should not be underestimated under any circumstances. Before buying coins of a certain cryptocurrency, you should get to know the topic, try to understand the “peculiarities” and consider a few tips and tricks to be able to avoid beginner’s mistakes, which sometimes cost a lot of money.


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