EP-2: What You Need to Know and How to Prepare ?


2.1 Investment Planning and Setting Goals

Before you start investing in cryptocurrencies, it's crucial to have a clear investment plan and set goals. This plan should include short-term, medium-term, and long-term objectives. For instance, you might want to profit from short-term trading or accumulate cryptocurrencies for long-term investment.

2.2 Researching Potential Cryptocurrencies

There are numerous cryptocurrencies to choose from, but not all are worth investing in. Researching the coins you're interested in will help you understand their potential and the risks involved.

2.3 Fundamental and Technical Analysis

Fundamental analysis involves studying liquidity, market demand, and relevant news to evaluate the intrinsic value of a cryptocurrency. This might include examining the project behind the coin, the development team, and expected future use cases.

On the other hand, technical analysis focuses on studying past prices and trading patterns to predict future price trends. Investors using this method often look for certain patterns in price data to help make buying or selling decisions.

Both fundamental and technical analysis are crucial tools for understanding the cryptocurrency market and can enhance the chances of making profits from your investments.

2.4 Risk Management in Investing

Risk management is a vital part of all types of investments, and cryptocurrencies are no exception. Investing in cryptocurrencies carries unique risks that must be considered, making risk management essential.

Start by setting investment goals that match the level of risk you're willing to take. Risks in cryptocurrency investment can stem from several sources, including price volatility, market instability, and technology-related risks.

Controlling the size of your investment, using stop-loss orders, and not investing money you'll need in the near future are all parts of risk management.

Moreover, planning your market entry and exit points, regularly reviewing your investment plan, and understanding your feelings without letting emotions guide you are all integral parts of effective risk management.

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