When people first enter the world of cryptocurrencies, the chances are they would have been drawn to Bitcoin. This is understandable as it is the premier name that people recognise and also, certainly at present, the one that appears most stable in terms of price action. When you have been in the market a while though, you may feel like moving into other areas, which is where Altcoins come in.
What are Altcoins?
Altcoins simply refer to the many, many different cryptocurrencies out there that aren’t Bitcoin. It is just a shortened version of ‘Alternative Coin’ which sums up its purpose.
3 strategies to trade Altcoins
If you are thinking of investing in Altcoins, here are three ways you can trade them in the financial markets:
1. Invest while still in the ICO phase
By doing this, you will buy the Altcoin when it is cheap. The trick here is to wait for it to spike upwards on release and then sell quickly before it falls. If you get your timing right, you can make some handsome profits here.
2. Buy on a dip
Another tactic some use is to wait for an Altcoin to hit the market and then buy on its very first dip down. This can very often lead to you picking it up very cheaply which will then, in theory, enable you to sell at a profit when it moves back up.
3. Hold tight
This strategy is more of a long-term one and needs some nerve. It simply involves holding tight until the market settles after its first spike and dip. By analysing the price movement and various chart indicators, you should be able to predict where it will head next and take a profit.
One word of warning with Altcoins – they can be very unstable and unpredictable, so please tread carefully when trading with them. Although they can bring massive profits, you really need to be on the ball and know what you are doing to avoid any nasty surprises!