A Beginner's Guide to Doing Your Own Research

It's natural to be scared and excited when you're new to the crypto space. But fear not!

A Beginner's Guide to Doing Your Own Research

It's natural to be scared and excited when you're new to the crypto space. But fear not! Both within Sov Coach and the industry, there are many resources to help you learn what everything is and how to navigate it. In the step by step series, I explain the things that most beginners forget, and the absolute basics you have to know before diving in head first.

Education First - The Base

Although it may seem tempting to trade cryptos before bothering to learn the basic facts of cryptocurrencies, that is a big no. The blockchain is the base part, being the technology that a crypto is being built on top of. You must get to know what a blockchain is and how it functions, only then, start experimenting on that chain off of a centralized exchange. The good thing is that there are some excellent online resources, courses and communities that can help you get started.

Starting Small: Managing Risk

The wise say otherwise and frankly nobody here buys any hype without due diligence. Investing requires mindfulness. Cryptocurrency can change so fast with the market being quite volatile. The bias that success is guaranteed is not factual. Over time with experience and understand the technology, it can be reasonably safe,. These are the top rules that you must follow before you get your bags drained. Start small, so that you don't risk shooting yourself in the foot and gain some valuable experience.

Choosing The Right Crypto Currencies

With thousands of cryptocurrencies, avoid investing in all there is, just stick with the known few like Bitcoin and Ethereum, they are generally the less riskiest, or the most stable. There's a reason they're the hottest plays in the market, they have been around the game longer than most of the new ones, they have fared pretty well over time, and they are most ideal for beginners. Get used to market fluctuations before you start splashing around in the memes and more volatile plays.

Utilizing Reputable Exchanges

Use a trusted exchange to buy cryptocurrencies. Ones which emphasize the importance of security. Look up their security practices, reviews of user experiences, and that they have two-factor authentication (2FA) to increase protection.

Ssecurity of your investment should be priority. The sooner you can learn to self-custody and get comfortable keeping money off the exchanges between fiat conversions the safer you'll be from centralized risks.

Prioritizing Security: Protecting Your Investments

As with your physical security, security should be your main concern. Since we are human, we cannot remember random looking passwords. Using the same password everywhere increases your chances of being compromised. Storing them in browsers or cookies substantially increases your risks, use a password manager such as 1password!! By utilizing strong, unique passwords and two factor authentications for your accounts, and couple it with a hardware wallet to securely store your cryptocurrencies in self custody.

Beware of Scams: Vigilance Pays Off

Remember, the space is full of scams, so be mindful of what you're doing! Before making any trades, ensure you scrutinize every detail you can. Are you being promised high yields? Is the website legit? Are you decoding the transaction data to ensure your wallet won't get drained? Have you verified the contract address on a legitimate site, such as coin gecko or coin market cap?

Always verify contract data, check for honeypot risk, look into community and social media activity, and triple check you're not about to interact with an imposter website!

Avoiding FOMO: Making Informed Decisions

Don't let FOMO (Fear of Missing Out) get the best of you! Conduct thorough research before investing in any cryptocurrency, and avoid making impulsive decisions based on emotions. It's all to easy to jump onto the hype train and make a decision that you'll soon regret.

We will take a deeper dive into this one later.

Diversifying Investments: Mitigating Risk

Diversification is key! Diversify your investments with several other options to reduce risks and maximize opportunities of growth. As the old saying goes, don't put all your eggs in one basket. However, it's a delicate balance between diversification and over-diversification.

Updating Yourself: Applied Knowledge is Power

Stay up to date on current events and market trends through well-known news sources, and monitor official channels for updates from projects. This is super critical, as it's not uncommon for tokens to consolidate, exit from under performing or competitor chains, or sometimes even remove liquidity from contracts. Sometimes they even shut down a version of their original chains to migrate to a new and improved one.

However, the reputable projects will inform their community of such changes and how to manage your funds accordingly to avoid loss.

Emotional Management: Patience in Volatile Markets

It is common for the markets to swing abruptly up or down, especially with the ease of deploying leverage in positiions. This is normal, but managing your emotions and making long-term decisions based on short term variations is the worst way to achieve success. In the end, it will lead to a lot of lost positions. Always think for the long term, while keeping short term trends in mind.

Finding the Professionals: Tap Into Expertise

If you are not experienced with or not comfortable making decisions like these on your own, find some professionals that you can trust which are familiar with the space.

There are many resources out there to help you understand the technology and space, including but not limited to Bankless, Coindesk, AMB Crypto, and many more.

Identify the Long-Term Perspective: Learn to Be Patient

Take a long term view when looking at investing into the crypto is key. Be patient instead of chasing the "lottery wins," be diligent, and do not take knee-jerk reactions based on short-term market movements.

This way you do not break the bank or experience a compromised wallet. Brilliant idea, right?

Never invest funds that you can't afford to lose, whether you need them for lifestyle expenses or emergencies. Only disposable income should be invested, whether that's stock or crypto, just in case you lose any money (even lose access to your funds) - which is of course is a possibility with the inherent risks of investing in cryptocurrency.

Done and done: Confusion in the Crypto Space.

The world of crypto welcomes you! If you can master the above points, you'll be well on your way to beginning your crypto journey with success. Just remember to be patient, informed, and careful. Always put your safety first! Happy investing! Hope you enjoyed this post, remember to spike that like, follow and subscribe to be informed of new releases