Useful Polygon Trading Tips from the Pros
Today, there are around 22,000 cryptocurrencies, but not many know what they are past the top names, such as Bitcoin and Ethereum.
However, if you want to get past regular buying and selling, then you can look further down the list and get into crypto staking. This is the practice of holding your assets so that the blockchain validates transactions. In return, you get a small cut of the blocks they unlock.
If this sounds interesting to you, then one place to start is with Polygon (MATIC). Read on to find out more about this crypto and how to trade it effectively.
A Little about Polygon
Polygon was first released in 2017 under the name Matic Network. This blockchain ecosystem is compatible with Ethereum, so that’s good news if you already have this cryptocurrency. It’s also used in decentralized apps (dApps), like NFTs, Defi, and DAOs.
Conventional crypto trading uses proof-of-work (PoW) systems, where you’d mine blocks by performing complicated calculations. In this case, the validators are the miners.
Polygon has its own proof-of-stake (PoS) blockchain, which uses stakes to validate transactions. The validators here are nodes.
As of mid-February 2023, the price of one coin is $1.25, which makes it a very affordable cryptocurrency to get into.
Now that you know a little more about Polygon, here are some useful trading tips.
Know How Staking Works
It’s no use jumping feet-first into something you’re clueless about, because you’ll just lose your money. Checking out a MATIC staking tutorial beforehand can be immensely beneficial since you’ll learn the terms and how the procedure works. That way, you’re not taking a shot in the dark.
Make sure you thoroughly understand how staking works before you put real money down. And when you do, don’t go all in, as you’re bound to make mistakes. Start out small, then make larger investments when you feel ready.
Do Your Own Research
On that note, you might be tempted to take shortcuts and get all your staking knowledge from “pros.” After all, they’ve already done all the research and know what they’re talking about, right?
However, you should always take what they say with a grain of salt. Cryptocurrencies can be a polarizing industry and people have widely differing opinions. In the end, all they’re making are educated guesses, so don’t take their word for 100%.
Instead, do your own research and analysis. You can then form your own opinion and lean towards certain experts if their opinions are in a similar vein.
Diversify Your Portfolio
The number one tip for any type of investing is to diversify your portfolio. When you have all your eggs in one basket, it’ll be devastating if it fails. Nothing’s ever a sure thing in investing, no matter what people tell you, so you need to spread your eggs across several baskets, so to speak. This is especially important in the rapidly changing world of cryptos.
It can be interesting and even fun to invest in some PoW cryptocurrencies, such as Bitcoin. Or you can stick with only PoS cryptos. You can even spread your investments across projects built on the Polygon network.
Whatever you do, the more diverse your portfolio is, the better. This spreads and lowers your risk.
Be Patient
As we’ve just said, the world of cryptocurrencies is always moving at breakneck speed. One moment, you’re riding high with a crypto investment worth tens of thousands, and in the next, you’re crashing with it being worth hundreds.
The markets are volatile, so it’s natural for prices to change rapidly. For this reason, you should trade with a long-term mindset.
Don’t panic when prices drop; your biggest mistake would be to sell during that time. It may be difficult, but resist impulsive decisions and stick to your long-term plan. Peaks and dips are normal, so ride them out.
Stay Up-to-Date With Network Metrics
Network metrics are things that indicate how healthy the Polygon network is. As you can see, it’s vital that you stay up-to-date with these, as they can help you make informed trading decisions.
Some network metrics you should keep track of include:
- Gas fees
- Transaction volume
- Network hash rate
- Block time
- Network utilization
- Staking activity
If you’re having a tough time making sense of things, do more digging online. There are many fantastic resources that’ll walk you through these metrics.
Always Read the News
You should always have your ear to the ground, especially given the volatility of cryptocurrencies. Sign up for news and updates for the Polygon network.
You should also keep track of the DiFi projects built on Polygon. How well (or badly) they do can significantly impact how your investment does.
In addition, monitor the liquidity of your tokens. In general, you’ll want to avoid making trades when there’s low liquidity. It’ll be hard to enter or exit a trade quickly.
Use Stop-Loss Orders
Stop-loss orders are immensely helpful in, well, stopping your losses. It’s an automatic process where the tool sells your assets at a certain threshold to minimize loss.
For example, let’s say you bought MATIC coins for $1.50 each. You can place your stop-loss order at $1.00. If the value of a MATIC coin ever reaches that value, then the tool will automatically sell your coins. As a result, your total loss is $0.50 per coin.
You can place the stop-loss orders at certain values, but you can also set them at percentages of the current price.
Don’t completely rely on stop-loss orders though. In a fast-moving market, you might lose even more money if the price bounces back up quickly after you’ve sold.
Give Staking Polygon a Try
Those looking to start investing or expand their horizons should consider staking Polygon. It’s a different kind of trading when compared to PoW cryptocurrencies, which can add a fresh perspective to things.
Just remember to diversify your portfolio, do your own research, and stay up-to-date on the network’s health and the crypto markets. You’ll set yourself up for success if you do these things.
Check out the rest of our blog if you want to learn more about cryptocurrencies.
