Crypto trading is a risky business. Many times, the huge price movements of crypto coins can be attributed to many factors. Sometimes, a single tweet from a big shot in the industry can cause a major shift in prices, moving either direction for a coin or even multiple coins.
However, there are instances where an official announcement from well-known companies and government agencies really causes prices to go sky high or dive into oblivion. It is not unheard of for an altcoin to increase by 100% in price after having been added on a major exchange, either. Even more surprising is that some coins have reached record highs shortly after listing on certain exchanges.
Crypto trading might look to an outsider like a game of chance, where one invests in something and watches to see if what they're invested in turns out profitable, or it does not. However, there's more than meets the eye. The price movements aren't totally random. There are various factors that might affect the price of a given coin.
Things to consider
1) Do not think of investing more than you can afford to lose. I cannot stress this enough. This is the golden rule in trading and investing in general. Please do not ignore it. Cryptocurrencies are especially risky because of their volatility. Even if you plan on holding for six months or more, make sure you have a decent chunk of change left over to buy something nice with.
2) You need a strategy, and you need to think before acting. This includes taking a step back and looking at the bigger picture. This is not a get-rich-quick scheme, nor is it supposed to be one. It takes a lot of time and effort to build up your stash of crypto coins. Make sure you're ready for that before investing anything significant into crypto trading or mining.
3) Don't believe everything people say on social media. Yes, sometimes there is insider trading or even just rumors that can affect the price of a coin. However, you need to understand that many times these are nothing more than plain speculation, and it's up to you to determine whether or not they hold any water at all. Don't ever base your trades on mere rumors unless you have some hard proof of their legitimacy.
4) Be wary of pump and dump groups on social media. While some of them might actually have a decent following, it's still hard to tell if they're legitimate or not. There are some groups who claim they have inside info that can help you get in early on new currency or currency before the wider market gets hold of it. Do your homework before joining any group and don't necessarily believe everything they say.
5) Try to stay away from shady exchanges. You will find many small exchanges out there that have a big impact on the crypto-sphere, but many times their practices can be unethical or even outright illegal. Examples would include withholding customer balances, refusing to pay out withdrawals, etc. Always read their terms of service fully before signing up for their services. I cannot stress this enough. It only takes one shady exchange to lose your funds in order to give you a headache when trying to cash them out or use them at any point in the future.
The takeaway
I wish you the best of luck in your crypto trading or investing ventures. With that being said, always remember to do your own homework before making any trades, especially if you're new to all of this. There are lots of good sources out there on how to trade cryptocurrencies and other things on Reddit. You'll find plenty of information there if you just know where to look.