by With the speed at which cryptocurrency is changing, it’s easy to get sucked into the romanticised narrative. Every day you read stories of overnight millionaires, Twitter is blowing up with some meme coin pump, and “100x gems”. But beneath all the noise, there is one thing that every successful crypto investor learns — usually the hard way;
“Understand first, trade second.”
This simple little rule separates intelligent investors from irresponsible gamblers. In this post, we’ll discuss why it is important to understand the crypto market before proceeding and how understanding can be the greatest tool in your toolbox.
- The Crypto Trap: Hype Over Knowledge
Many of us entered the crypto space out of fear of missing out (FOMO). We hear of our friends doubling their investment, we see tokens “mooning” on Twitter, and we get swept up in the moment of excitement and FOMO. We didn’t do any research. We buy in — frequently at the top — and panic-sell when prices drop.
What we forget is that trading in a speculative market without knowledge is not investing; it’s gambling. And as crypto has a volatile, unpredictable market, the odds definitely will not be in your favour unless you know what you are doing.
What You Should Know Before You Trade Crypto
1. What is cryptocurrency?
Let’s start with the basics. Cryptocurrency is more than “internet money”. It is a decentralised form of digital value, built on a blockchain. Each coin or token has its purpose: some are currencies, others provide fuel for platforms, and others are part of decentralised applications (dApps) that rely on them.
2. Tokenomics/Total Supply
Do you know the total supply of the token you are buying? Is it inflationary or deflationary? How will the token be used? Researching a project’s tokenomics can help verify whether it is a legitimate project with future value or a pump-and-dump scheme through its economic principles.
3. Blockchain Basics
Before you trade, learn the difference between a Layer 1, a Layer 2, and on-chain vs off-chain methods. Understand how consensus mechanisms work — like Proof of Work vs Proof of Stake — so you can anticipate the inherent challenges each project faces.
4. Reading Charts and Trends
Learning how to read candlesticks and become familiar with support and resistance zones, as well as trends is important for traders of every level. Investing a few hours learning to read charts can change your entire entry and exit game!
5. Safekeeping and wallets
Where will you place your crypto? Putting everything on centralised exchanges (CEXs) is not a safe place to park your money. Know the difference between hot wallets, cold wallets, seed phrases, and the basics of safeguarding your investments.
6. Market psychology
Most of crypto is driven by emotions — fear, greed, hype, and a herd mentality. Learning how sentiment drives the market can help you stay calm when things are chaos.
- How to Educate Yourself (Before You Trade)
Use trusted learning sites – like Finance Academy, Comarkets Learn, or Investopedia.
Read white papers – make sure you know what the project does before you invest.
Join communities for education – look for Telegram, Discord and Reddit groups with an emphasis on learning, not shilling.
Make practice trades – some platforms allow you to simulate trading with “paper trading”, which allows you to practise trades without real monetary exposure.
- The Advantages of Education First
- Avoid scams and rug pulls
You will start to spot red flags before it’s too late.
- Make sound decisions
You will not panic sell into dips or blindly buy on hype.
- Long term growth
You will build a solid portfolio with real value instead of just meme coins.
- Final Thoughts: Knowledge Is Your Most Valuable Currency
In crypto, everyone wants to be early — but being early without understanding is a quick way to lose money. Take the time to learn. Ask questions. Be slow.
“Crypto rewards the curious and punishes the careless.”
So, before you consider clicking “Buy” because a coin is trending, first ask yourself:
Do I understand what I am buying?
If the answer is no – pause, learn and then trade.
Because understanding always comes before success.