First advice for everyone in crypto – just DYOR!
One of the most hyped rules in crypto trading is DYOR. Our MEXC Blog team prepared a comprehensive DYOR-guide for you.
So, to start with, DYOR is short for Do Your Own Research. Many analysts describe the current cryptocurrency hype as the Wild West. Like the Wild West, the cryptocurrency arena has many fraudulent activities.
Investors that are unaware of what is going on can be tempted by tricksters looking to make a quick profit at others’ expense. That’s why crypto experts always advise traders to do their research. This advice is not exclusive to the crypto ecosystem. Conventional trading and investing also have this term. It is also valid for people on the Internet because it is very easy to access misinformation or misleading information.
How did it start?
The term started on social discussion forums like Reddit and Twitter. Many new users joined these forums to discuss Ripple, Ethereum, and Bitcoin. This was the time when interest in Bitcoin was on the rise. As Initial Coin Offerings (ICO) began launching, users started to join these forums to get advice about cryptocurrency prices and whether to invest in Bitcoin or not. Many people were pushing their agenda, arguing why X or Y cryptocurrency should be bought.
Many users learned the hard way that many of the people advising on the forums pushed their investment by making others buy the same tokens. What would happen is one Redditor would ask about investing or reasons for investing on a specific token. Multiple users would respond with analysis for investing in the token. At times these predictions and reasons were valid. However, people who bought tokens on just the advice received from these forums often lost their money.
Principle to follow
Further discussion about the poor advice available led to the awareness that making investment decisions based on others’ advice was not a good option. Many people learn that doing their research holds importance in the crypto universe. The term is old and used for investments and academic terms. However, it has become a principle for crypto investors to follow. It is the equivalent of a mantra now.
It is so prevalent that we also advise both our new and old members to DYOR just to get a feel of the market before deciding what they want to do.
How to DYOR in crypto?
As we mentioned earlier, the main reason for DYOR is that you don’t know how reliable advice is in the crypto universe. Many people are pushing their agenda and doling out poor advice. DYOR allows people to know where they will get good advice or reliable information, making it more effective than praising our platform.
The bottom line remains that no matter what anyone or any site claims, it is your money at stake. If you earn gains or book losses, you’re the only one that will suffer. Trading based on DYOR makes sense as you do all necessary to identify the risks, know the potential for earning and know how to minimize costs.
Time for a step-by-step research guide:
Take a look at these steps of any good crypto investment research. Our MEXC Blog team gathered the most used ones and suitable for beginners:
- Identify potential investments
Make a list of potential investments where you can place your money. This would require you to research crypto tokens and available digital assets. You will have to look up information about projects and preferably from independent sources.
Suppose the information you find is only available on the project site or from affiliate marketing blogs. It is better to avoid the token.
- Create a list of investment goals
For instance, if you’re looking for short-term gains, you will need to look at pricing charts instead of exploring project literature. Short-term gains also involve day trading and have a higher risk.
Amongst the benefits of DYOR is finding out that the medium- and long-term trades would be more suitable for your lower risk appetite. This would involve going through project offerings, ICO documentation, and secondary research on second-and third-party sites.
- Set Baselines for losses
Once you have your list of goals, do you need to finalize how much money you are willing to lose? While losing money is always wrong, there’s always some risk of loss involved when we trade.
Trading based on DYOR lets you make sure you’re not risking your tuition, rent, or grocery money. Setting parameters for losses usually let investors cut down their investment size to a realistic level.
- Technical analysis
If you’re looking for short-term trading, technical analysis will be your go-to method of analyzing the market. Technical analysis involves viewing live cryptocurrency charts to see trends and assess where the market is heading. the main challenge in technical analysis is using tools and charts two interpret where prices are moving
- Fundamental analysis
The compliment to technical analysis is fundamental analysis. Fundamental analysis is the more theoretical way of assessing the markets. It involves secondary research about the research you are about to make.
- Resources for DYOR
Knowing where to get reliable and agenda-free information is helpful. The following links offer reliable information.
Time for a start!
Now you are packed with new knowledge about what is DYOR in crypto. Interested in other basic terminology of blockchain? You can check articles in top beginner stories. New to blockchain and trading? If you want to know more about MEXC products and crypto trading, visit our Academy to learn how to start trading on MEXC.
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