The trading market never sleeps. Crypto Traders sit on their hands all day in from of computers trying to make sense of market moves. Nevertheless, the percentage of losing traders is mostly higher than successful ones. Subsequently, we see a lot of people cursing the system, market, or their brokers for the failures.
Cryptocurrency is highly volatile. There is a lot of guessing in the market. Newbie traders come with the mindset of making millions. However, getting rich overnight is an exception in the trading world, not the norm. Hence you and I need to follow the norms of trading success because exceptions are very rare.
Here some of the tips for successful crypto trading will be shared.
Please note that these are general guidelines that we believe every trader should follow. If you are looking specifically for trading strategies than you can read our blog on the best trading strategies here.
So, let’s start.
1. Educate yourself on cryptocurrency:
John Oliver eloquently described cryptocurrencies on his show in these words.
Cryptocurrencies are everything you don’t understand about money combined with everything you don’t understand about computers.
Sadly this is true. The mechanism behind cryptocurrencies is hard to digest for a layman. That’s why it is very important for you to understand crypto first. This makes you prepared for what is ahead.
Crypto trading market is in infancy. Furthermore, it is tense and eruptive. A new trader is likely to get overwhelmed if he/she has no idea of the market environment. Therefore search for educational material on crypto, learn as much as you can about the market value of currencies, technical indicators, and jargon of trading.
2. Choose Suitable Platform for Trading:
By suitable we mean that which meets your needs. For instance, you might want to first convert fiat into crypto and then trade. For that matter, you will opt for a trading platform that offers exchange services. Additionally, some websites are just difficult to navigate. This will waste a lot of your time getting used to the interface. Last but not the least important consideration is the security of a platform. When you are putting your hard-earned money for trade on a website make sure it isn’t scamming. Hacks and scams are very common in the crypto market. Henceforth being careful is indispensable.
To summarize three things will describe the suitability of trading platform:
3. Invest that Which You are Willing to Lose:
Trading demands patience. Don’t over-invest or else you will be on the edge of your seat every time market swings. Crypto trading is risky. There are stories of people who went bankrupt due to their greed. So play it safe. Crypto trading is not worth taking loans, selling the house, or putting your children’s future at stake. Invest the amount that will not affect your lifestyle in case of a loss.
Professional traders advise that you should trade only 5% of your assets at a time. Don’t get carried away by greed after a few successes.
4. Trade with purpose:
When you are entering a trade have a clear purpose in your mind. Don’t just go in for making big money. That will follow later on.
The goal of a successful trader is to make the best trades. Money is secondary.
For making the best trades you should analyze moves of successful traders. It is also called social trading. Know that people make the market. Essentially, wealthy traders with deep pockets have more say in it. So make your best guess around swings and develop a strategy whether you are going to buy or sell coins. Make comfortable rational decisions without rushing in a certain direction.
5. Put Stop Loss:
This tip is linked with the earlier one. Stop-loss is a strategy of knowing when to get out of the trade. It helps you cut losses. Moreover, it helps you in not getting carried away by the profits. Stop-loss is usually set at the price at which you bought the coin. For instance, if you purchased litecoin at $100 than put the stop loss at the exact same price. This way you will save your initial investment from turning into a loss.
You can also put stop-loss at profits. Set a minimum number after earning which you will be out of the trade. Subsequently, your greed will not get in the process.
6. Hold On But Not Too Long:
Patience is the best possession of a trader. However, don’t wait for too long in crypto trading especially when it comes to altcoins. Altcoins are not only volatile in terms of price but they also lose value over a long period of time. Therefore you shouldn’t keep them in cold storage for too long.
The coins with high trading volume are an exception to this general rule. As more people trade a coin, liquidity becomes higher. Consequently, you are more likely to find a buyer for the asset. Ethereum (ETH) and Litecoin (LTC) are among altcoins with high trading volume.
7. Diversify Your Investments:
Don’t put your eggs in one basket. Investing in only one coin will close doors for trade in other coins. Resultantly, you will >be left with no options but to pray for that single currency to move in your favor. This will leave you anxious and demotivated if the market gets stuck.
Diversification will increase your odds of success. Pick multiple coinsfor investment. Stay updated about their markets and take advantage of the slightest moves.
8. Emotional Discipline:
If you can learn to create a state of mind that is not affected by the market’s behavior, the struggle will ceaseto exist.
Emotional discipline will help you reach your goals in a seamless way. Impatient people in the crypto traders business either hold on for too long or sell too quickly. Resultantly, they end up chances of profit and peace of mind at the same time. Hence don’t drown in emotions there will be days for you and against you. Make rational decisions on both.
9. Get Help:
There is nothing wrong with getting some help. Crypto trading is hard. It is harder if you are new to the world. So, ask professional traders for help. Some exchanges like Binance have helpful educational materials on their site. You can get knowledge from there. auto trading strategies is also committed to providing news, analysis, and chart data to its clients along with professional advice. You can get in touch for more.
These trading tips are intended to guide you on what to do and what to avoid in the trading business. It is said that traders are their own worst enemy. As humans, we all get little impulsive when facing unpredictability. And with crypto traders, unpredictability is the everyday game. Hence, learn to be patient, get help where needed, don’t over-invest, and protect what you earn.