Many traders are trading massively in cryptocurrencies like bitcoin and Ethereum, and such traders are trading to win consistently. However, winning in cryptocurrency can happen once they have adequate knowledge about the technicality of trading and risk management. Regarding trading with leverage, the traders have to rethink their plan to trade crypto coins.
As we know that cryptocurrency is highly volatile, we should consider the following cryptocurrency trading tips:
Crypto Trading Tips
Invest Before You Know The Risk
There are always risks associated with crypto trading despite being well-versed with it. Therefore, you must calculate the percentage of risk and how much that can impact the capital negatively.
Also, if the risk is well-calculated and you have agreed positively to bear, such traders may go for this kind of trading.
Put Your Investment In Different Coins
Warren Buffet had once said – “don’t put all your eggs in one basket”, and that’s very true in the cryptocurrency market. Hence, you should invest in different coins and avoid investing in only one coin to avoid high risk.
Every Trade Cannot Guarantee A Profit
As cryptocurrency is more or less similar to other CFDs like forex or commodities, there are chances of loss also, and no one can promise to be profitable in every trade.
Avoid Fear And Greed Factors
Fear and greed are two emotional factors which need to be eliminated in every way possible since these two are responsible for bad trades. However, it is not possible to eliminate these factors.
Trade With A Plan Only
“Failing to plan is planning to fail” is the famous saying applied to the crypto trading market. You should implement a proper, precise plan step by step for getting a good result while trading crypto coins.
Use The Risk Mitigation Tools TP/SL
Every platform has a risk mitigation system where you can lock your risk and profit. If you are only buying crypto coins, you have the option to wait, or you may use them for your purpose, but if you are trading for speculation, then you must have price entry and exit points in the calculation. Following this, it helps you to recover and retain in the trading business.
Follow The Proven Strategies
There are numerous strategies, and every strategy may not give the expected result. Therefore, you must select a few that fit your investment capability and test them in a demo console or simulation. Once the strategy is proven, you may consider implementing it in the live trading account. Know all about the financial services right here at TRUSTPEDIA.IO.
Despite the trading tips mentioned, traders may still commit mistakes, but a trader can reduce them daily. Here are a few common mistakes and their correction measures.
Common Mistakes To Avoid
Unrealistic Profit Expectation
Unrealistic profit expectation is a common problem for novice traders as they speculate huge profits without financial calculation with an adequately tested strategy.
There are always risks in such trading as the market price is not centric to any party because the market forces allocate it. Most traders do not have calculative risk and strategies to control.
Untested Trading Plan
Most of the time, few traders fall trapped with lucrative trading schemes, ultimately leading them to massive losses. Thus, you should be aware of your chosen trading plan before implementing it in the live account.
Some news flashes in the market are not real, and traders get trapped while taking entry or exit from the trade.
A better mentor always generates a better result. However, if our reference or broker is not well equipped for the trading, it may incur losses for you. Therefore, you must refer to valid and genuine links only.
Altcoins VS Bitcoin And Dollar
Major Altcoins have the most volume traded in the USD again. Thus, analyzing graphs of those Altcoins should be done whilst comparing them to their Bitcoin graph and their dollar value graph.
The professionals make sure to do that for weekly market reports. If they solely analyze the Bitcoin value chart, they might surely miss the accumulation period of Ethereum by roughly $300 (recall $300 of Bitcoin accumulation back in 2015?). At the time of writing, Ethereum is trading a month later for more than $1000 for one Ether.
Time Is Money
In terms of events and occurrences, a week in the crypto market is equivalent to three months in the traditional capital stock exchange. One who wants to jump right into the deep water of crypto trading has to follow it not just daily but on an hourly basis. It’s not everyone that can play this game. Nevertheless, you need to consider the amount of time invested in the process. Sometimes it pays off to be a long-term investor rather than a daily trader.
As a daily trader, it does not necessarily mean you are bound to buy, sell, and trade every day. Trades can reach their destination within minutes, as well as within months. Think about the time you are willing to invest in studying and tracking the market. Remember your time has marginal cost, or in other words – your time has a price tag. If you have decided to put your time and effort into trading daily, it is better to start with small doses and examine the performance before increasing invested amounts.
Another benefit of crypto is the possibility of trading on micro-transactions. Unlike the capital market, where if you put an eye on Apple stock, you would need to buy a minimum share equivalent to a couple of thousand bucks, in crypto, you can perform transactions of a few cents.
Cryptocurrency trading needs to be carried out with great care as it may give excellent results, and adversely, it may also bring massive loss. Therefore, you need extensive research and analysis before placing any order in cryptocurrencies. Moreover, such type of trading concerns high security also. Thus, this blog’s thematic content generates trading tips and assists in eluding the general faults.