How to become a crypto trading guru? Best tips and techniques
More and more traders turn to crypto trading as a faster and more secure alternative to cash in. However, even with being as attractive as it is, the crypto market is not a piece of cake that you can grab just because you like it. Being a successful crypto trader requires even more skills than being a successful trader on a traditional stock market.
Why? The answer is simple – cryptocurrency bears a more innovative and sophisticated technology, and you have to know ‘the rules of the game’ in order to win it. Whether you’re in the market to buy cryptocurrency, sell or exchange Bitcoin, below is our list of ten best tips and techniques for you to consider.
#1. Define your goals
You cannot trade simply when you want to. Trading is not roulette, and entering a crypto trade without a well-defined goal is similar to a suicide. Financial, at least.
Before entering the trade, remind yourself that this is a zero-sum game, which means that whenever someone is winning, someone is also losing, and vice versa. The market specifically is filled with so-called ‘whales,’ which are just waiting for innocent starters to make mistakes. Whales are typically responsible for placing huge blocks for innocent starters to make mistakes. Even if you’re an experienced crypto trader – sometimes the only way to keep your profits is not to trade at all.
#2. Decide on your profit and loss levels
Every successful crypto trade has a clear-defined strategy. What’s your target level for profit? What’s your stop level for loss? Decide on these two numbers before entering the trade. It’s important to remember that while crypto trade allows you to cash in faster, it comes with certain risks, too. For instance, an extreme movement in the traditional stock market is considered to be 2-3% change in value, while in crypto market this number can go up to 80%.
#3. Manage your FOMO (Fear of Missing Out)
Of course, no one wants to be left outside the boat filled with gold. There are endless times when the crypto market has seen an unprecedented rise of a coin value. Everyone’s been talking about it, and it seems just wrong not to get in. However, always keep in mind that it’s also possible the whales are the only ones creating the enormous offering. Meanwhile, they are just waiting for naive beginners to sell them the coins they bought for cheaper prices.
#4. Work on your risks
All profitable traders know: the small gains are the ones making profit. Never set the peak of the market as your goal. To be a successful trader, look for the small profits that will accumulate into a big one. For instance, you should never invest more than small percentage of your portfolio into the so-called ‘non-liquid market’ (very high risk). Those trades should have much greater tolerance, with the stop and target levels chosen far from the general buying level.
#6. Handle altcoins properly
The main tip you should remember about altcoins – they lose their value over time, sometimes very rapidly. Always choose your altcoins wisely. When you’re picking them up for a medium or long-term use, prefer those with a widespread community behind them – more often than not, they continue their development instantly.
The recommended altcoins are Ethereum (ETH), Monero (XMR), Factom (FCT), and DASH. Follow the coin’s chart and identify low and stable periods. When accompanied by a good press release and some public attention, the pump will start and they will sell in profit.
#7. ICO do’s and don’ts
ICO (Initial Coin Offering) is another opportunity in the crypto market. There’s a wide variety of ICOs available, and while some of them provide enormous gains to its investors, others turn out to be a complete scam. How to define one from another? Research.
1) Is the website professionally built?
2) Are the founders proudly presented, or are they hidden behind the nicknames?
3) Check the Bitcointalk thread – is this ICO even real?
4) Is there a large community behind this project? If so, there most likely would be a Slack gathering.
5) How much money has been already raised? The sweet spot here is really a middle ground. If there was too little money invested, the company wouldn’t have enough funds to move forward in order for you to cash in. If there was too much money already put in, there isn’t enough room for other investors to make a profit.
#8. Keep track of fees
If you take part in multiple trade auctions, you will end up paying more fees. It’s always advisable to post the command (maker) and not to buy from the order book (taker). In some exchanges, the difference reaches 0.1% in favor of the market. That’s quite a lot.
#9. No-pressure attitude is the one to win
Don’t start trading unless you have the optimal conditions to win. Make the decision when and how to start a trade, and make the decision on when and how to end it. Pressure will almost certainly result in a loss. Find your perfect moment to get in, or better wait for the next opportunity – you will get it!
#10. Set your goals by placing sell orders
Always set your goals by putting sell orders. A successful strategy for it is to place very low buy orders. Placing buy orders requires special care, so always make sure your buy order is adequate in regards to the market price.
In the end, remember a simple rule: don’t let your ego take over you. You can lose a trade, but you cannot lose your temper. Do not waste your resources, time and money to prove to yourself and others that you should have entered a certain trade. There’s no trader that never loses. See the big picture – make sure your total profits are higher than the total loss.
Lastly, find a reputable and secure cryptocurrency trading platform with an efficient fee structure. Create your account at OpenLedger DEX and start today!