Being the new kid on the block is always hard, but when you’re in crypto, you can feel like the popular players already rule the market. By some accounts, they control 40% of the market. And they’re always making a profit while you struggle to get on top, right? Not necessarily.
But the crypto market is a small one, with many big players, much volatility, and a steep learning curve to figure out how to handle yourself and grow your own portfolio in an ecosystem known more for its bloodthirsty sharks than its nurturing educators.
The solution? Educate yourself.
1. Day Trading Cryptocurrency is Still High Risk
Try Crypto Cartel on Discord, Facebook’s Crypto Coin Trader for more neutral and education-based resources (as well as AiBB’s blog). They can be intimidating if you don’t know a. lot about trading, but stay long, listen, take notes, and ask questions. Be a part of communities and it will soon become apparent which are legitimate and which are full of hopeful Lamborghini owners who are more attracted to the potential for riches than to the practice of day trading cryptocurrency.
Learning sites and lots of listening is still the best way to figure out the market and the specificities of crypto. Some important points to consider are the market’s volatility. Setting stop-loss orders farther from actual targets can help with market volatility, and will prevent orders being filled quickly in a still-favorable trade position.
Other related issues with a learning curve are exchange liquidity: in crypto, you can’t always enjoy immediate second-to-second trade exists. Can you always buy and sell the currencies you want on the exchange you like? Trading on AiBB’s platform allows working across exchanges with a single log-in, but if an exchange is disallowing sell orders, traders may still need a strategy to cope with feeling locked into a currency when they prefer to sell.
The cryptocurrency market also differs from other day trading markets because it does not close. Low-volume trade days and times can mean paying too much for buy orders, but when would you prefer trading on weekends and holidays? If you don’t know, you can’t put together your best day trading strategy.
2. Embrace Algorithmic Trading
Because humans aren’t processing machines and because using these tools in FIAT and stocks has been so successful, consider using computing power to make and check your own predictions.
AiBB is one such tool that goes beyond the algorithm and uses Ai to actually learn more about patterns and trades before advising you on your next one. It can track all your trades on all your exchanges, all deposits and withdrawals, and analyse your performance history in order to enhance future trades. Most platforms with algorithm trading don’t learn and adjust — they stick with one formulaic math sequence that works well. That’s why a platform like AiBB is such a worthwhile tool for traders (its Ai advisor is also free).
3. Pay Attention to Secondary Trade Chains — But Not Too Much Attention
A secondary trade chain is a phenomenon where paid trade groups initiate or serve as a trade signal and begin buying up cryptocurrency as they deem worthy. Then others, who aren’t part of the signal group, but who find it authoritative, copy those within. They gain access to what they perceive to be an elite group, without the costs, and just a fraction behind the curve.
The story is that those big, paid groups, which have increased users with a decent marketing budget, have in turn attained the ability to create ripples in the market that act as signals to outsiders that a coin is moving, and that they should look to “get in on it” too. Because market caps on lots of coins are still low, these groups have the power to make or break new coins.
If you can’t afford to join them tools have emerged (including AiBB’s trade follow function) that allow everyday traders to follow one particular superstar. Watch their trades, move when they move, and set your strategy from their wisdom.
It sounds good, and allows newcomers access to the signals in the big, paid groups they wouldn’t otherwise access or pay for. However, volatile coins are still volatile. Moving a coin is not as easy as the pumps and dump schemers would like to believe, and chasing whales has left many, many traders open to risk they do not understand far too late with little to show for it.
The verdict: watch and be aware of these chains, but day trading cryptocurrency is not a game of follow-the-leader.
When the first buyers are also the first sellers, followers will be left behind.
4. Throw Around the Lingo
It’s not just for vocabulary’s sake. If you don’t know what a leveraging strategy *is*, how will you see one? Meme triangles? ABC corrective patterns? Slippage?
Heck, you may not even have an idea of whether day trading cryptocurrency is for you when you could be “swing trading” or “collecting.”
This Forex trading sitehas great educational resources that help newcomers understand the market in ways that can be applied to day trading cryptocurrency. Technical analysis of trends in the market is often integral to day trading, so take a dip into educational, not just forum, sites and learn before you implement.
Trade platforms also have practice trades where algorithms and strategies can be tested before jumping in with real money. Practice. Once you’ve spent some time sussing out the basics of technical analysis, look at crypto charts and see if you can spot the patterns you’ve learned. Did those predictions pan out? If you invested, when would you get out? When will the trend likely continue?
5. Tune Out the Hype
Cryptocurrency seems to be seeping into the mainstream. That’s exciting, but it also means there are lots of sensationalist news stories, over-wrought predictions about impending crashes, and inaccurate news.
Traders often have the most success with their own strategies, because so much of the nascent community is uneducated or is counting on making the market move using support groups in order to sell their own assets once the price goes up.
In the end, traders must rely on themselves.
All those landmines really bothered us, what we wanted to do with AiBB was give traders a neutral (and very smart) analytic advisor as their new best friend, who would help them with their own strategy, but with the best pattern recognition and learning behind them.
This way, a new trader can become a master of their own signals — the patterns they are good at spotting and the orders they want to call. It keeps fear-of-missing-out away from buy and sell orders (as much as possible) and keeps an eye on market trends while traders sleep so they don’t miss important changes.
