How to Become Successful In Cryptocurrency Trading

Success is one thing in life we all are hoping and working towards. Regardless of your age, location and career goals. The main aim in life is to live a happy life and be successful.

However, happiness should not be confused with success because you could be in your family home eating three meals everyday and watching TV. That doesn’t make you successful but happiness is just a by-product of healthy living.

Success is defined as the accomplishment of a set goal which fully takes place when goals are being translated into reality.

Also, it is described as the attainment of honour, power, wealth, money and more. For one to be successful, several things must have been done and put in place to achieve a certain result.

Intro to Cryptocurrency Trading

Cryptocurrency is defined as a decentralized virtual or digital currency that runs on blockchain and operates based on cryptography to secure transactions. This means that advanced coding is needed for storing and transmitting cryptocurrency data between wallets and public ledgers.

Examples of cryptocurrencies include :

1. Bitcoin (BTC)

2. Ethereum (ETH)

3. Binance USD (BUSD)

4. Cardano (ADA)

5. Dogecoin (DOGE), etc.

Trading on the other hand is known to be the transfer of goods and services from one person or entity to another or buying and selling of financial instruments in order to make profit.

Cryptocurrency Trading

This is the act of speculating on cryptocurrency price movements through a CFD (contract for difference) account or buying and selling of coins at lower levels through an exchange.

As a cryptocurrency trader, one can make profits from short term changes in the market prices of cryptocurrencies. The goal is to short (sell) when prices are higher and long (buy) when prices come down.

Several people have made fortunes doing this.

Becoming A Successful Crypto Trader

Always Have Trading Strategy

This is a fixed plan that is set to achieve a profitable return. Strategies are needed in every business in other to know the set of things to be done to achieve a certain goal.

Source

Some of the strategies in trading cryptocurrency includes :

  • Trading along with the trend (the trend is always your friend)
  • Position trading, this includes buying an investment for a long term purpose in expectation that it appreciates in value.
  • Arbitrage trading, this is the process of buying a digital asset on one exchange and selling it simultaneously on another exchange where the price is higher. It involves little or no risk and you don’t have to be a professional to do it.
  • Day trading, it requires buying and selling of a financial instrument within the same day. In this type of trading, you are your own boss and you can make more from it.
  • Scalping, when you specialize in taking profit from small changes in price and making a fast profit from reselling. In this, a strict exit strategy is required to avoid losing the small profits the trader worked to gather
  • Swing trading, etc.

There are still more strategies used in trading cryptocurrency and if properly applied, will contribute greatly to the smooth and successful running of trades.

Portfolio Diversification

Do not invest the whole of your money on a single asset! Investing in a single asset is good until the stock’s performance goes bad.

It’s advisable to divide your money and trade different assets in order to minimize the overall risk on your portfolio.

Risk Management

This is the ability to control and predict possible losses in unsuccessful trades. It is always said that “do not risk more than you can afford to lose”. In managing risks, below are some helpful tips to remember.

  1. Use stop loss and take profit orders
  2. Stick to your trading plans
  3. Avoid margin calls
  4. Have an exit strategy

Avoid Greed

Greed is an excessive desire for more than is needed or deserved.

This has crippled a lot of traders for many years and more traders are yet to overcome it. Over leveraging, over-trading and chasing the market are part of greediness and should be totally eradicated in order to become a successful trader.

Final Thought

Cryptocurrency trading has turned more people multi-millionaires and at the same time rekt more individuals and organisations. If you happen to come across this article, I’m sure the little tips will be helpful for you in becoming a successful cryptocurrency trader.

Stick to the aforementioned tips and watch how things work out more than the previous days.

About the Author

Obadina Rasheed is blockchain content writer and an enthusiast who loves contributing to the development of crypto communities.

Connect with me on:

Twitter: https://mobile.twitter.com/ObadinaRasheed

Telegram: https://t.me/Obadinarasheed06

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