6 Tips To Trade Crypto More Profitably
Crypto 101: How to avoid common mistakes trading crypto
I have been trading cryptocurrency for more than 7 years and I have always been fascinated by the financial markets and their behavior. The earnings I make trading crypto and equities help me manage my lifestyle. When I started trading, it was just a hobby that I obsessively got involved with. Now, I’m in startup life — so this income is invaluable to me.
Avoid common mistakes trading crypto. I learned the hard way, so you don’t have to. :)
I experienced many times how a poor approach to trading could be painful. If your approach is to ‘play’ with your capital just to see what happens, trading anything — you will most likely lose all of your money.
You have a better chance of gambling in a casino.
Trading is a form of art that requires tons of self-discipline. I am an impulsive type-A personality, a career salesman and extrovert eager to see the world and do cool things. Trading taught me to soothe my impulsive emotions in exchange for a more rational and structured approach.
YouTubers claim to have the tools or knowledge to crack the markets and to produce super high returns, but most of them are selling snake oil. Trading well over time is hard. Luck happens, but spoiler alert -
becoming a millionaire with consistent returns of 1,000 % is not real.
Trading calls on our sharpest emotions: fear, shame, embarrassment, greed, pain, excitement, euphoria. All of these influence how you trade. Should you trade, you will understand and experience that. To be a successful trader kill your ego and be comfortable with this simple truth:
You Will Suffer Losses —
how you react in these situations define the trader you are.
The life of a trader is like everything else in life, made by highs and lows. Experienced traders make tons of extremely important decisions in fractions of a second:
- Should I buy more?
- Should I sell?
- Should I take a profit?
- Should I take a loss?
Knowing how to read charts is extremely important to be a successful trader — volume bars and candlesticks tells you a story. This is especially true during a price action movement where bulls and bears are trying to be in control, it is up to you to decide to be part of this ‘fight’ or just analyze the situation and decide after the battle is over.
This makes the difference between an average trader and a good one, but remember that a decision-making process can be molded according to the outcome you want to reach. It is important to be objective and disciplined in your thought process, otherwise, you can easily misinterpret the charts in front of you and find something you are looking for. Having a trading journal and keeping a record of your data is an essential part of a healthy trading routine and gives you a more professional approach a line that I love is: What you don’t measure you cannot improve (Peter Drucker). Having a trading journal will force you to review your trades your entry and exit point, simply put your overall trading strategy.
Successful Traders Have A Low Percentage Of Winning Trades, They Are Disciplined On How To Manage And Cut Losses — They Don’t Win Much But When They Win They Win Big.
George Soros once said,
“Is not important to be right or wrong, what is important is to know how much money you make when you are right and how much you lose when you are wrong”
Based on my experience here are six behaviors that guarantee losses in the market:
- Lack of Discipline: trading is not a game — rather a science for some and for others, a form of art. Study, read books, attend courses, do not listen to the advice of others, put aside your laziness and form education for yourself.
- Lack of Focus: be sharply focused, in order to enter and more importantly, exit a trade. If you think you can trade while doing other “stuff” or even worse on how you will spend your future profit you will end up with no money.
- Impatience and Impulsive Behavior: If you are a type that looks for action and an adrenaline boost — look somewhere else. Trading is not a gambling act. You need to be able to stare at the screen for hours without any “action”. Trading is objective decision making.
- Greed: Greed is part of human nature and is present in all of us , do not try to time your trade it is basically impossible to enter a trade at the bottom and exit at the top, If you think to make a super-fast profit most of the time you will be “blind” and lose your initial capital.
- Being In Love with the Market: This happened to me many times and if you are in this space I am certain you can relate to the same experience. In order to be a successful trader you need to be the most objective and rational as possible, is difficult to detach emotionally from the market in result most of the time either you are not able to cut your losses fast enough or you get out of winners too soon. Don’t be married to your position.
- Avoid Repeating the Same Trading Patterns: Many traders repeat the same action over and over in order to get better trades, as a result, they are constantly trying to draw lines, strategies, and indicators that confirm their theory. These traders are creating their own world and most of the time they completely miss seeing what is really out there.
Nobody can predict the market, nobody can tell you the price of Bitcoin or any other coin tomorrow at this time. Nobody can tell you where the market will be six months from now, it basically impossible to buy and sell at exact highs and lows this is why if you are knowledgeable, discipline and rational you be more likely to succeed in your trader.
bitsian will be here to support you. We will share more insights on how to trade with indicators and personal tips on how to analyze markets for success trading cryptocurrencies.
Good luck!
bitsian is a cryptocurrency aggregator making it easy to trade across your cryptocurrency exchanges. We aim to make your trading experience simple, straightforward and transparent. Sign up at bitsian.io for access.
Originally published at https://medium.com on July 24, 2019.
