If you are new to trading or currently have a negative trading portfolio, here are some tips you should be reading. To start it off, the basis of trading is to devote your full attention and focus.
Check this list:
- Do your own research — There is nothing wrong with following influencers, Twitter traders or Telegram group for signals — only as long as you have done your own research on the token. To make an informed decision, you need to understand what the token is used for, how the price moves, what stage of development is the project at and so on.
- Always have an exit plan — You may have made a good entry trade, but the next course of action is the most important because it determines whether you make a profit or loss. Most beginners do not have an exit plan and when they start to see prices go up, they very often become greedy. In most cases, they end up holding the tokens longer than they should, losing their profits in the process. Always have an exit plan for both profit and loss, minimising your loss and taking your profits.
- Stop looking for another Bitcoin — Last year alone, Bitcoin prices rose from $1,000 to $20,000. Although that is an impressive gain, not every token can or will, follow the same path.
- Never put all your money on a single trade — Another very common mistake beginners make is to put all their money into a single trade. If you find a good entry, buy in at a percentage of your funds (50% — 60%) and wait to see if your entry works. Using this method allows you to dollar average when the token price takes a dip after your trade. Likewise, you can purchase more if it goes into an uptrend. Although it reduces your profit margins, it secures your position and prevents you from losing it all if the trade goes south.
- Keeping up with the latest crypto news — If you want to be a successful trader, it is essential to follow crypto news and be up-to-date on all recent and upcoming developments. Crypto is still in an infant stage where the market is influenced by speculation, responding closely to both positive and negative news. Having relevant and the latest crypto knowledge is extremely valuable as a trader.
We have mentioned some other tips such as the importance of charting fundamentals and breaking out of the emotional barrier in our previous article.
At the end of the day, trading is not meant for everyone. Trade moderately to understand how you react in different situations before getting deeper.