Hi steemian how are you, I hope you all good. This is my new blog about golden rules of crypto trading.
The world of crypto moves really fast, but the lesson is that big money is in the long term. I’ve seen time and time again crypto currencies that I remember day trading all are now 3–4x at least now.
The hard part about holding (at least for me) is that I get bored very fast. That’s why I recommend keeping a small stack for trading short term. Keep majority of your bag in long term holds which will multiply over time. (Out of sight out of mind). And keep a small stack to invest for fun and speculation and keep yourself busy in the market.
Don’t think in terms of USD. You are trading to gain more BTC. Trade alts to get BTC trade BTC to get USD
BTC is king and always will be. When it rises alts bow to its power.
For that very reason,I keep most of my stack in BTC at all times. Don’t spread yourself too thin in alts.
This is where the first lesson comes into play. BTC is rising alts dumping in BTC value but USD value might stay close. You can get tricked into thinking you’re not losing money but in the long run when BTC is $50k+ you’ll realize you lost a lot.
take any call from any source with a grain of salt. No one can see the future.
I’ve lost a lot of money not being patient with coins. Avoid selling at losses as much as possible.
The only time I accept losses is on coins I’m scalping and don’t believe in.
As traders, there are many choices that we can take when deciding when to buy or sell a certain coin. We can buy literally anytime and we can also sell anytime we want. But we don’t have to buy something high to sell it low, this will make you lose money. What we want is to buy low so that we can sell high. This makes you money.
Yes, but what about the wait?
The hold and wait is the part that reduces or eliminates the risks.
Have rules, without rules you only make mistakes:
Never bet on one horse, Always have an exit strategy, Limit your position size, diversification is your only free lunch, Bet on the unexptected, Be patient and disciplined, Trade the trend on the right timeframe.
So lets discuss in detail all the Golden rules –
1. Never invest what you cannot afford to loose:
Only invest that much amount of money which you are willing to loose, as once you bought any cryptocurrency, consider that it is lost forever, why i am saying that it is lost forever?
because losses don’t simply comes from market dips or our poor trading ability, there are some other factors also from which losses occur like Government Regulations, hacks and some bugs in cryptocurrencies, so always risk that amount which you can afford, never take loans from bank for trading in cryptocurrencies, we have to first see our financial condition and accordingly we have to invest in cryptocurrencies, personal suggestion invest only 1–5 percent of your total wealth, or you can calculate according to your financial situation.
2. Give Time to the market:
Invest your time in the market, analyse the market how market is moving , what is the momentum, don’t time the market rather give time in the market, remember historical events, if you give good time in the market then you will learn from the past and will never repeat those mistakes, the more you give time the more you learn about market movements, many people i met they just want to time the market and they think crypto is quick rich scheme but its not so, if we dont have proper knowledge then at some point we will loose that money at any instance.
3. There is no such best time in market:
Many of us wondered if we were an early trader or investor we could have made so much money, its not like that as the best time in the market was yesterday and the second best time is today, so don’t regret about why we haven’t came early, just focus on market momentum and market will give you good gains.
4. Expect Dips/Don’t buy in FOMO:
There is lots of manipulation in cryptocurrency market, many factors are responsible to move the market in upward as well as downward directions like media hype , Cme and Cboe announcements for bitcoins, after their announcements bitcoin rose from 10k dollars to 20k dollars and then fell down to near 10k dollars in january , now currently near 11.5k dollars, so fomo means fear of missing out, we should never buy in fomo at all time high and then selling at all time low, so expect dips to come, have patience, dont catch the running train, wait for the train to stop at next stop and catch it.
Remember when others are excited be fearful and when others are fearful be excited.
5. Never buy what you can’t understand:
It’s a very important factor that always buy what you understand, as before investing or trading in cryptocurrencies , we have to understand about the project, about its technology, about its usecase in future, how good is their team, how they talk with the community members, so we have to understand these things before going in any investments and for day traders we have to understand the chart, its orderbook, whale manipulation so that we can easily do a successful trade.
6. Always pay attention to bitcoin prices:
This is very important factor if we want to increase our bitcoins through altcoins, we have to see bitcoin prices, check bitcoin prices while doing trading from Exchange, as when bitcoin prices go in upward direction then altcoins see a dump because people sell altcoins and ride on bitcoin, similarly when bitcoin prices go down then also altcoins see a dump because people again sell altcoins and convert their money in fiat, we notice rise in altcoins when bitcoin shows organic growth or remain stagnant in price.
7. Diversify the Investments:
Never put all your eggs in one basket, always diversify your investments, if we put all our investments in one coin then potential for maximum gain is more but potential for maximum loss is also more, like one coin gave us 50 percent loss and one coin gave you 100 percent profit, so as a whole we earned 50 percent profits. but what if we have invested in that 50 percent loss coin all the amount, we will be in a bigger loss than so always diversify the investments.
8. Learn from the mistakes:
We all start as a newbie, we can’t be pro at starting stage, so when we are giving time in the market, then we should analyse daily why my trade is unsuccessful today, what are the measures i have to take next time so that it will be a profitable one, so learn and don’t repeat those mistakes then only we can earn.
9. Dont be greedy:
Don’t be greedy like i want 100x or 1000x, when a coin begins to grow then with the coin our greed also grows, take profits in between, decide some targets put some for long term and rest take out from your decided targets, if we become more greedy then that coin will start to dip, so decide targets and take out profits or we can do one thing take out your investments at certain targets, and enjoy the free ride.
10. Set stop-loss:
Set stop losses on trades as it will prevent us from major losses, set stop loss at certain level where we think that this coin bounces back from above that stop loss level, stop losses are necessary because when bitcoin pumps or dumps drastically altcoins prices also go down drastically so if we have set up some stop loss then we prevent us from major losses.
11. Never break above rules
Thanks for reading guys, do resteem it if you find it worthy enough!
P.S. — No financial advice, always DYOR
Following rules and trading cryptocurrencies with planning can make one a smart trader/investor.
Happy investing!
Cheers!
Thank-you!
@aman1595