Trading cryptocurrency is easy. Making a profit from trading cryptocurrency, however, can be difficult.
Here are 10 useful trading tips for smart traders:
1. Set the Right Expectations
When you first discover trading, you might think one hot pick is all it takes…
But now you know it takes a lot of hard work, effort, and experience. It takes years to become a consistent trader.
Learn the foundations of stock trading first. Think of it like any high-paying risky profession. With the right education, you can work to meet your goals over time.
2. Avoid the Beginner’s Luck Trap
Many rookie technical traders get some early beginner’s luck, then assume they’re the greatest technical traders in the world. Experienced technical traders, meanwhile, are smart enough to never become complacent. Avoid getting too high or too low while trading no matter the outcome.
3. Don’t Quit Your Day Job
New to the market? Don’t ditch your job or trade money you can’t afford to lose.
It’s important to not need to make money from trading when you’re learning to trade. Never use money you need for rent or bills. That’s a sure way to overtrade and blow up your account.
Remember, most traders lose. Only trade with money you’re OK with losing.
4. Plan to win
It’s important to plan your trades. Run your scanner. Check the Finance news websites. Watch a few stocks, but only trade if they meet your setup and plan. Remember: if you fail to plan, your plan will fail!
5. Greed Kills
This tip builds off the tip above. Many capable traders fail to retain their profits simply because of greed. Why sell now when I can sell next month and make twice as much? That sounds good – until markets drop and wipe out all of your profits. Set your targets, stick to them, take your profits, and wait for the next opportunity.
6. Be Smart
Remember, this can be a career. So treat it like one. But remember to find a balance in your life. Don’t let trading consume you.
So have a technical analysis and a trading plan always prepared.
7. Diversifying with Altcoins Isn’t Really Diversifying
Some crypto fanatics will recommend diversifying your portfolio by buying altcoins. Unfortunately, bitcoin is still the king of the crypto markets, and most altcoins simply follow in its wake. In many cases, altcoins move in lockstep with bitcoin. Never lock all your funds into crypto.
8. No Trade is also a Trade
Sometimes, there just isn’t a trade.
We saw the Market go quiet for almost a year before roaring back this summer!
Sometimes strategies stop working for months at a time.
You have to back off. Don’t force trades where there aren’t any.
9. No FOMO
It’s OK to miss a trade. There are always more! Every trader misses trades sometimes.
It’s better to miss a trade than to overtrade. So don’t chase. Let it go and prepare for next time.
10. Embrace Trading Setbacks
In your first few years, you can have successful streaks, then feel like nothing’s going your way.
That’s the time to take a break, review your trades, and study.
It’s easy to get frustrated in the heat of the moment. That’s when you might break your risk management rules – like not taking profits or not cutting losses…
Learn from your mistakes and don’t overtrade to try to recoup losses.