The Main Rules of Crypto Trading
Many people assume that cryptocurrency earnings have a lot to do with luck. However, it is not exactly this way. Any type of investment requires deep knowledge of the subject.
Speaking about trading, we all know that professional traders are defined by how they approach their trading mentally and how they manage their trading actions every day.
In this article, we will share with you the main rules of crypto trading, but remember that you make investments at your own risk only!
1. Don’t invest money that you can’t afford to lose.
Imagine that converting your funds into cryptocurrency, you are going to lose them forever. Define the sum of money that does not exceed your ‘painful’ limit. It is essential to evaluate your current financial picture before investing. Crypto trading is venturous, expect for the better, but be ready for the worse!
2. Bitcoin is the best marker.
In the US equity market, everything correlates to the US dollar. In the crypto world the leading place belongs to Bitcoin. All the crypto family has a close connection to the first coin. It is important to analyze Bitcoin firstly. Then pay attention to altcoins. Bitcoin is the highest priority and then the rest follows it in the market.
3. Choose various coins for crypto trading.
From the very beginning, newbies usually try their luck by investing into one coin. Certainly, the possible earning depends on the sum of money invested. Anyway, crypto experts advise to diversify your coins. This way you can use the benefits of growth of multiple coins. It is difficult to believe, but looking back into the crypto history some coins have shown a much bigger increase of their prices than Bitcoin.
4. Greed can never be satisfied.
If you see your coin rising, you must be ready to take your profit. There is no doubt that optimistic movements rise hope for even better numbers and overwhelm your expectations. However, having 30%-40% of profit is already a good deal. It might happen that waiting for too long you might back at the bottom of the ladder. There is no time for greed, but constructive decisions.
5. Mind different categories of coins.
Getting deeper into the crypto world you will be aware of various crypto coins. Crypto trading can be long-term and short-term. If you invest into a reliable category of coins, be patient to invest for a medium or long-term periods. What’s more, at the times of panic selling, be sure that your package needs a long hold.
6. Mitigate your losses by setting stop losses.
In case you obtain short-term holds, it is advised to set stop losses. You decide in a marker of acceptable loss. In some cases, stop losses may lead to profitability. This happens because of self-activating selling for fiat. Subsequently you are able to use it in order to make one more enter with reduced prices.
7. Check information on reliable resources.
We have been taught since childhood to trust but check. Speaking about trading, it is necessary to remember that trust is good, but control is much better. Taking into account the crypto world, you will discover so many traps and scammers that it could hardly exist on another market. All the crypto coins must be checked by you and proved by safe resources. Do your own research, as it is only your full responsibility for your funds.
8. Err is human, keep on learning!
In any area of our lives we start as amateurs. Trading experience requires losses, just to make you better, to make you a professional one day. If you have made up your mind to become a crypto trader, if you believe in crypto, don’t get discouraged by your losses. Keep on learning!