Before starting crypto trading, some knowledge of the markets is required. Even better, trading is also and above all an emotional affair. You will have to learn to control your emotions if you want to trade correctly.
The extreme volatility of cryptocurrencies makes crypto trading give you cold sweats if you don’t know what you are doing.
Here are 5 tips to follow if you want to make more profits than losses.
Start trading with “small” capital
We will never say it and repeat it enough. Only invest what you can afford to lose. Especially if you are just starting out and not fully confident in your trading skills. You learn best by losing. And, if you start, you have to know it and digest it.
So, it takes precedence to lose small amounts rather than large ones? On that, we agree (normally).
The other advantage of trading with small amounts that we start is not to be traumatized by the losses. How many people had to give up their apprenticeship because they no longer had enough capital?
Start with small sums, you will learn more easily.
Certainly, it will be more frustrating because in general, when you start, you want to win quickly and quickly. However, wisdom has shown us that it is this type of behavior that leads to loss…
Learn from your mistakes (and your victories)
This advice is often given to the beginner to keep a trading journal. This may seem boring and unnecessary at first glance. However, this is the only way to track your progress. This is also how you can understand your mistakes. Finally, in trading as in many other disciplines, learning comes from correcting mistakes.
Don’t be afraid to make a mistake. Know how to learn from your mistakes. Analyze why you opened such a position and why this one made you lose money.
Also do it for trades that made you win. Indeed, if you don’t know why your trade is winning, it’s just luck.
However, a trader who generates profits is a person who knows what he is doing.
Be in control of your emotions
Professional traders do not escape their emotions. However, they manage, over time, to master them more.
For the crypto market, it is particularly sensitive to moods and noises. Typically, what is called FOMO (Fear of Missing Out) can lead you to trade at a loss. You will rush to buy a crypto while it is in its ATH. This is the kind of error that FOMO causes.
It’s not just FOMO that can lead to bad trades. FUD, which is the opposite sentiment, can lead to equally deplorable results. Don’t listen to the noises, try to rationalize your emotions as much as possible.
Don’t trade on “intuition” or because you “feel” it. Trading is not that.
Do not use too many indicators during your analysis
Technical indicators are valuable tools for the crypto trader. There are hundreds of them with relative relevance.
The mistake that beginner traders often make is to want to follow all the indicators at once.
Moving Averages, Bollinger Bands, Fibonacci Retracement Levels, etc.
Sometimes, you should only consider the indicators that you really know. Other times, you have to use several indicators to validate your analysis.
Do not confuse all the tools. Instead, learn to master a few rather than all of them at once.
Professional and experienced traders know that it is better to know how to read and interpret the market than to stubbornly link several indicators.
There is no single winning strategy in trading. It’s up to you to find yours.
Stay realistic and regular on your profits
This is definitely the hardest piece of advice to follow. An experienced trader may also find it difficult to know how to take profits in time.
The beginner trader tends to want to reach the high of the price before selling. This is a very difficult ideal to achieve. Very often, we miss the opportunity and persist in reaching a bullish return. Very bad strategy.
Sometimes it is also wise to know how to accept small losses to hope for better profit later.
It is better to collect small profits constantly and on a regular basis than to register big profits with big losses.
It should be remembered that the best traders are not those who earn the most (in one shot) but those who survive the longest.