This guide is not about handing money to others, this is about you taking control when YOU trade.
This guide is not about telling you where to trade, this is about HOW YOU should trade.
Lesson One:
Don't put all your eggs in one basket.
Lesson Two:
Don't place an order hoping one day it will make 10%-100% if you wait long enough.
Now let’s put it into practice. I will talk about an example amount purely for easy maths and demonstration purposes.
So let’s begin, imagine you have $1,000.00. DO NOT put all of that investment into one order hoping it makes 10% a week or 100% a year.
Instead break that $1000 into 10 'baskets' and then just concentrate on one basket ($100) at a time.
The key here is not to buy something and leave it to sell for 10% higher.
Instead put your greed aside and think logically.
Put $100 in and set it at 1% profit, by this i mean most exchanges have buy fee&sell fee that combine to 0.3%-0.5% so you are looking to put the sell at 1.3%-1.5% to get 1% profit.
Now here is the strategy. Many exchanges have many markets so look for the ones with a spread that’s open enough to make that 1% profit quick.
I’m not talking about a market where the spread is only 0.3% but the price swings 5% a week. im talking about a spread of 2% that ping pongs many times a day.
The name of the game is not to make 10% a month, but lots of baskets of 1% many times a day.
The reason to not put the whole $1000 into one order is simple even with a 2% spread you cannot guarantee the sell order will hit within minutes. So even with a nice spread, there are no guarantees and if the price drops that 1% higher order can end up sitting there, leaving you with nothing spare to take any opportunities at lower prices.
So stick with the baskets method
If $100 gets stuck for a bit, you still have $900 to play with at the lower prices. Meaning you could flip another 9x$100 basket 2-10 times before the price moves back up to take that first basket.
Flipping 10x$100 is easier than 1x$1000 for many reasons.
- The lump sum may be seen as a wall (large order to intimidate traders) which can change the mood of speculation
- 10x$100 at 1% profit is the same as 1x$1000, you will still turn it into $1010 either way, but using the basket method results quicker.
- You less reliant on the market moving in your direction because you have funds to move with the markets
- You stress less praying for a 10% rise and relax to not care if it hasn't rose by 1% yet because you are enjoying the volatility at the lower levels using the other baskets.
Once you start getting into this pattern you start to realise that you may be flipping 2 baskets 5x and not touch the other 8 baskets yet still manage to turn the total $1000 into $1010 quickly.
At this point don't get greedy to use 2 baskets of $500 hoping the 5x flips turns $1000 into $1050 in the same time. Again DO NOT let greed take over and make you put all of your eggs in the line. Stick to flipping small amounts quickly and having spare funds available should those orders be left waiting should the price drop.
At this point of sticking to 10 baskets to move with the price, don't get greedy and hope to make 2-10% per flip, because your happy leaving baskets waiting a little longer. Just stick to making lots of 1%'s often not few 2%'s less than often or 10%'s now and again.
i hope my thoughts help you