If trading stocks is like juggling balls, then trading crypt currencies is like juggling scorpions. Trading crypto currencies may be something s new, but the game nor the rules have not changed. Learn the game or get schooled all the time.Even as an experienced trader you will lose money, what more do you expect as a new trader that is driven to trading crypto's by the hype that surrounds the rise of Bitcoins.
There is one thing that you have to understand when it comes to financial markets. You can never be to late to enter the game, play and win, if you take the time to understand the basics. The basics are the foundation and the extent to which you have them covered is the extent to which you will be able to personalize your trading strategy. Do not ever think that one type of trading strategy will work all of the time. and even it it does, how many more opportunities are you missing out because you lack the ability to interpret the market as it presents itself because one should never forget , that the market is never the same. Just because there prices closed above the moving average and there was an high volatility, it wont always mean that there is a spike. And in the same breath, just because there was an irrational spike confirmed by an irrational volume, it doesn't mean that you can expect and big reversal. This is cypto that we are speaking here and the unexpected can always be expected.
Here are some simple tips that you should be aware of in order to be a career trader:
1.Remove expectation when you trade:
Many new traders are most often driven by the excitement of new possibilities, the dream of buying a new car, a house , taking their family on vacation or even paying of their debt. Remember that when you are trading, the market doesn't care what you expect from the trade. All it wants is one of two things..your respect or your money.
Trading is 80% psychological and your ability to be emotionally neutral gives you a clear mind and the ability to make good decisions on a consistent basis. One must note that emotions are drivers of action. When you win big followed by a bigger lose , what happens?
You start to see your dream crashing in from of your very eyes, and what does the emotional and irrational brain do? Take a bigger trade, and then BOOM. You lose again.That's 50% of your portfolio down the drain in minutes. That is not an uncommon story at all and you are not alone. So remember this lesson clearly, that remove your emotions from trading.
2.Money is made by seeing trading as a career, not a get rich quick scheme:
Perspective is everything in life. It not only determines what you do, but how you do it. Actions are truth and in trading, your actions determine your perspective. If you trade without knowledge and you enter a exit positions without knowing the "why?" , then you're probably a temporary trader. You came here to take chances and to pay people like me who are master technicians. If you are in in for the long run, you have the ability to be cool calm and collected. Career traders know that this is a marathon , not a sprint and that it is better to be profitable by a dollar than lose. Understand that each day of trading a a newbie is a lesson to make you better for the next day. The aim is to survive. You have to learn how to swim before you can even think about being an Olympian.
3.Money Management:
What is money management? Money management is the art and skill of knowing when and how to enter and leave positions. Some situations in the market require you to take your profits in small stwps, and in other situations, to take all of it. You have to be able to manage your wins and loses, risk and return. I will go into more detail in the next post as this is just to give you some background.
4.Start with a demo account:
![yoga pants.jpg]
()
I cannot over emphasis the importance of trading with a demo account. A demo account allows you to get familiar with the charts . It allows you to get to know yourself as a trader when you are sitting in front of the screen. Are you impatient fro trades? Can you see opportunities as they come? Are you able to cut losses and maximize gains strategically? Are you comfortable using the platform i.e do you know where everything is and how to use it?
There are some mistakes that all beginners make, and better to make them with virtual money. Trading with a demo allows you to understand your behavior as a trader and in the future that is going to pay of because it will allows you to develop your own trading style. Yes! No two traders are the same or else we wouldn't have markets. When trading with a demo account, place trades that will resemble your budget. Don't place $100 trades if you only have $100 to start with. The more realistic you trade your demo account, the better prepared you're going to be when you start trading your real account. Stay posted because in the future I will also write about how to use the demo account to to practice and develop a trading strategy.
5.Do an after trade analysis:
At the end of each trading day you should be able to explain why you entered and exited each and every trade. You should be able to revise your loses and also correct your mistakes. You have to do an after trade s.w.o.t analysis. The better you are able to perform this task , the greater your chances of success will be and the closer you are to being a career trader. Remember that you never lose if you never quite, and there are no failure, only lessons.
I hope that this is enough to get you started. Share and up vote this post if you would like to see more.
NB: There is no reason for losing money by making mistakes that have already been made.