Hello Steemians,
Today I want to share 5 cryptocurrency lessons, to be kept in mind whenever trading in any cryptocurrency. I have been analysing stock market earlier and I am pretty familiar with charts and fundamental analysis, but sometimes I have had experiences that were astonishing.
I started crypto-currency last year and since then I have learnt a lot of things while trading, investing and holding onto the different crypto coins. Whenever I used to tell people that buy low and sell high the most common question I get back is, how to plan?
Now the actual reason behind this dilemma is the red market or I should say lows never attract people, it is when the market shows a good amount of increase with or without resistance but bull markets attract trader to put in money and that is where you lose all of it.
So, I just wanna start by talking about some of which are just most important lessons that you have to keep in mind while trading into crypto-currency:-
Rule No. 1. Plan your investments/trade before you put money into it.
Before you buy Bitcoin or any altcoin, you have to plan what you are going to do. There are people who think that saying Buy Low Sell High is easy but the thing is when markets are low it doesn't grab much attention. What stuns the eye is a bull market.
Just to give you an idea though Dan Bilzerian quote that he has bought Shit loads of Bitcoins at the level of $2800
Even Mark Cuban tweeted that he has also put some of his investment and now he has really got into data and everything about cryptocurrency.
So, the point that I want to make is how you decide highs and lows which are simple Buy on each dip.
Just a couple day before there was a blood bath on the market and people took their money out. However, that was the time to put some amount of money just to earn a quick return.
On Thursday
Today i.e. Saturday 17 June, 2017
Now, just in 2 days, the recovery has been seen.
But it is always experienced that Bull Markets or uptrend is more likeable to attract investments, which is why many time bull markets tend to go to levels that most people anticipate. So, before just randomly putting money into any cryptocurrency you need to do a little bit of homework.
Look for
- Market history
- Entry and Exit Points
- Target Reward Areas
If the conditions as per your research are favourable Trade-On, but if not Stay Away
Rule No. 2. Do not Over-Trade
Basically, this means that don't get yourself indulged this much into the market that whatever amount you earn is going to the commissions or exchange fees.
My basic target of buying a crypto is basically, 10 to 15% though it also depends on when my target is achieved what does the charts say. If the chart shows uptrend I may hold on to it, If there is much anticipation but levels are higher without the resistances, I will get out of it.
There are a number of examples like Stratis, LTC, Sia, Steem and Bitcoin itself. Every script has given over 30% in the recent months. Also, some of them have been giving over 500% to a 1000% percent but that is not possible every time. It is true some penny alt-coins still have the potential to give high returns but as I follow charts so I am still waiting for the right entry point.
Rule No. 3. Don't Pick Tops
Every time there is an uptrend in the market, never try to book profit or short on tops. I would say that there is no harm to book profit in a crypto at predefined levels. If your sold price matches the top price you're THUG but don't expect this to happen every time. Smart is great but, if You are making a short position in a script even in the Up-Trend you will be run over a lot of times.
Rule No. 4. Trade with NO- Regrets
Well again just like we can't pick tops in the markets, you never know when is the market gonna roll over or if you're short when it is gonna bounce, Right?
So what are you gonna do?
Suppose, If You're buying BTC or ETH or any other coin or token you have to manage your trade in such a ways that even if the market crashes against your buying or it goes up and giving you crazy returns (even if you sold early) you are not gonna regret.
Example:-
I bought Stratis at $0.70 (70 cents) and with a gain of about a couple of dollars, I sold off my significant amount of holdings earning a predefined profit percentage, just to ensure I don't regret even if the market crashes ahead. Though I do hold some of them!!
So, again you have to manage your trade so that you don't have any regrets.
Rule No. 5 Don't chase HYPE, ANTICIPATE it
Trading is like chess, you always want to forecast and anticipate all the future moves your opponents can throw at you, and here your opponent is the market. So again you should anticipate hype. Now, some of you might have entered the market just now at all time market highs and most of you would have questions, What to buy? and What not to? or maybe When to buy?
Well here is the answer yes you can buy now as well (only after doing your own research and homework), But you would have to give yourself enough room so that if there is a market crash or a little bit of correction in the market you can buy at lower levels.
Now, always having a little bit more to buy at lower levels is proved to be good in two ways:-
- You can average it out once the market bounces back.
- Even if the market doesn't bounce back to the initial buying levels, you at least have an amount for trading and make some profit targeting 5 % margins to cover up some loss.
So, next time try and keep these five things in mind while trading!!
Happy Trading!!
