A trading plan is a set of rules that helps you enter and exit a trade and essential for risk management. If you are a new trader, entering a volatile market without a trading plan does not sound like such a great idea…. you’re most likely going to lose money. You can’t let emotions control your actions in these markets or you will get wrecked, so follow a plan strictly and if you can’t than you probably shouldn’t be trading.
- Do not invest money you can not afford to lose
- Always use your trading plan when getting into a trade
- Always FOLLOW your trading plan even when you are in doubt
- Always use a stop loss
- Do not spend all your time watching the graph after you have made an entry. Plays out too many different scenarios and you may want to change your original entry.
- Tracking every trade is important. Keep track of progress, it is important to know if you are profitable or negative
- Having entry rules (Why entering the coin?) If you don’t have a legitimate reason than you probably shouldn’t be buying it. Good entry spot on TA or did you see it on a Facebook group post?
- Having an exit plan. Being a stop loss at a comfortable rate 1-10% or selling at a determined profit.
Long Term Trader:
• Do not trade money you can not afford to lose
• Use 5-10% of your trading balance
• Look at the bigger time frame, is It up trending? Where do you see the coin in 1-2 years?
• Recommend storing coins in a wallet rather than exchange for security reasons
• Sell 50-75% of your stack at 100% gains and ride out the rest
• Have a target(s) in mind and take profit/sell once it is reached
• Do not let news affect your trade
• Do not sell at a loss, if you are investing into a long-term coin most likely it offers a good solution or technology so if you are in a loss, price will rebound. In these markets its literally in your hands, wait it out!
Short Term Trader:
• Do not trade money you can not afford to lose
• Use 2-4% of your trading balance
• Even though you are trading short term, still important to look at the overall picture. Have a feeling to where the coin is headed
• Trade high volume coins, bigger price swings
• Buy on support, look for bounces, don’t just buy any coin.
• Use resources to help you trade and track such as tradingview, blockfolio, ect
• Always use a stop loss! 3-7%
• Keep minimal positions open, its hard to track over 6-10+ open short trades. Focus on a few and execute them perfectly.
Portfolio Setup:
Here is an example of my portfolio. You can structure it how ever you want but I recommend you do not put all your eggs in one basket. I hold 80% of my portfolio and I actively trade 20% of the remainder. With the profits I than balance out the portfolio, so I will add more ETH, BTC and add more to my trading power. You should never be ALL IN on a trade. They can work sometimes but you can get burned bad. Every trader is different, use this as a template.
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