Are you in the game of trading yet? We all want to get that lucky break but crypto-trading can be such a minefield. Ive put together 5 Rules that I now follow when trading. These are to keep me grounded and to stop me making stupid investments that are likely to see me lose money.
Only A Fool Makes The Same Mistake Twice, Or In My Case, Three Times.
Build your TRADE STRATEGY before you trade.
Right, what’s your buy in price?
What are you going to sell at?
How much profit do you want to make?
Is it likely to hit these points today?
Are there any events that will cause this to spike or drop?
Get the answers to these questions beforehand and risk is reduced, this will also take a lot of the emotion out of this trade. You know your plan and the profits you will gain from it, so stick to it. If you have a couple of these set up for different coins in the day, your chances of getting a good buy in or sell order will increase.
Make sure you find a decent range to trade in
This should be realistic and around 7-12% range up and down is ideal, decent profit and makes it worthwhile. Most coins will go between these values in a day. Use the charts to look at past 24hour highs/lows. What does the order book look like? Is it high on buy orders or high on sell orders?
Avoid being a sheep and joining the herds
You will see coins shooting up by 10s or 100s of % and thinking ‘Damn, why wasn’t I part of that’ – unlucky, you weren’t. Get over it and forget about it, in this game a crystal ball would be amazing, but you don’t have one, but what you can do is research for yourself and avoid falling for FOMO (FEAR OF MISSING OUT) and yes, this does bloody exist. The BitcoinCash spike that happened few weeks ago, I put in $600 when it was at $1800 and was staring at my screen when it was $2400 – I was staring at a $200 profit for 10mins work but I thought it was going to keep on climbing, I didn’t want to miss out so I held, held on for a few minutes too late and BOOM! It dropped. To $1200. I also sold that at a loss because I felt I could make that money back quite quickly. A lot of lessons were learnt from evening and that is where my rules have been built from.
NEVER sell at a loss
Whether you trade in Satoshis, Eth or USD, do not ever sell at a loss. This is the only time you lose at this game and, from experience it’s the quickest way to watch your pot of money disappear, you then end up chasing all sorts to try and make it back and that’s a tumble right out of this game!
Spread your investments and Diversify!
Its highly annoying just having all your hard-earned money stashed into one coin, whilst everything else goes UP and DOWN all around whilst yours is sat stagnant. You then start questioning yourself and working out whether you should sell and go somewhere else, well don’t! As soon a you do that, your original coin will sky rocket, its sods law! Invest in 5-10 coins with varying tech backgrounds and have profits grow all around. Keep some for long term if you believe in the technology and use some for trading.
That last one leads quite nicely onto my next post of what coins should I be focusing on, there’s plenty out there to be looking at but researching and following on Social media can be an absolute minefield when all you want to do is concentrate on profits. Shortly, I'll be writing about the Top 20 Cryptocurrencies that I'll be focusing on over the next 3-6 months and reasons why.