Photographer: Anna Tarazevich
Someone has a mathematical mindset and it’s easier for him to work with numbers, someone perceives waves better, someone perceives psychology, and most could not say goodbye to the habit from childhood, when in order to learn something you just had to repeat, the latter have chances small for success.
If you have a total deposit of $100, you will not be able to trade as if the deposit were, say, $10,000, while maintaining some kind of risk management, you will be forced to take more risks. For example, 50% of the deposit is always emergency ration, the remaining 50% is divided into 5 coins, and for each coin we divide the number of entries by 5. On TOP exchanges, 1 order almost always cannot be less than $10 in equivalent. And that is why the largest group of traders takes extreme risks in pursuit of dispersing the deposit and, as a result, loses, there are exceptions. Cause and investigation.
Futures and margin trading is basically a separate issue. Let's put it this way - if you have no experience in trading on the spot market (at least a couple of years), then trading on futures and, in principle, using margin is contraindicated.
I am becoming more and more convinced that it is desirable to follow several market factors, staring at only one chart for days and meditating on fibonacci or triangles will be of little use. More specifically, the fundamental analysis of the instrument, the chart, order books, the history of transactions, the mood of major bloggers, the S&P500 index, the CME futures closing calendar, and so on. With the desire and the presence of intentions, all this can be dealt with.
First Sense Experience
You can read a dozen books, review the same number of trading courses, but how the exchange terminal works can only be understood if you sit in front of the monitor for a few days. For some people, a few days is enough to catch the logic, others will spend more time. If you want to delve into, having decided that you need it, after a while the terminal of any crypto exchange will become your own, they are all the same type and differ slightly. At the same time, understanding how the terminal works does not give a complete understanding of how the market works, but this is the basis that needs to be understood. It is not necessary to weigh ten monitors).
The moment of pumping the coin is difficult to explain in dry text. At this moment, emotions are raging in the market, although at this time you just see a chart and numbers, but adrenaline and emotions go off scale. The same situation with market crashes, you can read a lot about it, but when the deposit makes -30%, -50% and then again and again multiplies by 0.5, the theoretical part does not work, at such moments risk management decides and ... experience. Experience makes a trader less emotional.
A professional trader cannot have emotions, neither positive nor negative, emotions prevent him from adequately assessing the situation. Pull yourself up when you feel an emotional load, it will most often mislead you. If emotions attacked, it is forbidden to make decisions at this time!
If you have no experience at all, open the exchange terminal, select 3-5 altcoins and watch (one by one). Look at the history of the charts, see where the quote is at the moment, what is with the volumes at this time, what is happening in the order book, what the tape of transactions shows. Do not rush to break into the market with all your money, no one rushes you, you will always have time to buy. The hardest part is waiting.
It is not those who open deals more often that earn on the market, but those who know how to wait for the right moment, and also have a plan, a trading strategy.
In 3 months you can make 2 trades and earn more than if you made 5 trades every day for 3 months, that's a fact.
At the first stage, you can conduct virtual transactions with a pen and notebook, or by making marks on the chart. There are tools that allow you to do this, by the way, it is very convenient, I did not immediately start using them. However, you should not flirt with virtual trading, it is not the same as trading on a real deposit, emotions, a sense of risk and real profit with losses temper the mind.
Signalmens/Chanels
To use other people's signals or not is purely your own business. Do not be a crowd, the crowd is used, big business earn money on it.
If you follow other people's signals, then at least conduct your own analysis. Ask questions - why, what is behind the signal, what are the risks, etc. You and only you are responsible for all your transactions. Take full responsibility for yourself, so you will cease to be a zombie.
From personal experience - there are very few people who can give sensible signals, for the most part they are poking a stick into the sky - guessed wrong. In the short term, it's 50/50, a good chance to guess))
A separate topic is pump chats and groups. Bypass them, this is 100% scam, at best you will lose time, at worst - money. In such communities, their creators and those who are in the subject earn money, the rest are extras about which they unload a pre-selected position. This is the rule, every rule has an exception. Most think they will be the exception, don't be the majority.
Cascading errors and distractions
This part of the article is about the most common mistakes that inexperienced traders make:
Too many coins – it is impossible to follow the price and analyze more than 5 instruments at the same time. You will not physically have the opportunity (time) to monitor the price and analyze the coin. Choose 3-5 instruments that are interesting to you (3 is better) to start with the very thing. Conduct a fundamental analysis, it will show whether the coin is worth attention at all. Then technical analysis to at least understand what phase the instrument is in.
Small timeframes - it is interesting for beginners to watch the movement of quotes on small timeframes of 5-15 minutes (the market dynamics are breathtaking). There is a lot of noise here and the true price movement is not clear. In general, it is not clear whether it is expensive at the moment or cheap. If you look only at small timeframes, it is generally impossible to determine the phase of the market where the quote is at the moment. Move the timeframe away, look where the quote was a month ago, 3 months, a year ago, the situation will become a little clearer.
“All participants think the same way as I do, or vice versa - I'm the only one so smart” - also a mistake, because the market is full of players of various calibers. Not everyone thinks the same way and you are not the only one so smart. There are a lot of small fish with small deposits, there are fewer large ones (relatively). In the asset accumulation phase, small fishes sell to large ones, and in the distribution phase, on the contrary, large ones sell the asset to small ones, and this is a cyclical topic.
The lack of a trading strategy - as beginners do - bought, waited a bit, the coin rose in price - sold and earned accordingly. Such a scheme works during a bull rally, then everything is growing, but the rally is very limited in time. What will you do if you bought 1-2-3-5 coins for the entire deposit, immediately in one go and the price of all purchased assets went down, then even lower and more? Wait 1-3 years to break even? Fix losses and leave with the words not mine / I was robbed, someone robbed me, but did not I myself become a victim of my greed? Trade part of the position at lower levels? Or maybe it was worth dividing the purchases for each coin into several parts and not rushing?!
Lack of basic understanding about blockchain and markets – spot-market is the easiest and most affordable way to trade. It buys and sells cryptocurrency/tokens. Futures and arbitrage is a slightly more advanced level, you should not go there without understanding the processes. Master the basics first, over time you will understand how the market works, what manipulations there are, and you will be able to test other methods.
Futures and margin-trade - turn on your own brain and think, you have $100, you take x100 leverage, your bet is $10,000 - do you believe that you will be allowed to work with such a turnover in plus?! If you have never had those $10,000 (a conditional amount of x100 leverage) on your balance, how can you know how to work with them if such an opportunity suddenly appeared?! On futures, you don’t even buy an asset, you buy contracts (air), and if the price goes the wrong way, you lose everything (no longer air), the entire deposit is simply withdrawn from your account. When trading on the spot, it is practically impossible to reset to zero (there are exceptions) at the moment.
Lack of money management - trade only on one "good" exchange and then BAM - "sorry your account is blocked for violating ... rules" or like this - "the exchange was hacked, we could not do anything, unfortunately your funds were stolen" or some hacker got access to your account through your own fault (not understanding digital hygiene). There is no deposit, but this is a consequence of the lack of money management. This would not have happened if the deposit was scattered across 3-5-10 exchanges, and the investment portfolio was generally on a hardware wallet, and preferably several.
Practice without theory is fatal, and theory without practice is useless. Practice and try to use other people's mistakes in practice while studying the theoretical part, this will save your resources.