RED or GREEN
As crypto investors, im sure most of you are used to waking up, blurry-eyed, reaching out to your phones and opening you'r portfolios. On some days your margin trades are up 10% overnight, whilst on other days you wake up to email alerts about margin calls and insufficient liquidity. Sometimes you interpret data and trends correctly and admittedly sometimes you just get plain LUCKY.
We've all been through this, been caught on the right side of a "pump" or "dump".
Ultimately, a Green number at the edge of your phones display and your day is off to a good start, a happier breakfast and a satisfying cup of freshly ground coffee.
Conversely, being caught on the wrong side of one of these events signals a day of with doom and gloom.
Its a game of Russian roulette we play with ourselves everyday!
Keeping in mind that most people are part-time traders looking to make some money on the side this approach can have drastic effects on our daily lives and full time jobs.
A Better Approach
Trading in the crypto-currency world is not like trading in traditional currencies or commodities. In the crypto sphere, trading is done primarily through trend analysis unlike fundamentals that dominate the FIAT world of currency trading.
The fluctuations are wild and there is often little fundamental reason for such volatile swings in price. Speculation rules the market place and forums dominate the perceptions of the smaller traders. Don't get me wrong, there's a lot of money to be made trading in cryptos, just usually not for the casual small traders out there looking to make a quick buck.
There is however a better approach to trading crypto-currencies. One that doesn't require this constant panic and checking of prices and then looking for answers in blogs or forums as to what just happened. Its more methodical than that, whilst it does require you to be on your toes to maximize your profits you shouldn't feel like your running around like a headless chicken. These are the things experienced full-time traders do but don't always share.
You'll always have more losers than winners
Cut your losses short and let your profits run
The Chinese word for "crisis" is composed of two Chinese characters "danger" and "opportunity". Keeping a large take profit and a small stop loss limit means even if 7 out of 10 trades go wrong the remaining can still provide for a healthy profit at the end of the day. Experienced traders do this all the time. For example the recent volatility in the Ethereum market brought upon by the DAO hack made large traders massive profits following this strategy, whilst smaller traders mostly failed to capitalize on this and even took to forums to rant about their losses causing even more panic and volatility.
Always have a number in mind before trading
Experienced traders always place limit orders, have a number in mind, decide a predetermined profit and loss level that their happy with and place the order. How often have you thought "it'll come back", "the market will correct itself" and then just ended up being worse off. Patience is a virtue but must be based on pre-determined values and expectations not on hope.
The FOMO problem
This is one of the biggest mistakes new traders make. We all know Buy low and Sell High but how often do we buy after the market has risen. This is human nature, when something is doing well we don't want to miss out on it(Just look at Pokemon Go's staggered launch Worldwide), but this is usually the opposite when it comes to trading in crypto-currencies. We often trade the hype and come up short as the market over reacts.
"even pyramid schemes are a good investment if you know when to get out"
Learn how to interpret graphs and pick up on market sentiment
Like everything learning the basics is important. But i assure you this is really not very hard. The knowledge you require can all be learnt online through the various sites out there that teach you how to read financial graphs and through numerous courses on learning about trend analysis. You don't need to delve too deep to understand the basics and you definitely don't need a degree in mathematics to understand the concepts.
Understanding market sentiments and how a market reacts can only come from close monitoring of the market movements. This is something that takes time and experience. Watching the movements in the market, how it trades when volumes are high, how it behaves when there isn't much activity, finding out about its range in such periods
require patience and careful monitoring. There really isn't much more to it, monitoring the market in a peaceful environment keeping in mind the basics you've learnt will help you understand its dynamics.
A platform is only as good as its people
Listen, read and talk to the people behind the project, get to know them and their way of thinking. With live hangouts, slack and meetups meeting innovators in the crypto world is easy and traders should make full use of that. Join communities and get first hand knowledge from the people behind the projects you plan on investing in. Just like Fortune 500 companies, the team behind a project is crucial to its success. Study their past work and understand what they are trying to accomplish to get a leg up whilst trading.
I have a degree from the University of Warwick, England where i started currency and commodity trading from the time i was 18. Today, i have a diversified portfolio with an even distribution of FIAT currencies, commodities and a basket of cryoto-currencies. i'm also an Ethereum miner and am grateful to have met many of the people behind today's platforms of the future.