If you are a beginner in the world of crypto currency then there are some common rules that you need to keep in mind always in order to avoid losing your hard earned money in the volatile market.
We all are aware of the risks involved in crypto trading and seeking for measures that help protect against those risks is always advised. Thus, here are some rules which a new investor should always keep in mind while trading.
Table of Contents
1. Try To Keep A Low Profile When Trading For The First Few Weeks
The most common mistake made by fresh traders is that they try to behave like professionals and put large sums of money into trading cryptocurrency and that too, all in one go.
Freshers are unaware of the fact that cryptocurrency is highly unstable. For a safe play they should use a step-up method in which instead of putting thousands in bitcoin at once, try to start your trading with $100 and then if the graph moves toward the sky then invest another amount in the same coin again. This will help you to gain more and loose less.
2. Learn When To Buy and When To Sell
If coins in your portfolio are at their peak then try to sell some of them or all. Because of the unstable nature of cryptocurrency, if you are having profit today then tables might turn tomorrow. It’s better to make hay while the sun shines. So try to payout some of the profit routinely.
Don’t let your greed dominate you while in the crypto currency as it can take you down. Additionally, do not sell all of them too quickly. The coin might touch the sky the very next moment as you sell it.
3. In The Beginning Try To Trade With Small Amounts
Always buy crypto like you buy all the other stuff for your house. That is buying crypto-only that much which you can afford, even if you lose that last . First focus on small profits or gains.
There are hundreds of thousands of investors who made millions of dollars just by trading bitcoin, on the other hand, there are others who ran bankrupt because they lost all their money.
4. Try Not To Buy On Margin
When you go on margin, you borrow money from the brokerage to increase the amount you can buy. It can be both a boon or bane. The only thing you can do to make it a boon for you is to trade only if you have full-fledged knowledge about the past, carpet capital, and other essential information regarding that coin.
Professional or sagacious traders always manage to balance the loss and profit. It is totally out of the blue to buy something (crypto) which is volatile.
5. Keep Mental Stop-Losses
Always stopping losses is a very prudent decision, but we all are aware of the fact that cryptocurrency rolls up and down so rapidly that it becomes too tough to stop losses. What we can do is use the best weapon that is mental power to avoid loss.
An effective and efficient method is to use ‘time stop’. It teaches us that we have to square off on a certain day, Friday, for example. This is a beneficial manner of compelling you to pin in masters and cut losers.
6. Learn How To Face A Losing Positions
There is a famous saying in trading “don’t let small losers turn into big ones”. That is, if you are facing a loss in the trade, the best you can do is to sell it all. But it is not always good to sell everything, try to keep some portion even if it is a loss for you.
Because we all know that at the beginning of BTC it was only a few cents and with time it reached $20,000. Some traders sold it at the very moment. and some kept it and the BTC surge was jaw-dropping to all when it skyrocketed to $60,000.
7. Trading Plan Is A Must
A trading plan is the very first step for a profitable trade, particularly for cryptos. Always make a strategy and plan that will assist you to know when to buy or sell cryptocurrencies.
8. Use Of Technical Analysis
Entry and exit on a position are based on the technical analysis you made before or while you were trading. The technical analysis helps you with information about when to be a bull and when to be a bear.
9. Let Money Work For You
For new traders who join the crypto market, it is highly recommended that they don’t get pumped up by looking at the profits of others. Putting everything you got into crypto could become lifelong regret (if you lose all of it). Hence for a safer play, try to purchase crypto and circulate your profit in various types of non-crypto investments such as real estate and many others. Or try to keep a low profile until you master the skills that are required to become a profitable trader.
10. Try The Fake Practice App
Many stimulated apps are available that assist new traders to practice by providing fake and virtual money and a simulated environment before you trade with real money.
You can simply take help from the books written by professionals after their hard research, to help the newcomers to faceless loss and make more profit by learning the patterns and other techniques they mentioned in those books. You can even make sure of a reliable software that performs the market analyses accurately and increases your chances of becoming a profit earner. One such software is https://the-bitcoin-millionaire.com/pl/.
Having understood and read about the common rules that a beginner investor in the crypto currency market must be aware of, make sure you follow them in order to avoid losses in the volatile market.
Read well, understand well, analyze well and then shoot your chance in the market. This will definitely help you earn more and more through the opportunities that market’s volatility holds.