8 important tips for trading cryptocurrencies
A trader in the cryptocurrency market, whether a novice or a professional, needs to be reminded of the most important advice that must be taken into account to make sure that he is doing the right thing.
Here are 8 important tips for trading cryptocurrencies:
1- Stop Loss:
This may be advice I've read before but it's still advice many traders still struggle with.
You might ask yourself the question "What is the correct stop loss for trading cryptocurrencies?"
The answer:
There are two basic facts to know before setting a stop loss.
- What is the average volatility of the current currency?
- How much money can I afford to lose on any single trade?
You can easily answer the question of how much to risk each trade by taking 1% - 2% of your total trading capital.
As for how to understand the average volatility of the cryptocurrency you are currently trading, you can use the Average True Range, as this tool will help in analyzing the average range of the market.
2- Use your own settings:
After you've traded for a while, you can look and analyze your settings and look at them objectively, to begin to see patterns, from which you will learn how digital currencies work and the types of patterns they create.
Thus, you will be able to do some good deals.
3- Ignore unreliable news:
- The main goal of newspapers and websites is to create content that interests readers and adds value to them.
- But the content does not always have to be real, as this sector suffers from the very prevalence of false and fake news.
- If you are reading an article about cryptocurrency trading from an unknown source, the extent of its authenticity, then here you must scrutinize and not take everything you find in front of you as real, especially those articles that do not rely on known and reliable sources.
- On our part, in Bitcoin Arabs, we strive to investigate the news well before publishing it, scrutinize its sources, and refer to it in every article.
4- Trade what's in front of you:
- Always and when trading cryptocurrencies, there must be a mechanism and a tool to help you in that, there is technical analysis, fundamental analysis, or any other analysis. It is important that your entry and exit be according to a study and a certain mechanism that succeeded with you.
- Cryptocurrency Charts and graphs tell a story of what is happening and whether there is some negativity or positivity in the market.
- It can take years before traders actually begin to listen to the market and start trading as the market demands.
- Traders often get anxious when there are few trading opportunities in the market.
- Often it is at this point that traders start to listen to friends or the media.
- But patience at this stage is beautiful, and not trading is better than trading with a loss.
5- Don't listen to others:
There is a lot of chanting and shouting behind every rise or fall of Bitcoin or other cryptocurrencies, and everyone makes their turn.
If you are old enough to the market then make sure that you also have your own voice that you can listen to and prevent yourself from following every voice made by others.
If you have a goal of being a serious cryptocurrency trader, you need to listen to your courage.
When listening to other traders, you get a lot of information but no idea how to use it.
6- Write everything down:
The trading activity contains a lot of learning by doing.
You will never understand the best trading advice until you try it.
This is why it is so important to jot everything down and memorize what you do.
Write down everything that is happening in the market, the price patterns you see, and the behavior you want to see.
This way, you'll learn what you're doing faster, sooner, and whether you are right or wrong.
7.Hear your mistakes.
Perhaps the most important piece of advice within these 8 important tips for trading cryptocurrencies.
If you don't analyze your mistakes, you are likely to make the same mistakes again.
In cryptocurrency trading and trading activity, there are many mistakes that traders make, and they are:
- Entry into all deals.
- Trade often.
- Portfolio trading as a whole.
- Excess greed.
What we want to say is, when you make a mistake, analyze it and try to learn from it.
8- Leave Ego and Emotion Out of Circulation:
Focusing on your trading operations and relying on numbers and data away from feelings of fear or greed.
This tip takes some patience to master.