Crypto Trader Advice
Just Some wise words of Advice I found from a Crypto Trader
thought I would share with you guys before you enter this cryptocurreny game
and start losing profit/gains/ money.(hopefully not)
There are three main components to trading:
Psychology is the most important part of trading, and if you haven't mastered it, you will make all the wrong calls.
Here is how to keep a balanced head.
Many of the things below are basic, but trust me, your going to make all these mistakes sooner or later.
So lets get in to it.
You are supposed to feel bored or completely neutral.
Trading is supposed to be boring, if you are winning that is.
Only play with a small amount at the start: if you lose $100, it is not a big deal.
After you double your money from $100 dollars, you can withdraw $100 and continue playing with the remaining $100 that is pure profit. Idea is to keep playing with the money you made, not the money you originally invested. This helps keep you emotionally sound. Good traders turn $100 into $1000, easy, you are still learning and want to be able to reach that point with minimal losses.
When you get good and start making money, don't make the mistake of playing with too large of an amount, as it will influence your emotions. Many retail traders limit themselves to 10k because of this.
When you are good at trading, don't accept to trade for friends, it will emotionally drain you knowing you are responsible for other people's money.
IMPORTANT: Do not TRUST ANY youtube traders or traders on tradingviews for your calls, even the best of the best make mistakes, and are only right a maximum of 70% of the time. I like Marcpmarkets personally but you only need to watch his predictions for this month to see how bad it turned out. Your money, YOUR RESPONSIBILITY.
Understand that institutions control the money in this game and all you are doing is following the wind.
never trade on drugs
never trade when tired
Greed will make you lose a lot of money, as it is a powerful emotional state. Remember, we want to be like the bots and trading algorithms.
Traditional traders only trade 2% of their entire balance. Crypto traders seem ballzy and generally go for 10% of their balance. Don't get greedy, if your strategy works, the laws of probability are on your side.
never stay in a trade overnight. see #5 under risk management below.
Beware of overtrading: that is when mistakes are made. That is why I only make 1 high probability trade every 1-2 days, and am on BHW to find other streams of income. I know of an actual professional trader that wakes up in the morning, makes 1-4 trades and calls it a day: low stress. This part is up to you, but i recommend you start off with as few trades as possible.
Keep your male EGO in check. There is a difference between confidence and ego. Ask yourself if you have a big ego before you enter this game, and ask yourself how you will manage it.
Risk-Management is the second most important factor. Here is what you need to learn and what you must use for EVERY SINGLE TRADE:
risk reward ratio, and how that leads to you winning mathematically over time.
laddering, because no one knows where the exact bottom or top is.
sometimes we enter bad trades, learn to spot the signs and exit quickly.
Reaction over Prediction.
It is better to react to the market than predict where it will go, because no one knows where bitcoin will be 1 week from now.
Signs of bullish/bearish divergence can happen within a single day and can quickly turn a market from bull to bear and vice versa.
It was also fun watch a vast majority of people in the trading community predict that bitcoin will go up, only to see it crash then watch the awkward radio silence.
Nobody can predict the price of bitcoin.
Better to be a reactive trader (scalper) than an investor.
This rule does not apply if you have insider trading knowledge.
Some may take 30 minutes. some may even take an hour.
Some trades do require that patience.
But keep in mind, the more you hold onto the trade, the more your RISK grows as time goes on.
Strategy
Acceptable # of strategies to combine: 1-3 (ie. rsi, macd, EMAs)
always have a stoploss and takeprofit target, for me this is generally around 0.5-3% depending on the coin.
Don't pay for or follow trading strategies online unless you can write a script to test them out.
I used ninjatrader to see if my strategy to see if I would be profitable overtime.
Didn't work out because the dataset was buggy (missing LARGE candlesticks, which erroneously registered great losses or great profits).
Might write one for tradingview or maybe they fixed it by now.
If you are unable to do that, you can just test them with your starting $100.
Backtest your strategy for free before committing actual money if you can.
If you can automate the process, even better.
A business always seeks to minimize losses and liabilities first, before going into maximizing profits.
That doesn't mean don't take risks! but make sure the rewards are huge relative to the risk you are taking.
If bitcoin tanks, cryptos will TANK. if bitcoin goes up, after a few hours cryptos will follow.
I don't care HOW GREAT your coin is, bitcoin will influence its price.
There are some coins that appear to move independently from bitcoin, but depending on how HARD the price DROPS or
RISES, these coins WILL be drastically affected.
Don't believe me?
Go put alerts on the 15 min rsi overbought/oversold region of bitcoin and other alt coins.
Most of the time the alerts will ring for all of them 1 minute apart from each other.
Final Note -
This is to be treated as an intro for Trading CryptoCurrencies.
You are all still responsible for learning TA and learning it right. (learn the right way here- LEARN TA THE RIGHT WAY
Don't fall for scammers on tradingview, youtube, or pay for trading groups... some of those people don't even trade but make money off showing you some nice little charts with their "predictions."
90% of retail traders lose money. The only way to make money is to follow the institutions. or Better your Trading Knowledge here => REAL CRYPTO TRADERS <= and their => HOLY GRAIL OF KNOWLEDGE <=
Good luck.
