Sunday, 17 June 2018 07:53

Top Cryptocurrency Trading Tips: The Definitive List

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Trading can be an extremely rewarding endeavor but with the big rewards comes big risks. The below list of trading tips will save you money over time and lots of hours of needless stress.

Print it, keep it next to your computer and study it every chance you get. These lessons were learned the hard way so that you don't have to. 

Buy the rumor sell the news. Always and at all times. Many traders have gotten burned by buying and holding through a major event like a mainnet launch or airdrop. Smart traders get out of their positions a day or two before the event, allowing them to take large profits and buy back in the inevitable dip that follows.

Plan every trade before taking action. Know at what price you will enter, where to place your stop limit and where your exit target is.

“Cut your losses and let your profits run” Make sure that you keep your losses small and gains big. Do not be afraid to take a quick loss. Most novice traders cut their profits short too earlier and let their losses run on too long. This will eat into your trading capital in time. You need the big gains to offset the small losses.

Position sizing is key to becoming a great trader. When choosing position size make sure you target amount of risk, not percentage gains.

Do not micromanage a trade. Stay on course and stick to your trading plan. Keep fear and emotions out of it.

Know what is going on in the market as a whole. Don’t just focus on your trade. You might be at the start of a overall bear market that might negatively effect your position in a specific trade.

Learn us much about technical analysis as possible. This is one of the most important arrows in your quiver. Study up on all the indicators, choose the ones that work for you and stick to it. Tradingview.com is best for this. Click here to register. RSI Indicators shows divergences at major points and stochastic to show overbought and oversold signals.

The trends represent the human emotions of fear and greed. Keep that in mind at all times when trading. What you are selling, someone else is buying. Try and get into the mind of the buyer or seller when making your trade. Try and understand why they are making their trade.

Keep your day job while you learn the ropes and get more experience. The last thing a new trader needs is to worry about is the monthly bills. It takes time to become a good trader and even longer to become a great trader.

Protect your trading capital. Your trading stack is your most important asset. Learn to use proper position sizing and manage your risk carefully. Keep some cash in reserve in case the market dumps or new opportunities arise. 20% liquidity is recommended.

Find and define a unique process that works for you and stick to it. Your process and trading rules will protect you in the down turns and market crashes, and help you maximize profits in the long term.

Build a watch list each day that you focus on and focus on those coins.

Practice with smaller amounts at first until you get comfortable with the ins and outs of trading, how to open a trade, limit orders etc. This keeps the risks small and protects your capital until you gain expereince. This will also insure that you enjoy the process more than you would if you were trading with large amounts that would stress you out.

When the markets are moving quickly, try not to react too quickly. Take a deep breath, review your trading rules, fundamentals and the latest news. This will save you from making mistakes over the long term because you will not be entering the trade with your emotions racing. Patience is key.

“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful” ― Warren Buffett. Sometimes it pays to go against the tide. Being a contrarian trader can bring in large profits because sometimes when everyone is certain that the markets will crash lower, it turns bullish and surprises everyone. Everyone except the contrarians. Be open to changing your views on the current status of the market. Don’t get locked in on one train of thought but be flexible and able to go from bullish to bearish if all the boxes are ticked.

Be wary of the Fear of Missing Out (FOMO). There will be many, many times when you feel the indicators shout at you when a coin is pumping and the green candles moon. Telegram groups are filled with buy messages and it is difficult in these moments to not take action when everything screams buy. There is a lot of manipulation in the crypto space and many pump and dump groups make a living by using the two human emotions of greed and fear. They pump the price up to an agreed upon point and then start dumping it into the hands of fomo buyers. Don’t be that trader.

Remember the long-term effect of fees. Trading fees can eat into your profits if you don’t keep track of them. Many exchanges ask up to 0.2% per trade and that can have a negative effect over time. Binance has one of the lowest fees in the market at 0.05% (when Binance coin is activated). There are also 0% exchanges out there like Cobinhood with more coming online daily, although the volume is very low at the moment.

Don’t try and make a trade out of nothing. There will be plenty trading opportunities and trying to force a profitable one where it does not exist will get you in trouble. Wait for the opportune time before opening a trade.

Your ego is not your friend. Try not to let your ego get in the way. You don’t need to be right on every single trade. Some of the world’s best traders are wrong more than 50% of the time. Your goal is profit, not being right. The quicker you get over that the sooner you can get out of a losing trade.

Not all crashed coins come back up. When searching for bargains, don’t make the mistake of assuming every coin will bounce back to all time high. Study the team behind it, make sure they have an active community, read the whitepaper for once, and check to see if there are any events coming up like mainnet launches or airdops. This will help you decrease the likelihood of getting trapped in a trade.

Decide carefully what type of trader you would like to be. Day Trader or Swing Trader.

  • Day traders make multiple trades a day by using mostly TA to decide where to enter and exit trades and thereby make a living from the profits. They focus on small profits throughout the day with as little as possible losses. Newbie traders be warned. This takes a significant amount of time and is certainly the more stressful of the two.
  • Swing traders focus on long term trends and look for swings in coins over a few days or weeks. There is a chance for significant profits trading this way. You also only need a couple of hours a day and it is even possible to keep your day job while doing this type of trading.

Never invest more than you can afford to lose. So many horror stories litter the internet about people who bonded their house to buy crypto or are maxed out on credit cards when they bought at the top. Always remember to just invest what you can afford to lose. It will take all the enjoyment out of trading if you invest too much money and will make you take bigger and bigger risks because your trading will be driving by fear. This is a high risk game we play.

Don’t let greed be your master. Take profit when you can and put part of that profit away. By taking profit regularly, you will not regret it later when the market takes a dive or when a big trade goes wrong. Take some money off the table when a trade goes your way. The more you do it the easier it will become.

Remember your end goal. What is your long term goal with trading? Is it to buy a nice house for your family, to put yourself through college or to buy your dream car. Whatever it is, it is personal and yours. Own it, think it, breath it. Find out your goal before you even start and remind yourself regularly what that is. This will keep your eyes on the prize and keep you focused during the tough times.

Your mistakes can be your greatest teacher. Learn from trades that went bad or mistakes that you made. Some of my early losses saved me thousands down the line when the stakes where bigger. Don’t be afraid to make mistakes early one when your trading amounts are smaller. You can learn as much, if not more from your losing trades than your winning trades.

Become a Stop Loss Guru. Stop losses will be your greatest allay in the game of trading and will keep your losses small and help to protect your trading capital. Learn everything you can about stop losses, where and when to place them. Work at it till it becomes second nature to you. This is one of the most important steps on the road to becoming a great trader. Learn everything you can about it asap.

Find a Tribe. Find a community of likeminded individuals that are preferably better than you. There are many telegram groups out there, most of them rubbish, so be careful where you join. Some of these groups pray on new members by using them in pump and dump schemes. But there are real gems out there that offer support and opportunities to learn. Crypto Kirby is one such group. The community offers great support, tips and knowledge that at times feels like a hive mind of expert traders all in one place. Highly recommended for beginner or advanced traders.

Find great resources for learning. There are a multitude of Youtube channels out there each with its own expert spouting wisdoms. Be careful where you turn to for you knowledge. Some of them are paid to shill coins or are just in it for themselves.

Some of the top ones though are:

Would love to hear the best trading advice you've ever heard or given. Leave a comment below

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1 comment

  • Comment Link Prof van Riet Sunday, 17 June 2018 13:36 posted by Prof van Riet

    Look at the day graph before trading any coin, it gives perspective

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