Crypto trading is a fast-paced world that can be difficult to get into. With so many new coins and tokens being introduced each day, it’s hard to know which ones are worth investing in.
But don’t worry! In this article, we’ll go over the top seven tips for crypto trading success. They’re easy to understand and they’ll help you become a pro in no time. Let’s dive right in!
1) Know When To Sell
Many people have been able to make good money by simply buying low and selling high on the market. However, it takes a certain level of intuition about when a coin will rise or fall before they invest their money into it. Bitcoin is the largest crypto asset by capitalization and if you want to trade successfully, you’ll need to be able to do this. First, you need to know how much money you’re willing to risk on a coin; each time that it rises or falls by 30%, cut your losses and close out the trade. Try looking at our price chart for Beam (BEAM), which shows all of the highs and lows for the coin over the past 24 hours. When trading, always remember that you need to have a selling point in mind as well. This is the price at which you’ll be happy to take your profits and walk away.
2) Diversify Your Portfolio
One of the biggest mistakes that new traders make is investing all of their money into a single cryptocurrency. Because all digital currencies tend to fluctuate in value, it’s important that you diversify your portfolio and have a backup plan if one or two start tanking.
For example, if you decide that you want to invest 20% of your trading capital into NEO (NEO), which has been performing well lately, you’ll also want to spread your remaining 80% of money across 5-10 different coins. This way, if NEO falls in value, the rest of your portfolio will not be affected
3) Don’t Maintain Unrealistic Expectations
One thing that many people overlook before they begin trading is their expectations for where a coin is heading. If you hop onto an up-trending coin after it’s already extended significantly higher than its average price, there’s no guarantee that it will continue to rise. While you can certainly make money with this method, it’s important that you don’t get greedy and purchase a thinly-traded cryptocurrency just because its price has shot up in the last 24 hours.
To prevent yourself from making this mistake, always remember to limit your position size and consider setting a strict profit target for when you sell your crypto. This way, even if the coin dips down in value, you won’t be caught off guard.
4) Manage Your Trading Capital Efficiently
One of the worst things that you can do as a trader is to not watch your money properly. If you’re waiting for a coin to increase in value and it never does, all of your time and money has been wasted. Most people manage their trading capital by only checking back on their cryptocurrency once or twice per week because they don’t want to miss out on potential gains. But this is actually one of the biggest mistakes that traders make – especially if they’re new to the scene! It’s important that you check up on your portfolio every day at least once without fail. This way, if one of your coins drops significantly overnight you won’t be caught off guard. You’ll also know which coins to sell and which ones to keep.
5) Don’t Put All Of Your Eggs In One Basket
The next tip for beginners is to remember not to keep all of your trading capital in one place. Many people make the mistake of keeping all of their money in a single cryptocurrency. While it might be convenient, this can also lead to some serious problems if the price crashes and you don’t have any backup funds to fall back on.
One good strategy is to use a percentage of your trading capital for each coin that you invest in. For example, let’s say that you have three different cryptocurrencies – Bitcoin (BTC), Litecoin (LTC) and Monero (XMR). You could then put 50% of your money into BTC, 30% into LTC and 20% into XMR. This way, even if one coin falls dramatically in value overnight it won’t affect the rest of your portfolio. This is an easy method that many new traders use when they first start out trading.
6) Don’t Panic Sell
When you’re in the cryptocurrency game, it’s important that you remember to not panic-sell your coins. If the price of one (or several) of your holdings crashes in value overnight, don’t be tempted to sell immediately. Instead, hold onto your coins for at least 24 hours and see how things pan out. Sometimes a stock will crash significantly after hours even though there was no major news released during this time – these are often referred to as “flash crashes.” If you have some experience under your belt, you might even want to take advantage of this phenomenon by placing limit buy/sell orders or buying on dips if something looks promising.
7) Don’t Put Emotions In The Mix
This next trading tip is important for everyone – new traders and experienced veterans alike! When you’re in the midst of a profitable run, it’s easy to get overzealous. Suddenly there seems to be nothing stopping you from achieving exponential gains, and this leads many people to start thinking that they have become invincible. However, this mentality can easily lead to disastrous consequences if your exuberance gets the better of you. Always remember that succumbing to an emotional state will only lead you astray because nobody has a crystal ball.
The cryptocurrency market is an extremely volatile one. If you’re new to trading, it’s important that you follow these tips so that your investment doesn’t crash in value overnight! Remember not to invest 100% of your capital into a single currency or coin – instead, manage this by using percentages and diversifying across different holdings. It’s also smart to keep tabs on the markets during the day every once in a while without fail because “flash crashes” are quite common.