Trading crypto is not about striking it rich once. If you want to have a good time trading cryptocurrencies, you must build your success on good experiences, fundamentals, and experience.
If you are a beginner and especially don’t know the “rules,” crypto trading may be daunting. You must wade into the water gradually as you gain more expertise, just as in other investments.
The good news is that we’re here to help! We’ve put up three golden rules to assist you on your crypto trading journey.
1. Trading Requires Experience
The first golden rule for trading cryptocurrencies is that you need experience. You cannot expect to be successful from the get-go; you need to learn the ropes and make some mistakes to become successful.
One way to get experience is to join a trading chat room or forum to discuss trades with other traders. You can also find a mentor, someone who has been trading for a while and can help guide you in the right direction.
Finally, you can read books or watch videos about trading cryptocurrencies and start to apply your knowledge as you learn.
When gathering information from these forums and courses, ensure you learn about: Trend lines, stochastic RSI, Moving averages, candlesticks basics, bull flags, downward and upward trends, wedges, and breakouts.
For further analysis, ensure you always use longer timeframes. If you are doing an M5, M15, or M30 trade, look at the H1 to H4 or even D1 charts for a more accurate analysis. Don’t look at a chart for a trend in minutes if you can’t spot the trend in hours.
2. Know why you are trading
You must know precisely why you’re looking at training your cryptocurrencies pair. Are you trying to make great returns on your investment because of FOMO ( Fear Of Missing Out )? Or are you in it for the long haul?
FOMO is the most common cause of traders’ failure. It just takes a little media buzz, a few investment “experts” opinions, and a little bit of anxiety on your part to get you to make the wrong trade.
You must also know how you’re trading. There are three ways to trade cryptocurrencies:
- Day trading
- Swing trading
- Investing
Day trading is the short-term buying and selling of coins within the same day or a few days. This method requires daily monitoring of the markets to make trades at the right time.
Swing trading is buying and selling coins within a week or two, which allows for a greater degree of analysis before making any trades.
Investing in cryptocurrencies means buying and holding coins for a longer period, typically months or years, before selling and vice versa.
You should also determine your risk tolerance. What are you willing to lose on a single trade? Many people invest their life savings into crypto trading and lose most of their money because they don’t know why they made that trade.
The best idea would be to invest about 1-5% of your total money on a single trade, depending on what you have at stake at the moment. And have a clear idea why you have made that trade. Never commit everything to one coin!
3. Choose a Reliable Broker
The last golden rule is choosing the best broker offering crypto trading options. Getting the right broker is half battle won. There are hundreds of online brokers that provide Forex and cryptocurrencies trading options. However, you are not supposed to choose every broker your first encounter online from your search.
The best broker is genuine and reliable. Remember that your money is at stake, so it’s essential to know whether or not you can trust your broker with them.
Also, check that your broker is regulated and from which country. This is the most certain way to ensure that they are trustworthy and guaranteed. Regulated brokers provide the best execution rates, digital security measures, and exceptional client service when you need it.
The two most important features you should search for in a broker, particularly if you are a novice trader, are learning materials and demo accounts to help you learn how to trade cryptocurrencies from the broker.
So, how do you find the best crypto broker out of the many available brokers online? The right way to find a broker is from research.
Look online for as much information as you can about the broker, including recommendations and reviews from other users from the same broker.
If you encounter anything questionable, don’t opt for that broker since you risk becoming a part of a bad trading experience that will result in you losing a significant amount of money.
Bottom Line
These three golden rules should be kept in mind if you want to increase the chance of your trading efforts paying off. Remember, your goal as a trader is to make money; it isn’t to win every trade. Set yourself up for success by adhering to these three golden rules and start trading cryptocurrencies like a pro!
