Trading-Tips

BitExplorer

#SafetyRules were written with blood.

That #statement sounds familiar to every #soldier around.

Although we are not dealing with a #risk to human lives, losing your expensive #Bitcoins by making #mistakes trading is #efinitely not a fun situation.

So, how we can avoid those #mistakes in our trading? How to be mostly on the green side? #First, it is important to note that to #trade right requires attention and your one hundred percent focus. #Secondly, trading is not for #everyone. The following #tips are easy to #internalize because these tips were “#written in blood” (my own #blood). However, it is still very difficult to apply them in real time. After all, we are not #rational human #beings.

Have a #reason before entering each trade:

Start a #trade only when you know why you’re starting and have a clear strategy for #afterwards.
Not all #traders make gains from trading, since this is a zero-sum game (for everyone who #benefits someone else loses on the other #side).The Altcoins market is driven by large #whales (yes, the same ones responsible for placing #huge blocks of hundreds of Bitcoins on the order book). The #whales are just waiting #patiently for innocent little fish like us to make mistakes. Even if you aspire to #trade on a daily #basis, sometimes it is better not to earn and do nothing, instead of jumping into the #rushing water and exposing your #coins to losses. From my experience, there are days where you only keep your #profits by not #trading at all.

Target and #stop when starting a trade:

For each #trade we must set a clear target level for taking profit and more #importantly, a #stop-loss level for cutting #losses. A Stop/loss is setting the #level of loss where the #trade will get #closed.
Here again, it is #important considering a number of factors when choosing a #stop #loss #level correctly. Most traders #fail when they fall in love with a trade or the coin itself. They may say: “Here will be a turnaround, and I will get out of this #trade with a minimum #loss, I’m sure”. They’re letting their#ego take control of them and unlike the #traditional stock exchange where extreme #daily #movements are considered 2-3% in #value, Crypto trades are a lot more riskier: in my life as a# trader I’ve seen a coin dumping by 80% just in a few #hours! And nobody wants to be the one who is left #holding it.

Meet #FOMO (fear of missing out):

Indeed, it really isn’t f#un to see such situations from the outside – when a certain #coin is being pumped up like crazy with #huge two-digit gains in minutes.
That bold green #candle yells at you “you are the only one not #holding me”. At exactly this #point you will notice lame people #flooding the Crypto forums and the exchanges’ Troll boxes to talk about this# pump. But what do we do now? Very #simple, Keep moving forward. True, it’s #possible that many may have caught the rise #ahead of us and it can continue raising, but bare in mind that the #whales (as mentioned above) are just #waiting for small buyers on the way up to sell them the coins they #bought in cheaper prices. Prices are #now high and it’s clear that the current coin holders only consist of those little #fish. #Needless to say, the next step is usually the bright red candle which sells through the #whole order book.

Risk #Management:

little pig eats a lot, #big pig gets eaten. This statement tells the story of the market #profits from our perspective. To be a #profitable trader, you never look for the peak of the #movement. You look for the small #profits that will accumulate into a #big one.
Manage #risk wisely across your portfolio. For example, you should never #invest more than small percentage of your #portfolio in a non-liquid market (very high risk). To those# trades we will assign greater #tolerance – the stop and target levels will be chosen far from the #buying level.

The underlying #asset creates volatile market conditions:

Most #Altcoins are traded according to the Bitcoin value.
Bitcoin is a #volatile asset (relative to FIAT) and this fact should be taken into #consideration, especially in the days when the #Bitcoin value is moving sharply. Bitcoin and #Altcoins have an inverse relationship in their value, i.e. when the #value of Bitcoin rises then #Altcoins are losing their Bitcoin value, and vice versa. When #Bitcoin is volatile, our conditions for trading are kind of #foggy. During fog we can’t see much #ahead, so it is better to have close targets for our trades or not to #trade at all.

Tips for #trading #Altcoins:

Most #Altcoins lose their value over time. They simply bleed their #value away slowly (sometimes rapidly).
Take this into #account when holding Alts for the medium and long term, and of course choose them carefully. What kind of #Alts are recommended for the long term? #Remember, this is only when there is a reason for making a #trade. The projects/coins that have a higher daily trading #volume and which have a widespread #community behind them, with continuous #development, are here to stay with us:

#Ethereum ETH, #Monero XMR, #Factom FCT, #DASH, are all leading coins and traded the most #volume daily. You should follow the# coin’s chart and identify low and stable periods. Such #periods are likely to be a consolidation period by the #whales, and when the right #time comes, accompanied by a good press release of the #project, the pump will start and they will sell in #profit.

A word about public #ICOs (crowd-sales):

Many new #projects choose to make a crowd-sale where they offer investors an early #opportunity to buy a share of the #project (tokens or coins) in what is meant to be a good price for the #tokens.
The #motivation for the investors is that the token will be traded from day one on the #exchanges and would #yield a nice profit to the ICO participants. In recent #years, there have been many successful ICOs, both the #project itself and especially in measuring the yield for #investors. Coins doubled, or tripled, their value and much more in #relation to their value on the #crowd sale. Augur’s preliminary #crowd-sale (we reported on it previously here) yielded investors a #phenomenal 1,000% for their #investment. Okay, but what’s the catch here? Not all the projects benefit their #investors. Many ICOs proved to be complete# scams, not only were they not being traded at all but some #projects disappeared with the #money and we have not heard from them right up to this #day.

So how do you know if you should #invest in an ICO? It’s not about #science, it is important to pay attention to the level of #seriousness of the project and its team. Look for the project’s #website (does it look like a child has built it during #computer school?), Who is the team behind the #project – Are they hiding behind nicknames or #proudly present themselves on their website? #Pay attention to the #Bitcointalk thread (does it exist at all?) and how the team members respond to #technical questions. Is there a large #community behind the project? Expect to see a Slack gathering its #community. Watch out the amount raised: A #project which had raised too little will probably will not be able to #develop over time, a project which had #aised huge amount – there won’t be enough #investors left out there to buy coins on #exchanges. And most #importantly is risk #management. Never put all eggs in one basket and invest too much of your #portfolio in one #ICO.

A final tip – #practical steps to implement right away:

Fees, #fees, fees: Multiple trade actions = More fees. It’s always advisable to post the #command (maker) and not to buy from the #order book (taker). In #Poloniex exchange, the difference is 0.1% in favor of the #maker. That’s quite a bit.
Traders with no #pressure: Don’t start trading unless you have the #optimal conditions to make the decision to #start a trade and know when and how to get out of it. #Pressure almost always creates losing #trades. Wait for the next #opportunity, you will get there.
Setting #goals and placing sell orders: always set your #goals by putting sell orders. You don’t know when a #whale will pump your coin up to catch your #command (and pay a reduced fee on the “maker” side, remember?).

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