You definitely have a friend who made a lot of money trading cryptocurrencies back in 2017 when the market was in a bull run. Even though he made good profits, was he really a good trader and investor? What defines a good trader? A good trader is someone who has a strong trading system and is self-discipline. One that is guided by probability and not possibility. Excelling well in trading using technical analysis also requires strong risk management.
Aside to the volatility, the cryptocurrency market is not very different from the traditional stock market as people make the market. Human psychology does not change, traders/investors today still face the same emotions of fear and greed.
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This article will comprise of a three part series, going through 15 trading rules to follow when trading cryptocurrencies. If you have not read Part 1, this is the link to the first article, Click here
We hope this article will give you the right knowledge to help you build up a strong trading system.
Golden Rule No. 6
Buy the dips during the bull market!
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Bitcoin was in a bull run in 2017 and there were lots of buying opportunities. In a bull run, when there are price pullbacks, it is the best time to load in more Bitcoins. That way you are able to increase your position size.
Golden Rule No. 7
Let your profits ride higher!
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Trading in the crypto space is high rewards and high returns. There was a trader who entered a trade for Ripple at $1.00 and sold at $1.30 after a few days, it was a great trade with 30% profits! However in the next few weeks, Ripple prices rose to $3!
One must adjust the profit percentage higher as trading cryptocurrencies are higher risk and therefore should set higher profit margins.
When you take profits, you should be humble and grateful for the good trade. Never let ego and pride take control of the trading.
Golden Rule No. 8
Never be the last to take profits!
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When your trades are profitable, it is good to take profits. One method is called laddering when you start taking profits along the way and downsize your positions. This also reduces the emotions if prices fall back down.
It is time to be pound wise and not penny wise. If you are near your profit target, you should start taking profits rather than waiting for the exact price to hit the target.
Golden Rule No. 9
Be impatient with your losing trades!
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There is a commonly known term in the crypto space which is “HODL” that stands for hold on for dear life. This term came about because crypto prices are so volatile and traders have to stomach big losses by holding, and ride out the volatile market and hopefully one day make a profit.
This term HODL is actually not a good mentality for traders to hold on to losing trades. Trading requires discipline and setting of stop losses. If the stop loss is hit, have to cut your positions. In 2018, some of tokens loss about 90% of their valuation which can wipe out the entire portfolio just by holding. If you will like to store your tokens, you can check out Mars Wallet where you and store, send and trade in the all in one App securely!
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Mars Wallet– A secure platform to store, trade and stake your tokens!
Mars Wallet is an important node in the ecosystem under the Mars Blockchain Group, which uses google 2FA, a two-factor authentication process that provides four-fold security verification to ensure that user’s tokens can be recovered in the event of a hack or fraud.
In addition, Mars wallet withdrawals are limited to every 24 hours, in order to avoid huge losses for users in the event of hacking. The App is available on the iOS and Android store.
For more information on Mars Wallet, keep up with its following social media:
Telegram: https://t.me/marswallet
Reddit:https://www.reddit.com/user/1-SG/
Twitter: https://twitter.com/1SG_2018
Instagram: https://www.instagram.com/marswallet_sg/
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