Tips for Trading Efficiently in Bitcoins & Altcoins
Being efficient at trading is essential for booking profits in the long term. The goal is to remain on the positive side of the market. But how to make the right trading moves in a volatile cryptocurrency market? By avoiding silly trading mistakes and staying focused, trading is not quite hard. Remember, if you are a passive trader, you should not shoot for the stars right away. Make a consistent schedule and be attentive to the market before jumping in on a trade that appears lucrative.
Of course, you must avoid tip-offs but should adhere to some trading rules that we are writing below if you want to achieve your goal in the long term from cryptocurrency trading. Here we reveal some tips for efficient trading:
Back your trades by a solid reason every time
Trading haphazardly will never lead you anywhere. Only enter a trade when you have a clear picture in mind and a strategy in action. It is not essential that you book profits from each trade and every time, but when you do, the profits should be worthwhile. In order to improve your profits, your trading decision must be backed by a prudent research instead of rumours. Rather than making a mistake and regretting it later, it is important to study and analyze the patterns and trade only when you have a reason to do so.
Create a target and stop-loss level
It is important to set a clear target level to achieve while starting to trade. Also, set a stop-loss level to limit your loss in case the market tumbles. It is important to set the stop loss level correctly. Instead of being emotional, be rational and keep your ego aside when you are in the market. Unlike traditional financial market movements, the crypto market movement is not particularly stable but highly volatile. This makes crypto trades riskier than conventional stock market trades. Your investment value can corrode enormously in a matter of few hours if you do not create a set target/stop loss level and adhere to it religiously.
Stop worrying about fear of missing out
Instead of rushing to enter a trade instantly when you see a green signal and growth patterns, you should wait for a while. As Bitcoin and other altcoins sometimes rise crazily in a matter of minutes, the green gains can tempt you to start trading right away. Instead of suffering from the fear of missing out, you should not carelessly enter a cycle that you do not understand. Sometimes, the market can rise without any visible reason, making you regret the decision of not starting a trade. But the opposite can also be true. When the trade volumes are high and everyone is buying, a large investor can shed his load and can make that profits vanish away in a matter of seconds, making you regret entering the rally.
Value of an altcoin is relative to Bitcoin value
You must know that bitcoin is a very volatile currency and value of other altcoins depends on its value. So, while entering a trade in altcoins, keep the value of bitcoin in mind, always.
Bitcoin Rise - Altcoin Fall
Bitcoin Fall - Altcoin Fall
Bitcoin Stable - Altcoin Rise
In case bitcoin prices are moving sharply in one direction, keep your trade targets tight or completely avoid trading in altcoins for the time being.
Manage risks by diversifying your portfolio
It is important to manage risk and avoid putting all your eggs in one basket. In order to be a profitable crypto trade, you need to stop being emotionally attached to a single coin and instead diversify your portfolio among major cryptocurrencies. Also, avoid looking for peaks and grab small profits at regular intervals to stay away from large-scale market dips. This will help you manage risk in an efficient way.
Don’t just throw away money in ICOs
ICOs might appear lucrative from a point of investor, but if you want to be a profitable trader, avoid the temptation of investing in every ICO you come across. They might promise cheap coins and an instant profit on hitting the exchange, but there can be some serious ramifications, if a solid team does not back an ICO. Generally, an ICO succeeds if the project is trying to solve a problem that others have not thought about. At the same time, the team behind ICO must be technically sound and knowledgeable. You can check the same at cryptocurrency forums where the ICO team is active. If the whole crypto community at large is enthusiastic about a particular ICO, you can consider investing prudently, instead of throwing a large sum.
Being a disciplined trader requires a commitment to be active at most of the times. If you are looking at the long-term prospects and have entered trading, then it is better to listen to a word or two of caution to avoid silly mistakes. In order to get the best out of a trading platform, you must start trading wisely and regularize your trades while keeping in mind the above tips. The market will surely reward you for wise moves and you will not regret investing in cryptocurrencies.
Keep trading and building a portfolio to achieve your financial goals. All the best 8)