Crypto Trading: A Checklist of 19 Main Rules for Successful Traders

Crypto trading. Checklist of a successful investor

04 Dec, 2019 Endy Callahan

The crypto market is a place where you can become a millionaire in just a few months, or you can lose all your capital on rash steps. It inherited many of the rules from the traditional financial market, but differs from it in great volatility and often unpredictability. In such circumstances, discipline becomes one of the keys to success.

We have prepared for you 19 main points of an experienced crypto trader, which you need to strictly follow if you do not want to lose all balance in exchange games.

  1. Trade and invest in cryptocurrencies only the money that you are ready to lose. Do not take loans or borrow from loved ones, work with the capital that will not break an irreparable gap in your budget. This is especially true for beginner enthusiasts.
  2. Always use stop loss. This is a type of exchange order, in which, if the price drops to a certain level - you sell automatically. It is not on all exchanges, but where it is present, it will help you take profits and save you from big losses.
  3. Sometimes stop-loss will force you to exit a trading deal with a small minus. Keep calm, be prepared to bear losses and trade further. Without stepping in time in time, you run the risk of getting stuck in a slowly sagging asset instead of trading.
  4. There are two areas in trading that require great care and at least basic experience - trading with leverage and shorts. Trading with leverage allows you to increase your position and, consequently, profit, at the expense of funds taken from the exchange. But you can lose your money much faster. Short trading is a risky but potentially lucrative method. Basically, it is speculating on the decline of the stock. First, practice with your own deposit in the regular market, and then decide to enter these areas.
  5. Do not be afraid of mistakes and understand that you can lose profits during trading. Mistakes are not so bad, especially at the beginning. This is a great material to learn from.
  6. Before you buy any asset, always ask yourself a question - “Why am I buying this coin?” If you don’t have a clear answer to it, don’t enter the deal.
  7. If you want to buy or sell a token based on a forecast in some chat or forum, first conduct your own research. Check the data given to you. Learn to check for yourself what you buy.
  8. Do not buy at peak prices. If you see that the coin has already gone far up, it’s wiser to hold off. An asset cannot grow forever, and no one guarantees that you will not take it in such a situation at an inflated price.
  9. All processes in the cryptocurrency market go in a circle. Correction always follows growth - it cannot go in one direction forever.
  10. Keep control of your emotions. The exchange is not a casino where you can solely rely on being lucky. The market is a territory of cold calculation, analytics and risk management.
  11. Find your own trading strategy that is comfortable for you. Improve it every day by analyzing the experience of mistakes and trying new tools.
  12. Trading is not such a simple job as they want to present in social networks. This is not an around-the-clock vacation in the Maldives, you will spend time on analytics and on the trade itself a lot.
  13. Look at the market in terms of fundamental analysis. Do not plunge inside, try to keep a view from the side.
  14. Fundamental analysis (tracking vital news for the industry and global changes) is much more important than technical and computer analysis (indicators).
  15. Trade on different exchanges, do not dwell on one platform and do not keep all your money in one place. Be very careful with your private keys and keep track of the address of the exchange website. Phishing sites have tricked a lot of users. 
  16. When 10 out of 10 experts bet on further growth - it's time to exit the transaction and take profits.
  17. Do not worry about lost profits. Remember that it is better to go to any plus than zero or even incur losses.
  18. A minimum of 30% of the portfolio is best kept in bitcoin. Do not get involved in playing with altcoins - they are even more unpredictable and subject to manipulation than the main cryptocurrency.
  19. A very simple and important rule: buy low, sell high. Not everyone succeeds in following it, but this is the basis of profitable trading.

Follow these simple rules before trading. If you do not follow at least one of them, you risk losing control of emotions, making a rash transaction or not making a full profit. Follow discipline, learn from mistakes - and your path to the cryptocurrency market will be profitable.