Fundation for successful crypto trading

News is full of reports on significant gains and losses of crypto-traders. But is crypto trading really a way of earning?

How to become a good crypto trader

Well, probably someone who has traded cryptocurrencies at least a couple of times has something to advise you. But that doesn’t mean their advice will lead you to success. To become a successful crypto trader, and turn trading into a place of constant earnings, you should make a lot of effort.

And so, let’s start:

Summarize your current circumstances

Before you start putting your money into the crypt, you need to evaluate your current circumstances first. It’s important to know exactly how much money you have to invest, and how much you can afford to lose. Yes, exactly lose. You have to always be prepared for it. Attempts to invest without having a clear view of their finances are bound to end badly. Like any other form of trading or speculation, buying and selling crypt by no means guarantees you income. You need to work hard to get it.

You don’t just have to look at how much money you have in your bank account, and right now use that amount. To get a useful understanding of your financial situation, you need to know what regular payments you have, and what the sources of your income are. Things like your utility bills will change from month to month, but you can easily calculate the average figure. This will help you in the future properly plan your financial expenses.

Set Realistic Goals

With any form of investing or trading, you have to keep in mind a clear set of goals from the start. Ask yourself what you hope to gain from this process and then assess whether your goals are realistic or not. If that’s not the case, you should reconsider your decision.

A lot of people start trading because they see it as a way out of their current situation. It is possible, although difficult, to replace the income from work with the income you receive from crypto trading. But you have to have a goal besides making money. You have to be clear about how much money you can realistically expect to make in any given period. It is very good to set more ambitious goals, but simply setting them will not help you achieve them.

You also need to think about how you will increase your income. The price of crypto is notoriously unstable: it grows and falls by thousands of dollars in one day. But do not expect that you just buy a crypto asset, and then press the “sell” button as soon as the price grows, the heavens will unfold, and heavenly manna will grow on you, in the form of a crazy profit. You’ll probably have to wait a bit before your coin gains notable value, if it gains any value at all. While you are waiting for your cryptocurrency to grow in price, you need to get money from somewhere, and then you will help the strategy and style of crypto trading.

Some crypto traders operate as day traders. In other words, they seek to resolve transactions they make within 24 hours of their first opening. To do this successfully, you will need to invest in altcoins.

It’s reasonable to develop a trading strategy. Your strategy doesn’t have to be rigid or limit your trading ambitions. But coming up with everything on the go is a bad idea.

Trading styles in the crypto market

Crypto traders approach trading differently, depending on what works for them. Beginners have several strategies and styles that will help to succeed in the market. Let’s look at the most popular ones.

Long-term

This style of trading is very popular, and in crypto space is often referred to as “HodLing”. It is best suited for traders with a long investment horizon. So they want to hold the cryptocurrency for several years. Because of this, long-term crypto traders want to own assets that will exist for many years to come. Now it is difficult to determine which cryptocurrencies will fall into this category, but “long” traders, in fact, will have a reasonable assumption, looking at the fundamentals of the cryptocurrency. For example:

  • Quality of the development team
  • Dollar value and capitalization
  • Partnerships formed by the team

These are all useful indicators that suggest that cryptocurrencies that are marked by the aforementioned criteria will exist for years and therefore must enter the portfolio long-term crypto trader.

Medium-term

The long-term investment horizon required for the type of trade described above is not always liked by everyone, and instead it is preferable to find a middle ground. Medium-term traders will use both fundamental principles and technical analysis to determine which crypto assets to trade. These analytical tools often include:

  • Impulse and Trend Analysis
  • Support and resistance
  • Graphic models

Unlike long-term, medium-term traders will use their trading schedule more often to identify potential trading opportunities. A weekly timeframe is often chosen as a timeframe. They will combine graphical models with technical analysis to determine optimal entry and exit price points. Some also like to use trading bots and signals (such as free crypto signals) when preparing for crypto trading in the market.

Short-term trading

Now, probably the most common style of trading in the cryptocurrency market is the short-term type of crypto trading. Unlike the previous two styles, the short-term trader places much less importance on fundamentals and focuses almost entirely on price action. As a result, short-term crypto traders rely heavily on technical analysis when setting up their trades. They will use technical analysis to identify and trade lucrative opportunities.

However, the short-term option requires a very long time and constant attention to trading schedules. Some traders also often use leverage as a way to maximize their profits, often using leverage up to 100x.

Find the right platform

If you want to trade crypto, you need to register on a cryptocurrency exchange, where you can buy and sell your crypto assets. You can also use these exchanges to convert Bitcoin to other cryptocurrencies. It might be a good idea if you want to make sure. But before considering such tactics, you will need an exchange to execute your trades.

The number of available cryptocurrency exchanges has been growing steadily over the There are many options, although most traders gravitate to only a few of them. Before you decide to use any exchange, make sure you check it properly and read the feedback and reports of existing users.

Most exchanges offer the same basic features. But there’s something special about some of them that singles them out. For example, some exchanges officially support trading bots, which greatly simplifies their use on the platform. Trading bots are commonplace in the traditional stock market. Both individuals and entities, such as hedge funds, use trading bots to automate their operations.

Bitcoin trading bots are exactly the same, except that they trade crypt, instead of stocks. As an example of what we’re talking about, look up Bitcoin Revolution. Bitcoin Revolution is one of the last trading robots on the market. They offer a free demo account that you can use to make sure the bot is right for you, and that any exchanges you use support it.

Explore the technology

If you’re still a relative newcomer to the cryptocurrency world, the first thing you need to do is learn. You don’t need to know all the technical details about how cryptocurrencies work. However, a broad understanding of what cryptocurrencies are and blockchain fundamentals will help you make more informed investment decisions.

At first glance, cryptocurrency trading may look just like trading fiat currency in the Forex market. However, there are many subtleties in crypto-trading that are not immediately apparent. For example, the Forex market is affected by many non-currency factors, such as natural disasters and geopolitical instability.

Just as the value of fiat currencies reflects the economic state of the nation in which they occur, the value of cryptocurrencies is affected by the efficiency of the core business. This effect is the reason that a little bit of knowledge about the technical side of things can be so useful. If you hope to expand your cryptocurrency inventory beyond Bitcoin, you need to be able to evaluate the competition. This extension is difficult to do if you do not fully understand the relationship between blockchain and cryptocurrencies.

Conclusion

We have looked at just a few trading strategies that are used in the market. What’s important is finding a style that suits you best and reliable in terms of being able to deliver market returns. It is also important to note that there is no ideal style, and crypto-traders always change their trading approach depending on what works and what doesn’t.

Cryptocurrency trading involves risk. However, if you lay the groundwork in advance and make sure you know what you’re getting into, you can turn cryptocurrency trading into a source of revenue.

New decentralized IOTA market - image
News

New decentralized IOTA market

As Open Marketplace reports, IOTA with its mission of creating a decentralized market, has recently launched three demonstrations of the ...