Trading Bitcoins is fast gaining ground as a lucrative source of income. For the beginning trader, it is quite understandable if they get excited with the prospect of making huge money from digital currencies. However, it is this excitement that can cause the novice trader to make costly trading mistakes. In this article, we shall provide tips to help the novice trader achieve success trading in cryptocurrencies.
Have A Reason Before Entering Each Trades
Start a trade only when you have a reason to get started and have a clear strategy. The cryptocurrency market is a zero-sum game and hence not everyone will gain from it. For those who benefit, there are others who lose on the other side. The market is driven by large whales who are just waiting to pounce on little mistakes of beginners like you. Instead of jumping and rushing into the water, it is better not to earn and do nothing.
Target And Stop When Starting A Trade
For each trade, you should have a clear target for taking profit and a stop-loss level for cutting losses. Robert Janitzek says that there are several factors you should consider when choosing a stop loss level. Falling in love with a trade or the coin itself is a recipe for failure. Crypto trades are a lot more riskier and nobody wants to be one left out.
Meet FOMO (Fear of Missing Out)
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. Well you cannot do anything about it but move forward. While there might be a rise and continuous rising, Robert Peter Janitzek says that you should always keep in mind that whales will just wait for small buyers to sell them the coins they bought in cheaper prices.
To gain profits, you should never look for the peak of the movement. Look for the small profits that will generate a big one. Practice proper risk management. You should never invest more than the small percentage of your portfolio in a non-liquid market.
The underlying asset creates volatile market conditions
The Bitcoin is a volatile asset and this fact should be taken into consideration particularly in the days when the value of the Bitcoin is moving sharply. When engaged in cryptocurrency trading, the relationship between Bitcoin and altcoins is inverse. If the Bitcoin value rises, the Altcoins loses their Bitcoin value, and vice versa.