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Simple rules for successful crypto trading

Cryptocurrencies are here to stay. Regardless of whether you think they are cheap or expensive, the right thing to do is analyze things and be ready for the future. It is never easy to predict what will happen in trading, even though it seems like a simple strategy that makes money no matter what happens in the market.

Rules for Crypto Trading

If cryptocurrency was really predictable, you could simply buy the bottom and sell when it hits the top. The best thing is to diversify your investments in most assets with low correlations. The following strategies are prediction-agnostic; they can be applied in bearish or bullish markets to come out ahead either way. There are two classes of strategies in this article:

  1. Short term: This is meant for people who trade or invest in cryptocurrencies with a holding period of months to years
  2. Long-term: This is meant for people who trade or invest in cryptocurrencies with a holding period of decades.

General Rules for Successful Trading

A) Limit losses when things are going south  – Sometimes it seems that the trend is your friend and when things are going south, it’s your enemy. The most important thing in trading is to keep your losses small while letting winners run. A good trade has three components:

  • Entry
  • Stop-loss
  • Target

Successful traders hardly ever violate this rule of keeping their losses small.

B) Be aware of your gut feeling – The world we live in does not follow mathematical laws. There will always be people who do irrational things and stupid mistakes that create different patterns than you can predict with mathematics or science.

However, there is a correlation between the price and what people think about it both short-term and long-term. If you have a gut feeling that something will go south after checking the charts, it probably will.

C) Do your own research – Even the best traders in the world are not right all the time. The market is bigger than you are and you should take that into account when analyzing what other people have to say about crypto trading. There is a high possibility that people will try to influence your decisions and you should not give them that power.

D) Keep an adequate portfolio diversification – The goal of diversification on the BitQT trading platform is to be prepared for anything the market throws at you. History repeats itself and what happened in 2017 with Bitcoin can happen again, yet this time with another coin. That doesn’t mean you should just dump all your money into low-correlated assets, but being aware of the current correlations is necessary for success.

E) Have a clear goal – You have to know where you are heading before entering the market so you can start making decisions on what to do next. This will minimize your losses and maximize your profits.

With these general trading rules, you should be good to go. You can actually make real money when you keep these rules in the play at all times. If at any point you are not sure about a specific action, you should not hesitate to reach out for assistance.

Final Thoughts

Like any other business venture, crypto trading is guided by rules. You have to know what rules are there so you can break them correctly. Making the wrong decisions will cost you money and it is important to find someone who has your best interest in mind at all times. Not much else needs to be said when it comes to making good decisions in crypto trading. We hope the rules we have shared above will make your trading experience worthwhile.

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