Trading cryptocurrencies has become a very tough job for retail investors. The market is so volatile that it is nearly impossible to execute trades at your desired price. Though the complexities are very high, the number of cryptocurrency traders is still rising at an exponential rate. The numbers might be rising but the success rate is not that high due to the intense volatility of the market.
So, can we still trade cryptocurrencies and make a decent profit? Well, if you follow some cardinal rules, you should be able to make a regular profit by trading in the crypto market. Let’s see some amazing tips which can help us prosper in the crypto trading business.
Find the trend
In the past, people used to think that cryptocurrencies are in a strong uptrend. But this concept has been changed since some of the cryptocurrencies are going to through deeper correction phase. So, you need to evaluate the existing trend before taking the trades. If you fail to evaluate the existing trend properly, you might end up taking the trades against the existing trend.
To make things easier, you can draw a trend line in the daily chart. If the trend line suggests that the market is in a strong uptrend, look for the long trade setup. On the contrary, if you see that the price is trending downwards, try to short the asset. But remember, the risk factors should be less than 2% of your account balance. There is no assurance that you are going to win just because you are taking the trades with the major trend. Follow a safe approach and trade this market with discipline.
Learn price action trading strategy
Smart traders at Saxo markets always take the trades by evaluating the candlestick patterns. If you execute the trades based on the Japanese candlestick pattern, the overall trade execution process will become much easier. Instead of making things complex, you need to think about the long-term vision. Study the different formations of the Japanese candlestick pattern and systematically execute the trades. If you find this hard, you may use the demo account to develop your basic price action trading skills.
Trade with protective stops
Some novice traders never trade the crypto market with protective stops. They make things overly complex and make things worse. A mental stop is never going to work in the investment business. If you want to keep your funds safe, you must learn to evaluate the market data by analyzing the worst-case scenarios. Always place protective stops in each trade so that you don’t have to lose too much money.
Learn the chart pattern trading strategy
Chart pattern trading is a very effective way to make money in the long run. Smart traders always make rational decisions based on the major chart patterns. Once you learn to evaluate the market data by analyzing the chart pattern, securing the big profits is going to be much easier. Forget about the complex trading method and develop a unique strategy that allows you to trade the major chart patterns. When you look for reliable chart patterns, make sure you focus on the higher timeframe data as it will give you a better picture of this market.
Learn from your mistakes
If you intend to become good at trading, you must learn from your trading mistakes. Without learning from your mistakes, you can’t improve your trading performance. Most rookie traders think they know every bit of the details of this market. But no one can say for sure that can win money from a certain trade. So, maintain a trading journal as it will give you the unique chance to revise your past mistakes. Once you start revising your strategy based on your weakness, you will slowly learn to improve your overall trading process. This will make you a skilled trader in the investment industry.