With the growth in the Blockchain and cryptocurrency space, it is easy to say that most investors and traders are getting conned by the wrong projects and are losing funds to projects that are never going live. In order to be a successful trader, it is important to have a strategy and follow it until you see the results and iterate and repeat if required. After conducting thorough research we have compiled the top 7 facts to know if you plan to make profits and succeed in crypto trading.
Build a diversified portfolio
Beginners put all their eggs in one basket, while a professional would know what to do exactly. The smarter approach is to build a diversified portfolio based on market cap, tech and team behind the project. This decreases the risk of incurring losses.
Review your portfolio and trading strategy every 60 days
It is easy to chart your progress and see which way your portfolio is moving. As traders follow their strategy, it is advisable to keep an eye on Bitcoin price and its market capitalization. As Bitcoin’s price increases, its market capitalization increases and this leads to a fall in altcoin prices. This means it’s time to hold or exchange for Bitcoin.
Don’t participate in lending programs with inadequate information
While there are lucrative lending programs in the market offering as much as 8% interest pa on lending your cryptocurrencies, it is recommended that you conduct thorough research and then invest in such projects.
Do not loan funds for investing in crypto
It’s always a bad bet to borrow and trade in crypto. It is popular advice in the crypto industry that one invests only what one is prepared to lose. This means taking loans from sharks or banks, is not advisable as you are risking your borrowed capital in a volatile market with no guaranteed returns.
Losses are a part of the process
Every crypto trader including the whales have lost money and it isn’t the easiest thing to always book profits. It’s important to remember that losing helps you learn, change strategy and improve it for better results and profitability the next time. There is never enough research for finding the right strategy and it doesn’t guarantee profits in every market condition. It is advisable to apply a calm mindset, identify undervalued tokens, avoid jumping in on market hype and stay away from FUD.
Margin Trading is not the only way to win
Leveraged trading is for seasoned traders and it is not the go-to trading style for beginners or relatively new traders. Avoid trading on too much leverage as in the margin, your profits multiply and so do your losses. Past performance of a token is never a true indicator and there are several cryptocurrencies with more risks involved than others.
Keep Trading
Simple as it sounds, it is the most important step to becoming a successful crypto trader. Top traders make at least 100 trades every 3 days and that helps them keep realigning their strategy to suit market conditions and book profits consistently. Anything less than 100 trades would not be considered enough data to devise a strategy, let alone monitor its performance.
These are the top tips for becoming a successful trader, other important ones include learning from the trades where you incur losses, staying updated on market conditions and industry news and identifying the right project and team to invest in. Stay on top of the market and keep learning as you trade.
