Cryptocurrency Trading Tips & Mistakes to Avoid | Unicoin DCX
Thursday June 06, 2019,
7 min Read
Many traders who are trading massively in cryptocurrencies like bitcoin and buy ethereum, and such traders are trading to win always but winning in cryptocurrency can happen once they have adequate knowledge about the technicality of trading and risk management. When it comes to trading with leverage, the traders have to rethink their plan to trade crypto coins. As we know that cryptocurrency is highly volatile, we should consider the following cryptocurrency trading tips:
Crypto Trading Tips
Invest before you know the risk
There are always risk associated with cryptocurrency trading despite being well-versed with it. Therefore, you must calculate the percentage of risk and how much that can impact the capital negatively. Also, if the risk is well-calculated and you have agreed positively to bear, then such traders may go for this kind of trading.
Put your investment in different coins
Warren Buffet had once quoted - “don’t put all your eggs in one basket”, and that’s very true to the cryptocurrency market. Hence, you should invest in different coins and avoid investing in only one coin to avoid high risk.
Every trade cannot guarantee a profit
As cryptocurrency is more or less similar to other CFDs like forex or commodity, there are chances of loss also, and no one can promise to be profitable in every trade.
Avoid fear and greed factors
Fear and greed are two emotional factors which need to be eliminated in every way possible since these two are responsible for bad trades. However, it is not possible to eliminate these factors.
Trade with a plan only
“Failing to plan is planning to fail” is the famous saying that is applied for the crypto trading market as well. You should implement a proper, precise plan step by step for getting a good result while trading crypto coins.
Use the risk mitigation tools TP/SL
There is risk mitigation system in every platform where you can lock your risk as well as profit. If you are only buying crypto coins, then you have the option to wait, or you may use for your purpose, but if you are trading for speculation, then you must have price entry and exit points in the calculation. By following this, it helps you to recover and retain in the trading business.
Follow the proven strategies
There are numerous strategies, and every strategy may not give the expected result. Therefore, you need to select few which fits your investment capability and test it in a demo console or simulation. Once the strategy is proven, you may think of implementing it in the live trading account.
Despite the trading tips mentioned, traders may still commit mistakes, but a trader can reduce it day by day. Here are a few common mistakes and their correction measures.
Gather related information
You need to gain information related to Bitcoin’s trading mechanism as well as volatility. Once you gather the required information, you can have better decision making ideas. Bitcoin is different from the primeval kind of derivative tradings like currency pairs and commodities.
Judge your investment with Bitcoin
To trade in Bitcoin, you may incur a significant amount of fund as an investment; in case of the adverse market scenario, you need to know your investment capability, holding period and loss capability thus you don’t have any significant impact in your daily life. Think before investing as any profit/loss you could afford without deteriorating your social or financial life. Furthermore, you need to invest very less in the starting to know the overall functionality and to get accustomed in reality.
Choose a reliable cryptocurrency trading platform
There are so many fake and fraud companies who are offering Bitcoin platform to attract newbies. So you need to find a reliable cryptocurrency trading platform to trade. You need to be very conscious to choose the cryptocurrency exchange which is registered under the company act of those countries as well as licensed by a government authority to carry out the business. You can check online about their legitimacy offers, platforms, and other services, among other platforms.
Analyze security measures
Security is the chief concern in the crypto world when you talk about buying or selling any Bitcoin or Altcoin. Factors like hacking and phishing may happen any time in the crypto world, that can cause substantial loss to your invested money ultimately. So it is crucial to take care of the security in the cryptocurrency trading platform and wallets. Your private key is essential to transfer or to use the crypto coins for your purpose.
Get all fees details
Before investing in Bitcoin, you should find all the charges that are applicable for getting services like buying, selling, transferring, withdrawing, depositing, and spread so that you can calculate the overall loss incurring in transaction per lot or per coin. You should try for lesser service charge or transaction cost and also in compromising with good exchange’s services.
Learn analysis for entry and exit
Analysis for the entry and exit is the last but vital part for new Bitcoin traders because the market volatility is very high as compared to the other market. Therefore, you need to learn technical analysis, fundamental analysis, and also risk management, so that your investment may not be affected by any wrong decisions that you make. Technical analysis tells the entry-exit point, whereas fundamental analysis updates the reason for price movement. Risk management is required to mitigate the risk arising in the trading session.
Above discussed points might be helpful for the new Bitcoin investors for taking a rational decision and timed decision, so that you may get good returns on the expected capital. As this is a matter of investment and return, there must be a precaution, and in-depth preparations are required to assure positive return in the form of assets or crypto. Ultimately, investors have to be updated with the crypto world, especially Bitcoin and other Altcoins.
Common Mistakes to Avoid
Unrealistic profit expectation
Unrealistic profit expectation is the common problem for novice traders as they are speculating huge profits without financial calculation with proper tested strategy.
There are always risks in such type of trading as the market price is not centric to any party because the market forces allocate it. Most of the traders do not have calculative risk and strategies to control.
Untested trading plan
Most of the times, few traders fall trapped with lucrative trading schemes, which leads them to massive loss ultimately. Thus, you should be aware of the trading plan you choose, before implementing in the live account.
There are some news flashes in the market, which is not real, and traders get trapped while taking entry or exit from the trade.
A better mentor always generates a better result. However, if our reference or broker is not well equipped for the trading, then it may incur losses for you. Therefore, you must refer valid and genuine links only. Cryptocurrency trading needs to be carried out with great care as it may give excellent result and adversely, it may bring massive loss as well. Therefore, you need extensive research and analysis before placing any order in cryptocurrencies. Moreover, such type of trading concerns high security also. Thus, the thematic content of this blog generates trading tips along with assisting in eluding the general faults.
Unicoin DCX is a secure platform which makes easy for you to buy cryptocurrency, sell, and store the cryptocurrency and buy Bitcoin, buy Ethereum, and more.