The growth in the Blockchain and cryptocurrency space shows their future potentiality to rise over the other payment technologies. Investing in crypto isn’t that difficult, but then it isn’t that easy either. In order to be a successful trader it is important to have a strategy and follow it till you see the results and repeat if required. After conducting a thorough research we have compiled the top 7 facts to know to 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 a thorough research and then invest in such projects.
Do not loan funds for investing in crypto
Avoid trading in cryptocurrencies with borrowed funds. It is a popular advice in the crypto industry that you invest only what you are 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
Traders and investors trading in crypto including the novice traders need to know like in any business ROI in crypto trading doesn’t come easy. It's important to remember that losing helps your learn, make changes in the strategy and improve your chances for better results. There is never enough research for finding the right strategy, you should keep working at it and try working on new strategies regularly to cope up in every market condition. It is always advisable to apply a calm mindset, identify undervalued tokens, avoid jumping in on market hype and stay away from FUD.
Margin Trading works great for experienced traders
Margin trading aka leverage trading is for the seasoned traders and is sometimes difficult for the beginners to comprehend. The beginners will need to get around this trading style first and accordingly opt for such trading strategies. Considering the risks involved, avoid running after the past performance of a token as that cannot be a true indicator of its value to go up in future.
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. Different traders try different strategies. Take this route: chalk out a couple of strategies, try executing them, and after assessing them go ahead with the one that worked out well.
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.