Crypto Trading: may seem simple, but successful trading is not at all easy.
7 tips for those who want to do crypto trading:Article in collaboration with BigBit.
First of all, it is not worth relying solely on one’s own intuition: it can be one of the worst mistakes because it is a complex market and it is extremely difficult to understand it unless one is already fully immersed in it.
Here are some tips you should follow to get started.
The so-called order book is the list of purchase or sale orders already uploaded to the trading platform, waiting to be executed.
Market value is the price at which the last trade was executed, with bid orders that have a purchase price that is still below market value and ask orders that have a higher price.
Analysis of the graphs, but also of the news
The main cryptocurrencies have the largest volume traded in US dollars. Therefore, the analysis of the graphs should be carried out comparing the change in value with respect to both bitcoin and dollars.
News is also central to crypto trading: the so-called news trading is a key element because some news can change market sentiment, especially in the short term. For this reason, it is always necessary to be informed and to know how to select the news of great impact that often involves the big players of the sector, such as SEC, Coinbase, ETF of various kinds, regulation, etc. …
At the same time, news trading only is highly discouraged as it sometimes exposes the trader to movements that are decidedly volatile, and therefore difficult to manage, especially to those who are inexperienced or invest in a sector with often low liquidity, like cryptocurrencies.
A mandatory rule in trading is that you should never rely on emotions. So-called emotional trading can do great damage: anger, fear, stress (and even too much confidence) are never feelings to be followed, especially in the crypto industry where volatility is very high. Trading psychology is a key element to dominate emotions. The chances of making imprudent decisions in situations of high stress are very high.
If it goes down it is not said that it will go up
Buying very low-value coins or cryptocurrencies that have devalued against bitcoin isn’t always a good deal, there are no guarantees in this market.
Time is money
One week in the cryptocurrency market is equivalent to three months on traditional markets. Working in this area means not only working on it every day but also doing so hour after hour. This implies that it is absolutely necessary to calculate well the amount of time that you are realistically able to invest in this activity.
Sometimes it is necessary to limit oneself to long-term investments, rather than working on a daily basis, precisely because of a lack of time. Moreover, operating on a daily basis does not necessarily mean buying and selling on a daily basis, but following the trend of the markets on a daily basis.
We must always remember that the time we invest has at least a marginal cost, and therefore a price.
If you decide to go into this business on a daily basis, it is best to start with “small doses” and assess your performance before increasing your investments.
Cryptocurrencies also offer the opportunity to trade even with very low amounts, because there are no significant minimum shares to invest, and because sometimes you can generate significant earnings even without being forced to invest large amounts.
Finally, it is almost always better to rely on the advice of those who understand trading so to avoid making mistakes.