Trading is a demanding and stressful career. You have to gain control of your emotions and give all of your attention and focus to the task at hand in order to perform well. When you combine such demands with the wild volatility of the cryptocurrency markets, you begin to see why crypto trading is just about the craziest job you can have.
Yet, for all of its craziness, it is quite rewarding when done well. In what other financial markets can an asset gain 1,000 percent of its starting value in a matter of a couple of months? In what other market can an asset lose 90 percent of its value in a matter of a few hours? It is in this market that millionaires are minted at the fastest rates, and so are paupers. To be the former, rather than the latter, you should know a few things about the market and trading in general that will kick-start your journey to success.
The fear of missing out (FOMO) is one of the ailments that have led many a trader to massive trading losses. It isn’t fun, to be sure, to see a coin go up and gain double-digit percentage points in value while you’re just seated there, watching.
The scenario goes a little like this: you see a great big green candle on the coin that indicates it is undergoing massive buying activity. This candle is greener than any other you have ever seen. You can almost smell the $100 bills of profit you would have gained if you had only caught the green candle at its inception. It is almost literally talking to you, innocently and yet accusingly asking you why the hell you aren’t holding it. Why are you the only one on the entire market who hasn’t got a piece of this action?
It is around this time that you begin to notice a lot of people flooding crypto forums to talk about how this coin is getting pumped. Everywhere you look, everyone seems to prophesy that this coin is going to the moon.
So what do you do? You keep doing your thing and shrug the FOMO off. Of course, there is a possibility that this coin will, indeed, go to the moon and even beyond maybe. There are people on those forums who got it ahead of the rest and are now riding the rise to greater heights. But, always remember that there are also whales in the market, and they are most likely the ones that bought this coin at a way cheaper price.
Now, they’re just lying in wait, giving the little fish time to buy the coins as they sell the coins to them. As the prices continue to rise, soon it will only be the small traders holding the coin at very high prices. All it takes is one huge dump and a bright red candle that goes through the entire order book for people to panic sell. Be thankful that you weren’t caught out because of your FOMO. You did stay out, didn’t you?
The Importance Of Risk Management
Risk management is all about how much you bet on a single trade. Just like with gambling, you never bet the farm. Many traders are constantly looking for that one trade where they put all their money and get millions in return. I am here to tell you authoritatively that that moment does not exist. Even if it does, the chances of you getting it are probably slimmer than the chances of you getting hit twice by lightning in the same spot.
To be profitable as a trader, you should never look for one big move or even the peak of a move to make a profit. Instead, take small profits as you ride the move, and they will accumulate into a large profit.
You should also invest a small percentage of your portfolio in a market that isn’t very liquid and, therefore, high risk in nature. That’s because you will need a wider stop loss and target profit levels.
Numerous traders have woken up to the advantage of trading bots like Bitcoin Code and others. A trading bot is a massive improvement over your own trading as an irrational human being. It is faster than you, has no emotions, and will trade 24 hours a day since it doesn’t get tired and doesn’t need to sleep. Read as many online reviews as you can before you pick the right trading bot for you, and risk a little bit of your money as you start testing it out. Once you get the swing of things, you can make a steady passive income with a trading bot.
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