One should be very cautious while trading in the crypto market as losing your hard-earned Bitcoins can be very upsetting. Here are some of the tips you should keep in mind while trading in Bitcoins and Altcoins.
- Risk Management
The first tip of the trade is to make small profits rather than looking for the peak of the crypto movement. Your small profits will accumulate into big profits eventally.
It is important to manage the risk in your portfolio. You should invest some small percentage of your portfolio into the non-liquid and liquid market. In the case of high-liquid currencies, you should assign a higher degree of tolerance.
- Clear Strategy for entering a trade
You should be very clear about the reason for entering a trade and have a precise strategy towards its trading. The altcoin and Bitcoin market has large whales which drive the market and wait for small traders to make mistakes. So, when small traders like you make a mistake, the large fishes earn profits.
Thus, it is very important to have a strategy and sometimes it is important to study and do nothing, rather than trade and lose money. Thus, there are some days where you earn just by not trading at all.
- FOMO (Fear of Missing Out)
It is important to stay cautious and not go with the trend of FOMO. Since large whales in the market are waiting for the small traders to sell their coins so that they can buy the same which they have brought in cheaper rates.
- Knowing when to Stop
In trading cryptocurrencies, it is very important to know when to stop rather than when to start. One should always set a target and trade with stop-loss for cutting loses.
In the traditional stock exchange, the value varies to maximum10-12 % in daily trading while in crypto trades, sometimes the values goes down by 80-85% within a few hours which can be very disheartening and a lot more riskier. So, one should not let their ego or greed take control, instead one should know when to stop trading and when to exit the trade.