Answering the question: what are your suggestions on trading cryptocurrency?

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Adriaan Admin

Administrator
Staff member
Jan 30, 2018
231
56
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www.bitcoinforbeginners.io
#1
Many beginners ask this question, as in many cases they have heard that a lot of money can be made from trading in cryptocurrencies. Now although it is not impossible to acquire the skills to become a profitable crypto trader, if you don't acquire those necessary skills first and you start blindly trading without knowing what you are doing: more likely than not you will lose a LOT of money very quickly!! So here some additional recommendations to start with (not intended to be exhaustive):

when you are new to cryptocurrency assets AND new to trading, this should be the additional steps to be taken: I would definitely suggest to inform yourself thoroughly about the fundamentals, developments and ongoing news in crypto space so you better understand the assets that you might be trading. Additionally start learning all basics related to trading in general, exchange orders technicals, chart reading, chart/candlestick patterns, technical analysis, most important indicators, different trading and investing strategies. If you have done all that, start applying what you have learned by analyzing fundamentals of the assets and their charts and if you then feel comfortable in identifying trade opportunities, perform those trades with real money, but start out with small amounts of what you can afford to lose, because you probably will lose money in your initial trades in this learning and practicing process. however the emotion that comes with trading real money AND losing it due to your mistakes plus learning why you lost in those cases, is essential to develop your trading skill and potentially become profitable after a long learning curve. When you start doing your own trades: keep track of every trade in a profits and losses sheet where you also make comments on every trade what went good, what went bad and why.

What I personally find a great way to practice and develop traders "stomach" and discipline is to start practicing the "portfolio re-balancing strategy": buy and hold a small (can afford to lose) portfolio of blue chip coins (the coins as listed on GDAX) + cash balance. Decide beforehand which percentage of each coin will be in the portfolio and how much the cash balance will be. Now on a weekly basis calculate the value of each balance and buy or sell each coin as necessary to restore the original percentages. This means you will need to sell part of funds after coins have risen in value and buy more funds when anything or all has fallen in price, meaning you are forced to act contrarian to the market sentiment. This way you can train yourself how to follow a preset strategy and stick to your own rules with discipline and make trades eventhough they go against your basic emotions (euphoria when prices go up, fear when prices go down), but you'll execute anyway regardless. This is technically a rather simple strategy that anyone can understand and follow, while you are studying the more sophisticated skills.

Other tips:
- Read recommended books
- Follow a professional quality course
- Try to find a professional trader to be a personal mentor and/or mirror with more experienced peers (for example our FB traders group Trading for Beginners)

All these recommendations are just my 2 cents/satoshis though, but I hope it is helpful or insightful for anyone reading.