TRADING CRYPTOCURRENCY 12 GOLDEN RULES

On how to trade cryptocurrencies, there are a lot of books, quick guides, and advice available. But gaining experience is the only way to succeed. The 12 guiding principles for cryptocurrency traders are listed below.

TRADING CRYPTOCURRENCY 12 GOLDEN RULES

The 12 guiding:

1. There is never a win-win circumstance.
2. A "war" is waged in cryptocurrency trading.
3. 50 plus 1.
4. Unfortunately, having faith is crucial.
5. You're in error
6. The trading 80/20 rule.
7. Beginners lose money in cryptocurrency trading because...
8. Invest your money in what you know.
9. Cryptocurrencies' differences from other marketplaces
10. quickly making 100 poor trades
11. Technical analysis (TA) should be minimized.
12. Your friend is DCA (Dollar Cost Average), not emotions.

These 12 golden guidelines were developed after being taken from innumerable trading books, which were then examined. Let's examine them more closely.

There is never a win-win circumstance.

Consider a playground swing. Two kids sway back and forth. Either one child is at the top and the other is at the bottom, or both children are balancing in the middle while under a lot of pressure. This is exactly how trading in cryptocurrencies operates. Sometimes nothing happens, and under intense pressure, prices balance in the middle. However, every time one cryptocurrency trader gets money, another trader loses money. On neither side can the swing rise. It's just basic physics. Why do you believe that you are superior to your opponent is the query.

Trading cryptocurrency is "war."

This is referred to as "fog of war" in state-versus-state organized combat. The commander can only see what is in front of him; he cannot see the full battlefield. He is compelled to make choices based on unreliable information. The same situation occurs while exchanging cryptocurrencies. Some traders always choose the asymmetrical side. There are "whales," who own so many cryptocurrencies that they have a significant impact on trading prices. But only the whale is aware of when it will engage in trading. Even cryptocurrency trading bots occasionally make mistakes. Typically, we discover a message's impact on price increases too late, true or false. Those that have trustworthy information before everyone else gain in trading.

50 plus 1.

Another flip. The price can only be in one of two states: up or down. It's a two-sided argument. There is exactly a 50% chance that the monkey will be accurate if we let him trade. Nobody is ever entirely correct. There is no technique that can predict an illogical and frequently manipulative market with absolute accuracy. Any trader with prior expertise trading cryptocurrencies should aim to be correct at least 51% of the time. Every trader should be willing to lose money on 49 out of every 100 transactions.

Unfortunately, having faith is crucial.

No matter how mathematical the system is, we are hampered by our believe in magic. For instance, the value of the currency is surging to incredible heights. Despite the fact that it's typically too late to enter, we still do it out of FOMO (fear of missing out). Or we detect trends when none exist. For this, there is a separate area of study in psychology: prejudice. Conclusion: No one is sensible. It is erroneous, in my experience with bitcoin trading, to believe that people behave logically in the market.

You are an error.

Always correct is the market. You are mistaken if the market behaves differently than you anticipated. forever and ever.

The trading 80/20 rule.

Successful cryptocurrency traders profit on 20% of their trades. The other two are either losses or draws. A bad deal can result in an average loss of 4% if a good trade generates a profit of 16%. This ratio can be attained by implementing a stop-loss. As a result, you can also determine whether you are earning a profit. You'll also observe that a deal with a 3% profit margin is not truly a success.

Beginners lose when trading cryptocurrencies because they: -Placed excessive bets

-Are worried about financial loss

-Trade blindly, which is like to playing the lottery

-Invest when prices are high and lose money when they decline

-Remain in place for too long.

Trade affordable coins

-Gambling with another person's funds

-Never take their prizes in cash.

-Trade too frequently, which results in poor trades.

Invest in what you are knowledgeable about.

Get informed prior to purchasing a coin suggested by bitcoin trading bots. How do they behave? Do you understand it? Or at least is it comprehensible? Long-term price increases are more likely to occur with superior products. I've learned from my bitcoin trading experience to avoid trading the wrong currencies.

Cryptocurrencies' differences from other marketplaces -The cryptocurrency markets are open round-the-clock and never sleep. Euphoria and depression cycle lengths are X times shorter. Trading cryptocurrencies happens quite quickly. When the stock market "sags," it may stop for several weeks or months. The coming week in cryptocurrencies will be unique.

-Volatility, or price swings, of 30% every day is nearly the norm, and swings of up to 100% (like Ether's 2017 flash crash) are not out of the question. That requires guts to do. For instance, mainstream media moves too slowly for cryptocurrency. By the time the author posts the story on his website and claims that Bitcoin is down 30%, the situation will already have changed.

Stock traders consider %. Cryptocurrency traders that have experience think in X (as an increase or drop by X times).

-Illegal actions, like insider trading, take place everywhere. However, they are more prevalent and their effects are more substantial in the unregulated bitcoin industry. The information advantage is much more beneficial in the world of cryptocurrencies. Cryptocurrency trading bots become an important resource for information at this point.

- Herd instincts. Because there are many individuals conducting analysis and the market is small, technical price analysis can be effective in the bitcoin arena. The forecasts come true if numerous traders base their trading decisions on the same outcomes.

-Investing in a currency with a lower market capitalization can occasionally be preferable because of its increased likelihood of ranking in the top 50. For instance, two interesting projects in the top 50 cryptocurrencies with smaller market capitalizations are Elrond EGLD and Terra LUNA.

Make 100 transactions that fail soon.

Having actual experience with bitcoin trading is the only way to raise your chances of success. It won't help you to read books. You won't benefit from trading with play money either. Only actual trading with actual money can result in experience, comprehension, and success (if any). Begin modestly. Commence with 100 euros. Add another 200 euros once they have doubled. Repeat the procedure after the 400 euros have doubled. Deal only with sums that won't give you the willies. It's not good for business to be tense.

Technical analysis (TA) should be minimized.

Acquire a working knowledge of the following terms: breakouts, bevels, rising and falling channels, bullish flags, stochastic RSI, trend lines, and basic candlestick ideas. TAs can be formed based on daily, hourly, or minute values, and you can "zoom in" on them. The model is increasingly error-prone the shorter the time scale. Don't waste time searching for things that will be impossible to find in hours.

Your friend is the DCA (Dollar Cost Average), not emotions.

During a winning streak or, alternatively, a losing streak, it's all too simple to become melancholy. The end outcome in both situations is almost always the same: poor trades that result in losses.

When it comes to the three golden laws of #2, #3, and #6, discipline and emotionless focus are essential to become a good crypto trader, just like a World Championship Boxing fighter who put in a lot of work to become the athlete he is.

Even the best trading method will cause you to lose money until you understand it. You could attempt regularly investing little sums of money in the market. Invest $100 each month if your $500 investment objective is to be met.

In other words, it's time to stop playing the game and "regroup" if you've lost three trades in a row. On the other hand, if you have a string of victories, resist the urge to get overconfident as this will inevitably result in failure.

So keep your feelings to yourself, be cautious, and be humble. At the conclusion of each trading session, they will always be there to greet you.