Guide to Successfully Trade Crypto (Short Term)
Cryptocurrency is becoming more and more popular as Bitcoin rises in value and it is attracting new investors from different levels of experience. If you're new to the space then it's likely you will be buying coins after ICO's and wont be privy to private sales along with the DeFi portion of crypto, which is literally a whole other world.
Since I've started trading Crypto I've had a huge learning curve, with thanks to my team who has gotten me up to speed on this space.
Trading Crypto is not like the traditional assets most of us are used to trading. To be profitable day trading, a few helpful tips I've realized are:
2. Dont fall in love with the projects, you're in it for the money, not the tech. While there will be many uses for the Cryptocurrency you trade, falling in love with a coin because of its use can put you in trouble, because you're more inclined to hold during huge drawdowns, which will put a strain on your margin if you're margin trading, and the opportunity cost of trading a coin with more volume if you're spot trading.
3. Whatever you do, dont FOMO in. Because of the insane volatility of these coins, it can seem like the only place they can go is up. But let me tell you...from experience, it's always best to wait for a more logical and safe reaction when you see a huge 4H candle still pumping. Coins with huge volume will usually have a slow pullback and continuation. Also, if you buy in with a large enough order, you'll just be providing liquidity for sellers and the bots WILL eat you alive.
4. Learn to confidently trade using price action. Using price action will be your best option when trading cryptocurrency in the short term. Because of the rapid movements, traditional indicators like oscillators and moving averages which normally lag, will be of even less help in this market. Some patterns I've found useful that are very easy to spot are triangle patterns and breaking and retesting of an ATH.
5. Do some research. Learn about different tokens and their uses and news specific to your coin. Even you'll be trading short term, learning about the coins you trade can give you great insight to what may happen in the near future. For example, Chilliz $CHZ is a sports related NFT more specifically tied to soccer/football. I am quite familiar with the football industry and see how Chilliz has been implemented in very large clubs; I also know how radical football fans are for their favorite clubs and can see Chilliz growing much more in the longer term as it is utilized by more teams. By me knowing this, instead of exiting a trade, I may be inclined to leave some profit and let it run....dependent on the price action ofcourse.
6. Pay attention to Bitcoin. Most Alt Coins are heavily correlated with BTC and will follow bitcoin and some even suffer a multiplied affect. Meaning that if BTC drops 3% then an ALT Coin may drop 11%. This is the tricky part of trading Alts and its best to expose yourself a wide variety of coins so you know which ones react less (KSM for example).
7. Take your profits. Like any market, it's always best to take your profits, there is nothing wrong with it. There has been countless times I've been up and was greedy and decided not to take any profits and had to sit through a huge drawdown. This is a rapid market, and as quick as price goes up, it will come back down, and you may not have the volume to get back up to your entry until a few days later, which is brutal to sit through.
There is much more that can be said, but for right now, I think this guide will help anyone new to trading Crypto and will help the learning curve. Overall, I think Cryptocurrency is still in its early stages and there is way more to be exploited in terms of trading, staking, farming, De-fi and investing.
If you got this far, thanks for reading! This is also my 100th post so leave a like and/or comment and let me hear your thoughts!
Since I've started trading Crypto I've had a huge learning curve, with thanks to my team who has gotten me up to speed on this space.
Trading Crypto is not like the traditional assets most of us are used to trading. To be profitable day trading, a few helpful tips I've realized are:
2. Dont fall in love with the projects, you're in it for the money, not the tech. While there will be many uses for the Cryptocurrency you trade, falling in love with a coin because of its use can put you in trouble, because you're more inclined to hold during huge drawdowns, which will put a strain on your margin if you're margin trading, and the opportunity cost of trading a coin with more volume if you're spot trading.
3. Whatever you do, dont FOMO in. Because of the insane volatility of these coins, it can seem like the only place they can go is up. But let me tell you...from experience, it's always best to wait for a more logical and safe reaction when you see a huge 4H candle still pumping. Coins with huge volume will usually have a slow pullback and continuation. Also, if you buy in with a large enough order, you'll just be providing liquidity for sellers and the bots WILL eat you alive.
4. Learn to confidently trade using price action. Using price action will be your best option when trading cryptocurrency in the short term. Because of the rapid movements, traditional indicators like oscillators and moving averages which normally lag, will be of even less help in this market. Some patterns I've found useful that are very easy to spot are triangle patterns and breaking and retesting of an ATH.
5. Do some research. Learn about different tokens and their uses and news specific to your coin. Even you'll be trading short term, learning about the coins you trade can give you great insight to what may happen in the near future. For example, Chilliz $CHZ is a sports related NFT more specifically tied to soccer/football. I am quite familiar with the football industry and see how Chilliz has been implemented in very large clubs; I also know how radical football fans are for their favorite clubs and can see Chilliz growing much more in the longer term as it is utilized by more teams. By me knowing this, instead of exiting a trade, I may be inclined to leave some profit and let it run....dependent on the price action ofcourse.
6. Pay attention to Bitcoin. Most Alt Coins are heavily correlated with BTC and will follow bitcoin and some even suffer a multiplied affect. Meaning that if BTC drops 3% then an ALT Coin may drop 11%. This is the tricky part of trading Alts and its best to expose yourself a wide variety of coins so you know which ones react less (KSM for example).
7. Take your profits. Like any market, it's always best to take your profits, there is nothing wrong with it. There has been countless times I've been up and was greedy and decided not to take any profits and had to sit through a huge drawdown. This is a rapid market, and as quick as price goes up, it will come back down, and you may not have the volume to get back up to your entry until a few days later, which is brutal to sit through.
There is much more that can be said, but for right now, I think this guide will help anyone new to trading Crypto and will help the learning curve. Overall, I think Cryptocurrency is still in its early stages and there is way more to be exploited in terms of trading, staking, farming, De-fi and investing.
If you got this far, thanks for reading! This is also my 100th post so leave a like and/or comment and let me hear your thoughts!
These analyses are my personal view on the market.
Always assume my investment risk tolerance is higher than yours
I’m here to make money, not hold your hand. Never blindly trust any analysis you see online because it fits your bias (including mine).
Always assume my investment risk tolerance is higher than yours
I’m here to make money, not hold your hand. Never blindly trust any analysis you see online because it fits your bias (including mine).
Believe it or not, if you want to research a coin then just look it up on Twitter. Follow the project accounts so you can stay updated on developments and also so that you can see if the top influencers are shilling it.
There are also very useful bots on twitter such as whale trackers, volume bots and ATH bots, which are all good tools you can use to refine your trading to specific coins and follow the money.