If you have been out skiing on the Bitcoin piste this year the chart shows it's been a steady downhill run since it peaked at $US16,228 on 01 Jan 2018 and down to $4,021 on 17th Dec. This means for many the hopes of great profits have been left as powdered snow in their wake.
A recent article in Medium by writer Koinfox listed "10 things to watch out for in the Crypto Trading business". Here is a summary of those 10 things to watch for.
1. The crypto-news cycle: Experts have labeled the crypto market as a ‘speculative market.’ This is true because news easily sways the market. Staying up-to-date with crypto news is extremely valuable to any trader wishing to make better trade decisions.
2. Buying the Rumour: “Buy the rumour, sell the news” is a well-known advice in the crypto space, The fact is that by the time major news sites get hold of “hot crypto gist,” the experienced traders have already started pulling out of the market.
3. Keep your eyes on Bitcoin: Evidence has proven that when BTC price experiences a drastic pump, the price of altcoin will go down drastically too, this is because traders are exiting altcoins and trying to cash in on the BTC pump. So, monitoring Bitcoin is an excellent way to be aware of market sentiment.
4. Avoid getting hooked to one coin: When researching on viable coins, it is easy for an inexperienced trader to get emotionally attached to a particular crypto and thus channel all resources in this direction.Experienced traders always look at the bigger picture by diversifying their portfolios and increasing their chances of making more money.
5. Avoid trading under pressure: Manipulating the crypto market is done using shills, FOMO, fake news and pump scams.Before trading, ensure you have done your own research on the crypto; make sure you take responsibility for your trades so that you aren’t trading under the pressure of FOMO or fake news.(FOMO ; fear of missing out)
6. Your profit targets: Before jumping on any trade, it is vital to know where you are heading. Profit targets help give you clarity on what your goal is for each trade. It will help to divorce emotions from your trading and keep your eyes on the price.
7. Keeping greed in check: Greed is inherent in every trader, but keeping it in check separates successful traders from mediocre onesDiscipline is a trader’s best friend.
8. Implementing proper risk management: Effective risk management in trading is a culmination of practices that will help you mitigate your losses. Understand where your risks are and what your trading limits are in terms of losses etc.
9. Choosing the right exchange: Crypto trading is done on exchanges. But that doesn’t mean every exchange is good for you. You have to make some research to find the right exchange that is congruent with your requirements.You may have to experiment a little, but most importantly, you must do your research so that you’re working with an exchange that will be profitable for you in the long run.
10. Your chat analysis game: Crypto trading isn’t as simple as buying when the price is low and selling when it goes up. A lot of other skills are needed to help make the best out of a trade. One of such skills is chat analysis which requires you to understand chat concepts like trend lines, moving averages, support, and resistance, trading volume, etc. Identifying trends is crucial in making profits from trades; however, this isn’t so easy when it comes to the crypto markets due to its volatility. The good news is that several websites offer tools you can use to help identify and take advantage of trends.
In conclusion Koinfox has this to say: "Becoming a professional crypto trader takes time, patience, practice and discipline. The trick is to keep at it and update your knowledge consistently. After all, practice makes perfect!"
So let's hope that 2019 is less about downhill skiing and more about a stead climb up the alps !!
Read the full extract at https://medium.com/@koinfox/10-things-to-watch-out-for-in-the-crypto-trading-business-4b0a1a3c7cd3.