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You don’t need to graduate from some of the most prestigious business schools in order to invest in cryptocurrency. It is possible that you have asked this same question many times: what’s the purpose of digital money? There are some things that you must keep in mind to make yourself a successful crypto trader. Let us share eight things you should remember to follow the same.
1. Be aware of where you can trade
A purchase at a it appears to be priced reasonably low without a specific plan of entry is investing, not trading. Be aware of the reasons you think a cryptocurrency is going to increase in value and the reason it won’t disappear in the future. Remember that hundreds of Altcoins compete with one against each other. Some of them are based on very similar, or even the same concepts. The odds are that very few are likely to survive in the long run. Making investments in a way that you don’t know IF the investment will be successful, and HOW the market will go upwards is not a good way to invest.
2. The relationship between risk and Reward
Successful traders of crypto should be aware of the relationship between risk and rewards. Risk management is the measurement of the volatility and likelihood that negative outcomes could occur when trading. Returns and risk are inextricably linked, and anyone who succeeds in trading is not afraid of the risk. If you are successful, you will receive a higher reward when you’ve been more cautious.
3.News and Community Tension
It is important for crypto traders to keep tabs on discussions in the community and the news since this information can affect the market value of cryptocurrencies . Information and rumors affect the marketplace and may lead to profitable trading opportunities. Staying active in the Blockchain group, as well as staying updated with current information about the Blockchain industry, is the way successful traders use the power of information.
4. Self-Control
The traders who trade in cryptocurrency must be aware of their feelings, especially anxiety and fear. A successful crypto trader is able to manage their emotions. Fear and greed can cause a person to lose his or her judgment. They can take the wrong decision. The most successful traders know how to manage their emotions and remain true to the trading plan they have developed.
5. Trade with no pressure
Make sure you do not trade until you are in the optimal circumstances. You must be able to make informed actions and determine when to stop trading (trading strategy). Stress can be detrimental to your ability to trade. Do not rush. Instead, sit and wait for the next opportunity, you’ll get there.
Prepare for unexpected events
Cryptocurrency markets will be turbulent, and this is something that cannot be overlooked. Cryptocurrency investors know about the massive price swings that you do not see in conventional markets. If you mentally prepare for these unforeseen, but often spectacular, performance in investment, the intelligent crypto capitalist can act with a rational mind instead of being emotionally affected when there are sudden value decreases.
7.The 80/20 rule in trading
The most successful traders earn their money with 20% of their transactions. Everything else is tie-ups or losses. If a good trade brings an average profit of 16%, then a bad one can result in an average loss of 4%. It is possible to determine this relationship through the stop loss. You can calculate your net profits this way. This will show that a trading profit of 3% is not really winning.