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What Every Novice Crypto Trader Needs to Know?

HashFlare

Crypto trading… He elevates you to unprecedented peaks close to the sun and farther above and lowers you to the bottom deeper and deeper, when you see bleeding out of your wounded soldier – your crypto-portfolio.

Crypto trading

Today I want to tell you about what I would like to know when I first started trading. This knowledge may shed light on the world of trading cryptocurrencies, and maybe just save you from some things that I have experienced on my own, so you do not step on my rake.

1. What Kind of Trader are You?

What Kind of Trader are You?
What the hell am I doing here?

It’s a matter of introspection. You need to honestly look inside yourself and determine what kind of trader you want to be. Many people fantasize about day traders from the new York stock exchange and the huge amounts they make in an hour. Honestly, day trading is extremely stressful and you can quickly lose your money if you don’t have time to constantly (24 hours a day, 7 days a week) monitor the market and especially if you don’t know how and what to do.

There are three different types of traders:

  1. Day traders (you trade day or night, in General, constantly 24/7).
  2. Swing traders (you trade every 2 to 7 days, sometimes this period may be longer if required by the trend).
  3. The investor (you buy the dips and hold for the long-term trading).

All three types are effective ways to make money, but require different strategies. You can also turn out to be a mixed type of trader.

Personally, I fall into the category of Swing trader and Investor.

It is normal if you do not trade daily. Sometimes the best trading strategy is one you don’t use. Excessive trading is one of the most common mistakes of novice traders. Let the trading find you and it will let you decide which trading is perfect for you. Take your time, feel the trading and let it feel you. I will give a hint: if suddenly you can not answer why you made a certain deal, you can say for sure that you are literally gambling.

2. Market Ppsychology is Extremely Important

Technical analysis (TA) is a very powerful tool that can help you make informed decisions, and know for sure that your decisions are not a product of divination at the coffee grounds.

Market Ppsychology is Extremely Important

Yeah, I can see when the moon is full and you have to sell it.
It should be noted that the SNA (fear, uncertainty, doubt) and loss of profits syndrome are extremely important. Always practice risk management and put stop loss.

Read on cloud mining in HashFlare: That it how to use also the calculator of earnings.

Also understand what an echo chamber is. If you start reading various Telegram channels of incomprehensible communities and run into a “whale” there, it will advise you to buy it, because whales have a personal interest in getting this coin up to collect their cream. I burned when I first started trading using the tips of such people. Then I heard a huge number of people in the group say: “This coin will cost us $ 1!”When you see enough people screaming about it, it reinforces that idea in your brain, and you start to believe it. Loss of profit begins to break out of your chest and you lose control. First of all, it is important to understand how to calculate the real price of the coin. It’s not that difficult. Proceed to the next item.

3. How to Calculate the Real Value of the Coin

So, DigitByte (DGB) is the coin I mentioned in the previous paragraph. I burned it. I was told that by the end of this year it will cost “1 us dollar!”. I didn’t know how this coin price was calculated, or how market capitalization works, and blindly invested all my money at the peak of the market cycle. I paid dearly for it.

How to Calculate the Real Value of the Coin

Look at the price in the screenshot above. This calculation, which is based on the total market capitalization (335 136 847 U.S. dollars), divided by money in circulation (9 882 136 476 DGB). So, it turns out the price that we see above.

This means that in order for 1 DGB to cost $ 1 USD, we will need $ 9,739,480,205 USD of market capitalization. Is it possible for your coins you have chosen? Make sure you fully understand the potential of the coin you decide to invest in and always set realistic expectations.

4. Always Keep an Eye on Twitter, He’s your Best Friend and Worst Enemy at the Same Time

Always Keep an Eye on Twitter
I mean, don’t be upset, it’s the Internet.

Twitter can be a great source of information, at the same time as terrible. Keep in mind that 99.9% of people who post charts on Twitter have placed their buy and sell orders a long time ago and are now trying to influence the market and send it to the desired direction. That guy who calls you to buy a certain coin, is he really honest? Of course not! He has bought everything for a long time and now just trying to disrupt his jackpot, and if he has supporters, he has long informed them, and you just trying to deceive.

Put everything and everyone in doubt. What indicators did this man use to come to this conclusion? Do you know what this indicator is? Ask him. Then everything becomes clear. If he will give you the answer, necessarily analyze this information. Do your own research. Google this topic and read the various investment forums. That’s what I do today. I will not try to teach you how to conduct technical analysis because there are many people who have already prepared this information and lessons better than I can do.

Always do your own analysis. Those guys who just told you the prices are about to go up to the moon; you don’t even know who they are. How long have they been trading? Most traders on Twitter are cartoon avatars. You have no idea who they are. Can you look your friends in the face and say, “I bought this coin because Dodge in the image of Franklin named Potato Bob told me to do so.”

The number of followers a particular user has does not reflect the level of trust or experience.

Dodge Coin
Looks good, but is it possible to trust him.

Ask questions – it’s okay! Most Twitter characters will gladly point you in the right direction or explain their charts and graphs if you ask “how” and “why.” I completely ignore the targeted questions because I’m not a financial Advisor at first and at the end of the day I don’t want to see stickers with torches and pitchforks when I’m wrong. Guess what. I don’t have a 100% successful rating on Twitter and don’t even have a lot of followers. Anyone who claims that no one has made them laugh or doubted them is a liar, and anyone who believes that this will never happen to them is a fool.

5. Basic Tips

Calm. Everything that falls today will necessarily grow tomorrow. If suddenly you miss a certain take – off, it will be the next. Exhale. On the other hand, ask yourself the following questions: is this coin that you bought. and now she is bleeding…is whether her team is legitimate and whether the coin is valid the application? Most likely its price will return to its original position, and maybe even increase, just need to wait it out. There are exceptions, but in General, waiting for the storm – not such a bad strategy. I also started making not bad money by buying “bleeding” coins and storing them until the “happy day”. DOGE was an example of this when I bought it for 15-17 Satoshi and kept it for about 3 months before selling it for more than 100 Satoshi. Permanent pampas will definitely make you nervous and may drain your portfolio. If you have good positioning and good coins in your portfolio you will worry much less.

Usual day on the crypto-exchange.
Usual day on the crypto-exchange.

Owning altcoins is not the same as owning BTC. What is your goal to get more BTC or invest in a specific coin? Remember this always, especially when creating your portfolio. If your goal is to get more BTC, be careful not to become too loyal to certain coins.

Bitcoin is the king. Always keep an eye on BTC. You will quickly lose all your stock, if you thoughtlessly participate in altcoin-parties.

bitcoin take

Keep the coins in their fat purses. Always keep your long-term investments on thick wallets if you are not going to trade them on the stock exchange. Think about how you will feel if suddenly this exchange simply stops working or coins are lost from it?

Use two-factor authentication, not device-based SMS confirmation (for example, Google Authenticator). SMS authentication has already been hacked. At this point, it’s your best defense against attacks on your account. And it hasn’t been hacked yet, but as we know, it’s a matter of time. Always use different passwords for different stock resources. Yes, it can be very uncomfortable, but is it better if you lose your money?

Use bookmarks for the websites of the stock exchanges. Go to the site and bookmark it. Use this instead of searching for them in a search engine. Now a lot of phishing sites that copy the sites of real exchanges and paying advertising, they are in the top of the search query.

6. Never Trade Alone

When you are a lone trader, you have no privilege to ask questions, consult, discuss diagrams and lessons, learn from your mistakes and from each other. Some people have a negative attitude towards paid groups, while others are very happy with the results. If you are going to join a paid group, I strongly recommend that you work with a group that aims to educate its users, not just to provide paid signals. You need to learn how to properly understand these markets and protect your own interests. What are you going to do if this group takes off and closes? In the end, you will always pay one way or another. It makes more sense to pay the group for training than to pay the markets with their mistakes and personal experience.

Find your pack!
Find your pack!

Personally, when I started trading, I was signed up to a paid group to gain new knowledge and develop my own strategy and don’t regret it for a second. I wouldn’t be who I am now without doing it at the time.

Even if you decide not to join the paid educational group, join one of the many free groups, but again, beware of echo cameras and groups designed to create pampas. The paid group usually lowers the level of unnecessary materials and there are more chances to meet more serious traders / investors there.

Conclusion

Hold! It's a wild one!
Hold! It’s a wild one!

Patience plays a key role in cryptocurrency trading. Don’t be afraid to miss out on some deal, as this environment is so rich in opportunities to make money that there is bound to be the next opportunity. Keep in mind that it is very easy to make money in this market, but it is much more difficult to keep your earnings. Any open trade is not necessarily yours. Don’t let greed take over you and slowly sell your violas when prices start rising.

Remember that there will always be another opportunity that you can catch!

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