While by no means something super-easy or to be taken lightly, online trading can be learned, when one follows a certain set rules and tips to maximize their opportunities. If you are a newer trader, these five fundamental tips will help you get started as easy as possible, while at the same time prepare you on your journey to become a professional trader.
Set a bankroll
Let us start with the basics – online trading is dynamic and required a starting capital. Be smart here and delegate an amount you are happy to use only for trading and opening positions. This will help you stay within budget with our life expenses – you should sacrifice anything important, as long as you balance things smartly. Once you have set your trading budget, follow this simple rule-of-thumb – use between 1% and 10% of it per trade. This is highly individual, but this range is typically correct. For example, if you are a person who naturally prefers to take smaller risk, use up to 3% of your capital per trade. If you feel confident and have a lower risk-aversion, you may well feel more confident risking up to 8-10% of your trading bankroll. Whatever your case may be, simply set these boundaries and follow them, to guarantee you are aware of your performance as a trader at any time.
Pick your asset
With so many different assets available to trade it is easy to get lost, or even worse – start trading more than you should by picking cryptocurrencies and assets you are not familiar with. These should be avoided in your beginning stage. Simply choose one or a few assets you are interested in continually examine and trade them. This way you will get familiar with price movements, strategies, and basic terminology, which will give you knowledge and confidence. Once you feel secure with your initial assets, you can easily expand your portfolio to something you have been interested in but did not know enough about. Again, this way will help you evolve as a trader in systematic fashion, where you can fix mistakes and learn good practices.
Read the news
You may not have thought so until now, but here politics and news are your friend, so spend time with them. A huge part of the global economy and how prices move is simply down to politics and government decision. If for example a government states it plans to implement a cryptocurrencies technology, that will probably be good for all prices in general, whereas a news story about an earthquake destroying a cryptocurrency facilitate may have another effect on prices. Get the habit of regularly reading the news relevant to you and you will always have a slight edge against traders, who simply did not dedicate time to this.
Do not chase losses
You may have had a bad trading where price movement did not go your way, many people do from time to time. Instead of continuing to trade, while are disappointed, agitated and generally emotionally unstable, simply quit your session. Simply go for a walk and distract yourself with something else – do not get stuck on chasing a loss, as there always will be a next trade to enjoy. Generally, emotions are a bad advisor in trading, so make sure you do not get over yourself after a successful day, but more importantly – do not get angry after a worse one. After all this can reflect on your relationship with close people, which is never a good idea.
Every trader will have their hopes and dreams as a trader and there is nothing wrong with that of course. But one thing many forget is that trading cryptocurrencies online should be fun and exciting. It can get very intense at moments, but a trader should never lose what brought them to the markets in their first place – the search for something fun and exciting, which in the meantime can change a life. Stay focused on your trades and look for opportunities, keep studying hard, but find time to enjoy trading. Whether that be reading a book on trading or taking a slightly riskier position, never forget to look at things with a smile. Eating and exercising regularly are also paramount to have a successful trading career, so do not skip the gym too!