No one comes out of the gate a professional trader. No one. So when it comes to developing a plan and implementing your first trading strategy, you almost have to liken it to prepping for war.
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Imagine that you have all the gadgets, all the maps, and done the reconnaissance. You’re ready and fired up. OORAH, let’s do the damned thing!
Now you’re in and getting ready to face battle and trade for profit except everything you thought was prepped is reality blowing up in real-time circumstances. Your feel good practice runs and aggressive moves in the trade simulator boosted your ego but real money is on the line and the market is not your friend and you’ve been nuked.
Okay, maybe this is a ridiculous war analogy for a crypto trading article, but let’s get to the point.
Successful missions are difficult, if not impossible without a meaningful strategy in place. There has to be plan; and if you’re smart, you have Plan B, C, and D too. As a trader, this action plan is a requirement to be successful, even if the plan includes an exit strategy. Even in war, strategic retreats are necessary because you might have lost the battle, but that doesn’t mean you’ve lost the war.
As a new trader, the learning curve might seem overwhelming despite how much you feel like you’ve prepped. Let’s take a step back and answer the question: “What trading strategy should I begin with?”
Here are a few suggestions.
Don’t drown
I have a memory of my father tossing me into the lake without swimmies and not knowing how to swim. I may have skipped the fear part and gone right to survival mode and started to doggie paddle.
The simple truth is this that at some point, you’re diving into the deep end with trading because you have to start somewhere. Part of your strategy is determining how aggressive you want to be, how much you’re willing to (or can afford to) lose, celebrate small wins to build your confidence, and have an exit strategy if trades aren’t going your way.
That swimming example I gave came with a few lessons: I was very angry and frustrated with my father in the beginning, but I didn’t panic. I had a life saver who would pull me to safety if I was really in trouble. I learned how to swim that day, and I didn’t die.
Don’t get angry and frustrated when bad trades happen because that will prompt revenge trading or send you into panic mode. Having a solid exit strategy based on real numbers will save your portfolio in the long run. Congratulations, you’re learning to trade with the big boys and it didn’t kill you.
Prelude to the trade
The prelude to trading is knowing which market you wish to trade in, and that requires some solid research. Don’t listen to the shillers and propaganda. With over 3,000 cryptocurrencies to choose from, it’s important to find the projects that have good market outlooks, history, and in line with your developing trade strategy.
Is that crypto something you want to day trade or HODL long-term?
What exchange are you using, and have you compared trading volume, transaction costs, and their security features?
Cut through the noise and get down to facts so you can make smart, impartial decisions about the tokens you want to invest and trade in. Certainly, the crypto markets are volatile but there are tokens that have stable blockchains, community and developer support, and decent historical data to search for repeating cycles and market trends. Some cryptocurrencies to seriously look into include Bitcoin, Ethereum, Binance, and Ripple, but don’t take my word for it. Empower yourself and do your own research!
Baby steps
When it comes to feeding infants, it’s suggested that you introduce one food at a time for X amount of days to make sure baby doesn’t have any allergic reactions. Then introduce another food, and another one until they’ve got a good diet and vast selection of food they can eat. So too should you indoctrinate yourself into trading, not just in picking a cryptocurrency to trade, but also your trading style.
Again, this goes back to developing your strategy.
Have you picked out an exchange you’re comfortable with?
Have you chosen a few tokens to invest in?
Have you done a risk assessment on those tokens?
If you answered yes, and started trading with favorable outcomes – GREAT!
But if you find that your trades are failing, don’t throw the baby out with the bathwater. Adjust your trades by introducing new limits, double check your charts, and be diligent in the process.
Little by little you will become a master of trading and your hard work should pay off. Once you’ve built that confidence, then take the next step of expanding into a broader portfolio or new exchange. It’s okay to push the boundaries as long as you know when to pull back.
Be impartial
It’s great to be the master of your portfolio but never fall in love with a cryptocurrency so much that you lose sight of the realities. When you fall in love with a crypto asset, it’s very easy to chase that market value up or become emotionally vested. You know where that often leaves you? Answer: Holding the bag with a broken heart and a lighter wallet.
The market doesn’t care about your feelings. It is cold, impartial, and disinterested in you, but the market will feed on those who make emotional decisions. Don’t be that person. Be cool and calculated in how you approach the market beast.
As you gain more experience, only you will be able to determine what works and what doesn’t. Whatever your motivation for diving into the cryptocurrency trade market, remember that it’s war.
Disclaimer
Content provided by CryptoTraderNews is for informational purposes only, and should not be construed as legal, tax, investment, financial, or other advice. All information is of a general nature. As always, there is risk with any investment. In exchange for using our products and services, you agree not to hold CryptoTraderNews Pro, its affiliates, or any third party service provider liable for any possible claim for damages arising from decisions you make based on information made available to you through our services.
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