1. Stay Informed
On top of basic knowledge and strategies, traders always need to follow closely the latest news on cryptocurrencies and events, which affect their prices, including economic outlooks, growth projections and interest rate decisions.
This all comes down to preparing yourself for these dynamic markets. Make a list of the digital currencies you are interested in trading and do your best to stay informed on them. Business news and financial websites can also be a great source of information.
2. Allocate a Budget
This is one of the most important aspects of becoming a successful trader – assess how much financial capital are you willing to delegate to trading. As a rule of thumb, this amount can be anywhere between 1% and 5% per trade of your total capital. Following this rule, if you have a $10,000 trading account, then make sure you only put up between $100 and $500 per trade positions.
Moreover, feel free to set aside an additional amount you are willing to dedicate to trading, when and if an opportunity arises – this is not mandatory, but rather an additional capital buffer.
3. Set Aside Time, Too
Trading involves significant time and, more importantly, your full attention. You need to remember this is exciting, but you should treat it professionally. Please make sure you designate enough time throughout the day to stay on top of market movements.
If you do not do this, you shouldn’t be expecting much as a trader. This is because trading opportunities can occur at any time, but also disappear just as quickly, as prices fluctuate intensely.
4. Start Small
Starting out as a trader, your first task should be to optimize your risk and this means beginning with a small amount of trading capital initially. The easiest way to do this is by focusing on only one or two cryptocurrencies during your trading sessions.
Make sure you select some of the more popular digital currencies, which are already established and while still volatile, do not change prices as quickly as some of the newer ones.
5. Be a Realist and Stay Cool
You don’t have to and never will win all of your trades. It is best to get to grips with this fact as soon as possible rather than later. That does not mean you cannot be successful, but rather that a degree of realism will help you on your trading journey immensely. Simply follow your set of guidelines and approach each trading opportunity with a clear mind, not thinking about past results.
Whenever you go on a bad streak with a few losing trades, simply take some time away to refresh and restart. As a trader you must learn to keep greed, hope, and fear away from trading sessions and replace them with a dedicated, analytical approach and market logic.
6. Follow your Plan
Successful traders have to react quickly to market price movements, but they do not always have to think fast. You are probably wondering why is that so? The obvious reason is that they have developed a trading strategy in advance, which along with discipline allows them to follow their plan. This is important so you stay focused regardless of the results. Don’t let your emotions get the best of you and abandon your strategy.