Here at Europe’s Premier Digital Asset Exchange we actively encourage all of our members to trade wisely, and not put themselves into a position which could cause them issues in the future.
With that in mind, we’ve decided to provide a trading tips series that should set you on the right track as you begin your trading journey.
Even if you’re an experienced trader, there may be a thing or two you could glean from this series, so be sure to read along!
The single most significant factor in your career as a trader will be the market.
Many people get involved in cryptocurrency trading due to the promise of riches that many have claimed to experience in the industry.
One thing you should bear in mind is that this isn’t 2017 anymore. Times have changed, and while there’s still plenty of scope for success as a crypto trader, the chances of seeing the results that some people experienced during that run in 2017 are quite small.
A different approach is required today, and you have to be prepared to adjust in accordance with the way the market moves, which makes it a more difficult task to make money, but it’s not impossible by any stretch.
Trading itself is a risky business, but there will be specific trading opportunities that pop up that carry more of a risk than usual.
Most risky trades are usually best left alone, although there will be times when you see something that would constitute a risk, but that is related to a market you maybe want to be a part of.
The most critical aspect of involving yourself in a risky trade is keeping your finances in check. As with most trades, you should not be risking capital that you can ill afford to lose.
Ask yourself the question “if you take this risk and it fails, can you continue with the loss and not be affected too much?
If the answer is no (and be honest with yourself!), then you should absolutely avoid the trade. Keep your funds in your wallet and live to fight another day. There will be more opportunities down the line, so don’t worry.
There is a much-discussed rule in trading that investors call the “two percent rule.”
This means that you should never look to invest any more than two percent of your budget on any particular trade.
As you gain experience, you’ll know when the situation is right for you to ignore this rule, but as a beginner, you’d do well to stick with it until you become comfortable reading the market.
Something else that is important for any beginner who is entering the world of trading for the first time is setting targets for themselves.
You should have a target amount that you wish to make, and once you hit that target remove it and convert to fiat currency.
You should also have a target on what is an acceptable amount to lose over any period of time, be it daily, weekly or monthly, and do not allow yourself to drop more than that.
Make your targets and stick to them. Stay motivated and disciplined.
Trading large or small?
Depending on the amount of capital you can afford to lose, a large or small trade will mean something different to each person when it comes to a cash amount.
What doesn’t change is the way you should approach both.
A large trade is any trade where a loss would make you feel slightly uncomfortable, and where you consider the risk to be reasonably high.
A smaller trade, although something you’ll still not want to lose, isn’t going to make or break your budget.
Trading smaller is the best way for a novice trader or someone who is new to a particular exchange to get a feel for the process.
Another issue for those who fall into the category of being a large trader is fees.
Many exchanges charge pretty substantial withdrawal fees, but this isn’t an issue with ETERBASE, as our fees are extremely low.
Well, that does it for the first part of our trading guide! We’ll be back next week with some more tips for those who are new to trading!
We’d also like to point out that we offer a FREE trading guide via our website, so be sure to check that out if you want to learn more! It comes packed with lots of hints and tips!