How I trade cryptocurrencies

I will explain in this post my method and ideology behind my trading on cryptocurrencies .

Fist of all this isn't an advice to everyone as I am not a professional but people are welcome to use some ideas if they find it useful.
For disclaimer, my only experience of trading is a course I took in financial trading 4 years ago during my marketing degree in France and please, excuse me for grammatical or word choices nonsense as french is my native language.

Also comments are welcome to point on mistakes. It is a good way to learn and exchange viewpoints.

Introduction

Trading can be seen as an elite hobby or bunch of orders made by computers and manipulating the markets. Since the beginning of computers ruling the trading system starting around 2010, I seemed like individual traders couldn't make money anymore doing it.

I first heard about Bitcoin by my financial trading teacher in 2013. He seemed to be really into it and made me want to learn more about it. I got to a point where I wanted to get my own wallet and get a few bitcoins to see what would happen about it a few years later. Unfortunetely I did none at that time. Then I heard about it several times every year but thinking my chance past anyway.
Too bad. The bitcoin is worth around 6500$ today! When I discovered that I was first angry about myself but then wanted to know more about it and this is how I came to hear about other cryptorurrencies and then reopened my account on the Plus 500 trading platform.

This is a screenshot from the software I use, plus 500. Though Kraken is apparently better for cryptocurrencies so I'll have to switch soon.

1) Trust and credibility

The first thing you should be looking for before starting trading on cryptocurrencies is teh concept behind these currencies. In fact some are only speculative and dangerous positions to take as Bitconnect. Their value could highly fluctuate or completely disappear from the markets anytime which is a high risk for an amateur trader.
You should also look at the long term potencial of the currency. It is at your appreciation wether if you find one could become the new international trade currency or not. I fact there are so many small currencies now that the interest and focus can't spread to all.
So my advice is to select 8 to 10 currencies that you think are gonna last and have a good and solid concept behind.
For now my main choices are Bitcoin, Bitcoin Gold, Ethereum, Ripple (controversial one), Litecoin, Monero and Neo
I won't explain here why, first because I still have to learn more about what's behind each of them but also because it isn't the subject of the post.

2) Diversification

The 8 to 10 choices made before aren't for nothing. Actually it is important to invest in a consequent amount of different cryptocurrencies to limit the risks.
This is what I did to avoid loosing everything with one or two wrong orders. In fact with the general increase of values of all these currencies, the probability is low that it is gonna go down. So if you have for example 8 different investments in cryptocurrencies that increased consistently their value during teh last few months, the probability is low that you are going to loose everything.

3) Long and short terms

While trading, many people buy and sell day to day only, which I think is a mistake.
Of course it could be interesting if to sell or buy (if you are in a shorting position) the same day if the market goes in a "crazy" day but people also freak out while they see they are loosing a little bit and decide to sell quickly.
This is why I use 2 approaches on trading:

1. day to day: I use around 1/3 of my total investment money to trade day to day on values that I thik are gonna go up or down in a significant way that day. But if not, I analyse the average progression of the value over the past weeks and months to see if I could still earn in the next days or weeks and hold my position. This avoids selling or buying with a loss too quickly. For currencies you aren't completely feeling safe with, I advise adding a low and high price while you want it to sell or buy automatically. This helps to set a traget gain or limit the loss.
2. Longer term investment: This investment is based on the 8 to 10 currencies I defined previously. This investment is mostly based on trusted values to make greater profits on long term bases. The 2/3 of the investment money are going to be invested and spread on the chosen currencies.

4) Analysing the news and the price curves

Especially before trading day to day, it is very important to be informed of the latest news on cryptocurrencies.
Tensions or divisions on a currency can cause the value to drop in a day as a major hack.
In the opposit, the more we talk about these currencies in a good way, the more the value increases. This is even more true if the news are spread within a large audience as with national news TV channels...

The curves are also interesting to study themselves without thinking about the news. It is interesting to draw lines to get a better view about where it is safer to invest and the global tendency.

This screenshot I found on google is a great example of curve analyse

5) Last tip: empathy

Yes I really wrote empathy. Why? Because trading might be about numbers and company value, but the way that the market prices fluctuate is purely ruled by emotion or was to be more precise.
In fact it is more true for cryptocurrencies because they are based on people having an interest to invest in it rather than only speculation. This is why there is still an interest in tarding these currencies, machines aren't ruling the system.
To come back to human emotions, the more empathy you have, the more you can understand the way individuals are going to act on the market seing the fkuctuatuin of the value.
The last good tip if you want to be competitive, better buy while the price is at a low point. If the currency is strong it should go back up soon, so bad news are good news for smart investers!

This is it and I hope the post has been useful for very beginners. For those who already have more experience I invite you to look at more advanced posts that include more of the analyzing side of trading.