Cryptocurrency Trading - Things I've Learned

I'm writing this because I hope others will learn from my mistakes!  Hopefully by documenting this, it will serve as a reminder to me as well. 

• Never try to jump onto a moving train

It's tempting to buy a coin that just jumped 5 or even 10 percent in a matter of minutes.  You see it going up and up and you don't want to miss out on an opportunity.  What usually happens when I've tried this is I place a buy limit order, at the market price or just above it.  Two seconds later, the price jumps way over my limit order, so I cancel the order and move it higher...Same thing happens again and again.  So I set a limit order quite a bit higher than the market price, in hopes that it gets filled.  Then it does get filled...and the market starts to dump...But its too late, I already bought at the top.

• Trade the charts, do not trade the hype

I've had more profitable trades when I've played the charts, instead of playing the hype.

• Choose entries on fib levels

• Buy into red candles, sell into green candles.

You can make an extra percent or two by buying into a large red candle, especially if the RSI is below 30.  Sell into strength, not fear.  Never sell into a red candle.

• Never revenge trade, take a break.

There have been a few losing trades where I have tried to immediately make that loss back by making another trade. Usually these trades are not very well thought through and involve more emotions that necessary. And always ended in more losses...Take a breather after a losing trade, walk away from screens for a while.

• Be a contrarian.

Don't follow the herd!  When the herd is FOMO, you should think FUD.

• Scale in and out of positions.

I have had great success with buying the dips, on the way up and taking small profits on key Fib levels.

• Try to stay away from low volume coins.

I had one trade that I had a hard time selling because the market volume was so low.  I had to wait almost an hour for the whole order to be filled, and I wanted to use the capitol for another trading opportunity.

• Cut your losses early.  

Trade it, don't mate it.   The price is going down and down...Do I sell, or do I wait to see if it goes back up?  I've been stuck in a losing position that kept going down, but I was convincing myself that it would eventually go back up and break new highs...It's easier to just admit the trade was a loss and move on.  That way your capitol can be put to work in a new opportunity, instead of being locked up and slowing losing value.

• Never margin trade.

Luckily I have never been margin called!  Seriously, I've had a few close calls..  It's nerve racking because if the price goes above or below a certain price, your account could be liquidated. You are playing against time because of loan fees.  The longer your trade goes, the more money you have to pay in lending fees.  Especially after the GDAX Ethereum flash crash, this week....It's just not worth the risk and stress to me.