10 tips to get you started trading altcoins!
So you've made a bunch of Steem and now maybe you're thinking about trying your luck trading some altcoins on one of the many cryptocurrency exchanges. Here are ten tips for starting out in the world of altcoin trading.
This is a rewrite from an old blog I had a couple years back. It was actually written when I first started trading cryptocurrency. I changed around a lot of this, and updated it based on my experiences over the last couple years as an altcoin trader. Hope you find this post helpful.
Tip 1) START SMALL ! I can’t stress this enough. I don’t care how confident you are or how much research you’ve done. I don’t care if you’re a seasoned stockbrocker with 20 years experience on Wall Street. Welcome to the volatile world of cryptocurrency trading where markets often change in mere moments. A stable market can be pumped or dumped by one whale and markets rise and fall in minutes and some times even seconds.
Small means different things to different people. A good rule of thumb is, “Never invest more than you can afford to lose”. If you do this and have a win some lose some attitude, you will almost always have a pleasant trading
Tip 2) One thing you can be certain of ,especially when you're first starting out, is that mistakes will be made. Some mistakes will be big, some small, and some extremely stupid. You will or should learn from every mistake you make. This “Go Small” rule also goes for starting out on a new exchange. Get used to the interface and how you interact with your working environment. There’s nothing worse than selling off your positition in a coin, when you wanted to buy more and strenghthen your position or the reverse when you buy more of a loser instead of getting rid of it. These are the type of mistakes that can and often will happen.So if mistakes are going to happen, make sure to learn from them. You should learn from every mistake you make. If something goes wrong, analyze the situtation, figure out what went wrong and learn from the mistake. You can take notes, and keeping a log or journal is a really good idea, but at the very least make a mental note and try not to let it happen again. Mistakes are often the best learning tools.
Tip 3) Keep a journal and don’t focus on your loses, learn from your victories and gains as well. Some trades will work out smoothly and go better than you ever planned or dreamed of. Again, keep a journal, take notes, and at the very least make a mental note of what you did, how you did it, and by all means try and duplicate the results over and over again. Wash, rinse and repeat those successes!
Every trade will be different but results and strategies can often be duplicated over and over. The more you trade the more strategies you will learn,and the easier it gets to start earning satoshi daily as an altcoin trader.
Tip 4) If your new to trading, read and read a lot. Learn the difference between fundamental trading and technical trading. Learn about scalping and momentum trading. Learn the difference between day trading and swing trading.
You can find all this information on stock sites and most of it will pertain to the way cryptocurrency markets work too. The only difference is that things in the cryptocurrency market seem move a lot faster than the stock market. I've found http://www.investopedia.com/ a great source of information.
On top of reading I try to search out information everywhere. I follow a lot of successful traders on youtube, listen to podcasts, and also look for people that post good trading information on social networking sites like G+. twitter, Steemit and other social platforms I'm on. I mean information too, not bogus coin tips from pump and dump schemes. You really want to stay away from that type of information. Which leads me into tip 5.
Tip 5) Do your own due diligence. For those that don’t know, due diligence is an investors term for doing research. You can hang out in troll box’s and chat rooms, and get your info spoon fed to you by some of the brilliant investors and traders on twitter, but nothing beats a little research. Read white papers, find out about the devs, learn everything you can about a coin before you invest. I don’t always take my own advice here, but when I invest in a coin without doing my own research and it tanks, I have only myself to blame. Do your own due diligence.
Tip 6) Have an investment strategy. There’s different strategies for different coins, and different schools of thought when it comes to this topic. This really needs to be the subject of an entire post all its own. For the sake of keeping this post simple and brief decide on a strategy. Here's some examples:
Will you just day trade and sell at the end of the day win lose or draw?
Will you keep the coin long term ,maybe a couple months and sell, win, lose or draw ?
If the coin starts to tank do you sell at a loss and cut your loses or do you stay the course ?
If the coin raises to a certain mark, do you sell or shoot for the moon ?
These are all questions you should ask yourself when you’re ready to finally make the investment in the coin. Once you make the decision stick to the plan!
Tip 7) Find an exchange your comfortable with. Every exchange is different and some are easier to use than others. Chances are you will have to try a couple different exchanges before you find one you really like. You might even want to use a couple different exchanges.
You’ll want to find an exchange that’s easy to use, has coins you like, and has very few technical difficulties like outages, or security issues. This is sometime easier said than done. Again this is something to research, exchanges come and go. Do a little research, find one that you’re comfortable with and don’t leave a lot of altcoins or cash on any one exchange. I spread my altcoins out over mulitple exchanges and never keep a lot of money on any of them. You can find a list of exchanges on my website. I haven't tested every exchange in the list but I often use Bittrex and feel confident and most secure using their site.
Please note, exchanges come and go. NEVER LEAVE LARGE AMOUNTS OF CRYPTO ON ANY ONE EXCHANGE.
It’s a very bad habit and easy way to lose your crypto if something happens to the exchange !
Tip 8) Once you find an exchange you like, learn the interface inside and out. Make note of the buy side and the sell side. Learn the minimum amounts so you don’t get stuck holding 35 coins only to discover you can’t sell them now because it doesn’t meet the minimum sell order amount.
One thing I’ve learned about trading cryptocurrency is that there is a lot to learn. Everyday is a little different and everyday I learn a little something new. I make a lot of trades everyday, and when I was first starting out I could count on making at least one good mistake each day. Almost three years later now, I still occasionally goof up, but over time I've learned from the past and make fewer and fewer mistakes. I still seem to learn something knew almost everyday though. You have to have a live and learn attitude or your mistakes will drive you nuts. More importantly, learn from your mistakes and try not to repeat them.
Tip 9) Watch your attitude and keep your head. You kind of have to have the attitude of a poker player. Win some lose some and don’t trade on tilt. In other words don’t make a bad day worse. If your having a bad day,
stop trading for the day. Some days nothing goes right. Cut your losses and walk away.
The same holds true when your having a good day. Some days you can do no wrong. When things are going right, keep trading. Don’t walk away and keep making that satoshi. When you get tired and can’t see straight anymore, quit for the day.
Tip 10) Lets end this with common sense. Don’t trade when your high, drunk or overly tired. Don’t take advice from strangers, unless you do your own due diligence. If you particapte in a pump make sure you’re not at the top when everyone starts to dump, and the best way to avoid this is to not get involved in such schemes in the first place.
Welcome to the wonderful world of altcoin trading, good luck, happy trading and thanks for reading. May you always buy low and sell high ! If you're just starting out, I hope you found this information helpful and useful.