Common crypto trading mistakes
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I guess a lot of traders have made a significant amount of profit from the current bull run trends, as more altcoins/coins have been making a new all-time high these few days.
It's a common fact as some will be bagging more cash and adding more coins to their listed asset portfolio, it's also quite a different story for other traders who will be missing out and making more losses from the bull run.
It can also be seen in a few seconds or minutes of market liquidity will affect trading profit especially those traders that got carried away with high market expectation without setting out stop loss on a trading position.
Some common trading mistakes will be highlighted here which can be of little help to avoid unnecessary loss of funds.
Note This article is base on my personal trading experience and some carried out research made me, so it shouldn't be taken as any financial advice make sure you make your basic research on any market investment before entering with real capital.
- Entering the market without a well-defined plan.
Before starting my trading journey I spent several months trying to figure out how some stuff works in the trading industry, for a new trader, just entering the market he will need to get himself acquainted with some interesting trading charts and terminologies.
Every day is a new opportunity to learn something new while trading you tend to figure out some of your flaws and try adjusting.
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Well defined plan can be in this term long or short-term trading here a trader needs to define what type of trading market they will be dealing with.
Day trading which is the short-term type of trading will be base on a day or few hours this type of trading the trader needs not to open a position for long terms like a week or month.
That been said the long-term trading can involve opening and holding positions for weeks both types of trading have their shortcoming it's left for you as a trader to choose which best suits your trading plans.
II. Exit strategy
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This an important trading psychological strategy even myself I fail sometimes to apply the exit strategy, I barely exit the market most especially when the market seems kind of unfavorable.
Since I day trade which is short-term trading, there is a prior need for traders to always set out when they are meant to exit any position know what amounts of profit you would be taken before making a proper exit from the market.
Having a proper exit strategy will help minimize the risk of losing unforeseen market movement these include setting stop 🚫 loss on any opened position.
III. miscellaneous
A. Trading book order
Using the order book when trading helps traders to know from any particular exchange who are dominating the market.
Here is an example of a trading order book from my KuCoin exchange trading platform.
The order book shows the buy and sells market position that is been opened by various traders with the order book cell walls a trader can easily figure out who is dominating the market either the buyers or sellers.
Always remember trading requires much practice and a well-defined strategy do well to make enough research before venturing with real capital.
Comment or suggestions are very much welcome thanks for stopping by.
Originally Posted by me here
Hi @mccoy02
I am convinced that trading is not for everyone. Because carrying some entry or exit plans, tolerating the emotional burden of the market, is not easy.
But you have brought some important points.
Setting a maximum loss per trade or per day is also necessary..not to risk all your capital in one trade, is another very important thing too.
Thanks for stopping by and sharing your thoughts really appreciate your feedback.
I agree with you it's not advisable to use all capital in one trade
I recently talked to a friend who told me that he did it, he used all his capital in a few transactions, and he was a first time trader, I thought, wow, he got lucky, because it was a very risky move. But, I think it was beginner's luck.
The chances of winning or losing are in every trade we make, especially in Cryptos, where the market is so volatile. But, for those of us who like adrenaline, this is really for us.
Hello @mccoy02
You mention very important points for operations, one of the great difficulties that arise is to achieve the proper dominance and control to do so.
I agree with you when you say:
"... that trade requires a lot of practice and a well-defined strategy, so you should do enough research before venturing into real capital"
Thank you for sharing this information.
Regards.
Thanks for the feedback @janettyanez im glad the post was very helpful.
Most people just rush to the market trading because they are told they can make it big without not even doing proper research of the market they want to enter into. And also many people can't control their emotions whenever they start trading
That's a very big one there entering the market because they think they can make quick cash but proper planning is always required..
Thanks for sharing @mandate
This is quite some helpful tips which I will definitely apply. The exit strategy is very important and also knowing how much profit you are looking and how much you are willing to incur is a very cool plan.
Thanks for sharing such an educative article with us @mccoy02
Hi @menoski thanks for sharing your thoughts and finding this post useful its always very important to have proper exit strategy.