Tips for successful trading
Let’s take a look at the five most common mistakes new traders make and how to avoid them:
- Do not invest more than you can afford to loss
Any financial investment can produce losses, rather than returns. With a highly speculative investment, such as Bitcoin, there is a high chance that you can see very large gains or losses. By trading Bitcoin, there is also further scope to lose money from poor decision-making.
One should invest such an amount that they feel comfortable with losing completely — be prepared for the worst eventuality. This tends to lead to losing more money when the market recovers and the trader buys back at a higher price.
- Set goals for each trade
Setting goals helps traders remain level-headed during periods of extreme volatility. This is highly important for Bitcoin trading. When placing a trade, determine what price to take profits or cut losses in advance.
The benefit of this is that it is easier to prevent trading decisions based purely on emotions. For example, a trader with no target price may make a profitable trade, become greedy, and then fail to realize their profits while the market is still on their side.
- Learn how to read charts and indicators
Although technical analysis is a difficult skill to develop, new traders at a minimum should know the basics of chart reading to identify market trends.
- Do not set stop losses too low
A stop loss is an automatic trigger to liquidate your position if your losses reach a certain value — essentially stopping you from losing any more. They are a good tool to take advantage of.
- Close unprofitable & leveraged positions within 24 hours
Leverage is borrowing or lending an asset in hope that it appreciates or depreciates, respectively.
If a trader shorted 1 Bitcoin at 5:1 leverage, for example, the total investment is 6 Bitcoin. To make a profit the price must fall, allowing the owner to reclaim ownership at a lower price.
However, the price of a Bitcoin must fall sufficiently to cover the trading fee and the interest fee charged on borrowing the 5 Bitcoin. Do not fear if this sounds complicated!
Put simply, we recommend that inexperienced traders close unprofitable positions within 24 hours to avoid paying re-occurring interest.
Summary
The key takeaways from this post are:
- Do not invest more than you can afford to lose
- Set goals and target prices for each trade
- Learn how to read charts
- Do not set stop losses under $20
- Do not keep unprofitable positions open for longer than 24 hours
реrfесtly!
Vеry intеrеsting
Vеry intеrеsting
Also studying technical analysis and price action should help too, lol.
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Interesting thoughts
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