What beginner traders need to know: 12 basic rules of cryptocurrency trading

What beginner traders need to know: 12 basic rules of cryptocurrency trading

Image of a laptop on the background of stock charts


How to make cryptocurrency profitable on the exchange?  How to reduce trading risks and increase the profitability of operations?  How to learn to navigate the trading rules and principles?  The purpose of this short material is to tell you what is worth and what exactly should NOT be done for a newbie trader.



Use only free assets


Are you determined to conquer the digital asset market and are you ready to confirm this decision with a large investment?  It's a great idea, but your main savings can literally evaporate at the first unsuccessful operation.  How can you avoid this?  Everything is very simple - trade only free funds, on which your well-being and psychological health does not depend.



Diversification is our everything


Store your income across multiple assets, multiple bank accounts and crypto wallets.  What for?  The fact is that both experienced and novice traders, in fact, are not insured against objective trading risks, and if Bitcoin collapses, then Ether, or any other altcoin, can stay afloat and one day compensate for your loss.



No margin trading


Margin trading is, in the long term, very profitable trading in assets borrowed from the exchange or broker itself.  However, the attendant risks can literally leave a trader with empty pockets.  Therefore, it is better for beginners to forget about this type of work on the exchange for at least the first six months of training.



Theory and practice are ineffective separately


Can you recite the laws of a trader by heart, but have never traded on your own?  Then this knowledge is just as effective in cryptocurrency trading as it is in construction, electronics or any other business that has nothing to do with trading.  And vice versa: practice without theory is a personal story of money wasted.

The key to success is a step-by-step study of all the nuances of trading with the consolidation of the knowledge gained in practice.



Strategy first, then trading


Since random but successful cryptocurrency trading in one or two transactions is unlikely to help build a promising strategy, it is still better to create a strategy first, and only then try to trade.  Study the experience of successful traders.  Fortunately, there is a lot of this information on the Internet.



Reducing risks


Read the news daily, analyze the charts of currency pairs and use the tools and indicators that literally every cryptocurrency exchange or trading platform is equipped with.  This will help reduce trading risks, and if not predict, then at least predict the movement of the rates of the assets you are interested in.



No “High Hopes”


You've already earned a 3% profit by selling bitcoin, but if you wait a little longer, will you increase your income to 5%?  Don't even think about it.  The cryptocurrency environment is very changeable, and instead of “high hopes” it is worth arming yourself with well-developed tactics of behavior and discipline.



Choose only verified assets


The basic principles of cryptocurrency trading are built on examples of relatively stable and controlled assets.  Choose only those coins about which you can find confirmed and consistent information.  As a rule, these are the TOP 10 coins from any rating system such as CoinGecko or CoinMarketCap.



Do not store profits in questionable wallets


This is useful both from a practical and psychological point of view.  First, by withdrawing money from an exchange wallet and sending it to an unverified service, you automatically become a potential victim of hackers.  Secondly, you will not be able to use funds quickly when you want to lead a very profitable and urgent trade.  Moreover, losses on commissions for transfers are also losses.  Your wallet on our exchange is very well protected.  Use it without fear.



Trade daily


So how do you get started trading bitcoin?  The answer to this question is very simple - only daily practice can qualitatively change the statistics of your transactions.  And only with daily practice will you be able to build your successful trading strategy.



Learn from successful traders


This does not mean that you will never repeat other people's mistakes, but learning from experienced traders will help you better understand how the exchange activity works from the inside.



Accelerate reaction on short trade


Not immediately, but over time, you will understand the value of short transactions.  They have a positive effect on the development of mindfulness and speed of decision-making, which, in fact, are fundamental traits of a good trader.


Published 04 Nov 2020