Introduction
If you want to trade crypto with minimal losses and make it profitable as part of your daily routine, you need to follow several rules that have actually helped me in my day trading journey.
Firstly, you need to clearly understand what supply and demand are, and how to make trades based on these indicators.
Secondly, pick your own trading strategy to follow. Don't assume that picking strategies from professional traders will always lead to profit; it's not guaranteed. Just because a trading strategy works for someone else doesn't mean it will work for you. I would recommend finding your own strategy.
Trading tactics
Day by day, it is getting harder to make profits on the crypto market. Traders must adapt to new trends and learn new tactics to make trading profitable.
Some traders give you trading strategies and promise you up to an 80–100% winning rate. Others give you tips on how to make money fast, from 10 to 1000 dollars. There is no panacea or one single trading tactic that gives you a high chance to earn money.
There are trading tactics you can use to make a profit. But I want to let you know that it requires lots of practice and understanding. Alright, let's take a look closer:
Breakout
The chart behavior changes when it breaks the support or resistance level and makes a new level to consolidate. On the chart below, there is a clear example of a breakout. It happens because of many factors, but I underline the most important.
Volume: It's crucial when you validate a breakout. The significant increase in volume means higher market interest and can confirm a breakout.
Candle behavior: When the next candle closes above the breakout level and maintains its position, it is a solid sign of a valid breakout. However, you need to pay attention to the candles. If the next candle closes below the previous candle after a breakout, it might indicate a fake breakout.
Another good example of a fake breakout is when the candle closes almost at the same spot where it was started. See the image below.
Sideways
It happens when the price of the assets moves within the same horizontal range. You can use this opportunity to buy at the support level and sell at the resistance level.
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Volume: During sideways trading, the volume should be relatively low and stable. I recommend that you avoid unstable volume trading.
Candle behavior: to validate sideways, look closer to where the candle is closing. If it closes below the resistance level or higher than the support level, it means sideways confirmation. Otherwise, close your trading position to avoid big losses.
Always cut your losses
It's important that if the chart goes beyond support or resistance levels, you set a "Stop Loss". At the same time, set a "Take Profit" as your goal if you clearly see that it's not going to go any further so you can take maximum profits.
Keep an eye on financial news, as you may know, the crypto market is dependent on the stock market and any financial events and crises can affect the crypto market. Political news, wars, and economic conflicts are also significant triggers of any economic crises around the world.
Trade with the same leverage
Never increase your leverage without reason. Trade with leverage that you are comfortable with, and you will be sure your trade is far from liquidation. For newbies, I would recommend trading with x3-x5 leverage, no more.
Take a rest
It's important to stop trading when you feel tired, especially when you have won or lost too much. In those cases, trading becomes like gambling.
Additionally
Never chase high P&L per trade, and never set a daily goal that you cannot achieve. The crypto market is unpredictable and can easily make you mad or disappointed.
Diversify your portfolio by investing in a variety of cryptocurrencies to spread risk and increase potential gains. Use technical analysis to identify trends and price patterns that can inform your trading decisions. Stay patient and avoid making impulsive decisions based on short-term market fluctuations. Finally, continuously educate yourself about the evolving cryptocurrency market to adapt your strategies and maintain profitability.
You may ask me what books to read to become better at trading. But I can say it clearly: there are no books that can master your trading skills. Only practicing your own trading strategies can significantly improve you in this field. There are many crypto platforms that offer demo accounts to trade with play money.
Additionally, the guide stresses the value of hands-on practice over relying solely on books, suggesting the use of demo accounts for skill development.
You can also get free cryptocurrency without any investment or with minimal investment.
