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Cryptocurrency for Beginners

How to become a successful CryptoTrader : 7 Step Blue Print

2 min read
For example, during a Bull Market like Q4 2020; a Long Trade on Bitcoin is much Less Risky than a Long Trade in XRP as Ripple Labs are facing an SEC’s Lawsuit.

How to be a successful CryptoTrader

But in fact, starting your trading journey with realistic expectations simply provides you with a clearer mindset to pave your trading journey.

There is only 1 way to be a Successful CryptoTrader which is making more money on winning trades than you give away on losing trades.

There is no magical secret recipe on how to be a successful trader, but nevertheless, you definitely need a very well defined strategic approach which will allow you to optimize your resources while finding the best opportunities to capture highly profitable market moves.

 

Step 1 : Define Your Expectations and Make a Plan

Develop a trading plan describing your exact expectations & why you want to trade cryptocurrencies.

Trading Expectations are very important factors that are too often overlooked by traders.

99% of traders fail because they come with unrealistic expectations or simply undefined expectations.

Some ironically, even start trading with the expectation to fail since it’s common knowledge that 99% of traders will fail.

But in fact, starting your trading journey with realistic expectations simply provides you with a clearer mindset to pave your trading journey.

If you are expecting to gain experience over the first 6 Months and learn to take trades the proper way
before starting to scale up at the end of year 1 and grow your account by X % by the end of year 2;

You will have much larger chances of success than the Trader who just quit his day Job expecting to make $1,000 per day with a $10,000 account because he saw influencers on Instagram showing off their rented Lamborghinis.

 

Step 2: Identify a trading style which matches your expectations.

It is important for you to decide whether you wish to be a CryptoTrader or a CryptoInvestor.

Do not confuse the 2 and make sure to properly understand the fundamental differences which can make or break your journey.

Regardless of the one you pick, be sure to stick with your your decision.

It’s a common mistake to see traders suddenly converting to investors when an cryptocurrency is not performing as expected as they get stuck avoiding to take a small loss.

 

Step 3: Identify a trading strategy which matches your trading style.

There are different elements that makes a Trading Strategy and every Trader has his/ her very own trading Strategy.

As you develop along your trading journey you will be exposed to several trading strategies which will look very convincing to you when seeing others do it but in fact may not suit your trading personality at all.

Swing trading, Day Trading, Momentum Scalper, Fundamental Trader, Technical Trading or Counter Trend Trading you chose your strategy and become a specialist if you have to browse among your different trading strategies
before taking a trade you will simply keep missing opportunities or end up applying the wrong strategies to the wrong trades

 

Step 4: Find matching trading patterns & Trends

Identify trading patterns and trends make the most sense to you.

Be realistic and choose only the trends and patterns that you can manage.

 

Step 5: Define your risk/ reward profile

The higher the risks, the higher the reward. However, not everyone has the same risk tolerance.

Define the level of risks that you can comfortably handle.

Too many Traders view every trade equally and Limit their Risk Management Decisions purely based on their Stop Loss price rather than taking into account their trade Size, their portfolio size along with the asset Profile and Market Conditions.

For example, during a Bull Market like Q4 2020; a Long Trade on Bitcoin is much Less Risky than a Long Trade in XRP as Ripple Labs are facing an SEC’sLawsuit.

While Some Traders will tell you not to Risk More than 2%-3% of your Portfolio on a Trade or Asset;

In order to Maximise your Risk : Reward it’s sometimes smart to consider for instance 1% Risk on a High Risk Trade while Increasing your Trading Size for a 3% risk on a more favourable/ Higher Probability
Trade while keeping your Stop Loss at the same levels. (AVOID Using Leverage

 

Step 6: Stick to the plan

Take trades which only matches the 5 steps above.

Very often people start off as an cryptocurrency investor and then decide to trade and unavoidably, this not only throws off their goals but leaves them discouraged.

 

Step 7: Scale

As you identify your best trading style, strategies, patterns & ideal risk/ reward profile so you can now start doing more of what works for you & go bigger.

 

Conclusion:

Once Benjamin Franklin said, “If you fail to plan, you are planning to fail.”

As cliché as may sound, it still holds when talking about Trading Financial or Cryptocurrency Markets.

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