Essentials To Crypto Trading

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28 Mar 2024

A Sleepless Market
Unlike any other market, Crypto trades 24/7 and is an amazing market to trade due to its inherent volatility. The forex markets are open 24 hours a day but are closed over weekends, which unfortunately doesn’t help much. I remember when I first began trading Crypto, I was blown away by the fact that I could literally trade whenever I wanted.
Due to being tremendously busy throughout the day, being able to trade late at night was a perfect fit. This is where my love for trading Crypto was born. There are obviously also downsides to a market that never sleeps. The first is sleep deprivation… I kid you not. I was often up many a night, as late as 3 am.
I know a lot of Crypto enthusiasts eventually take up “trading” once they begin to see the percentage moves that are taking place. However, many soon return to investing and hodling over the long term. For many, the DCA approach is best, as it requires zero understanding of market dynamics.
It’s simply a case of allocating a predefined amount every week, month, or whatever the desired interval. Trading requires a lot of “study” and dedication. It can also be extremely challenging at times. Although trading is a lot more than a few principles, here are three key aspects to master if you are looking to trade.
Know Your Market
This is imperative, a keen understanding of your market and its inherent behaviors gives you an “insider’s edge”. This grows and deepens over time. This is primarily why I trade Crypto. I am now in my 8th year of Crypto, and so have managed to garner a lot of knowledge over the years. This helps tremendously, in regard to my trading, and ensures that I choose Crypto over any other market.
Having a relatively good understanding of the market you are trading also creates a level of confidence. There is nothing worse than entering a trade if confidence is lacking. Knowledge and understanding, in regard to “your market” makes a huge difference. Don’t underestimate how beneficial it can be to the efficiency of your trading.
Technical Analysis
TA is at the core of trading, no matter what anyone tells you. Those who refute technical analysis, generally, tend not to be traders. Pay a visit to any trader worth his salt and you will discover that his trading ideas are largely governed by TA. I rely heavily upon TA and charting when it comes to setting up a trade.
This is also an element of trading that is extremely vast. There is much to learn, and truthfully, one never stops learning and improving. It’s like anything, many years of practice will eventually result in skill and success. As the well-known quote from Malcolm Gladwell goes:

It takes ten thousand hours to truly master anything. Time spent leads to experience; experience leads to proficiency; and the more proficient you are the more valuable you’ll be.

Risk Management
This particular aspect of trading comes down to a few very important aspects. How a trader chooses to deploy capital is of significant importance, and is perhaps one of the most overlooked aspects of trading. Smart deployment of capital is able to turn an average trade into a roaring success. Another very important practice is correctly determining and making use of an effective stop-loss.
I recently addressed the use of stop-losses in greater detail via the following post: “A Tiny Trading Adjustment That Has Enormous Implications”. Another important aspect of risk management is to have a predefined exit strategy. Choosing not to close a winning trade based on greed can even see a winning trade becoming a losing trade. Having a predefined exit point eliminates the temptation of holding out for “more”. Strict disciplines and adherence to the data are imperative for success.
Final Thoughts
Making use of the abovementioned practices will lay a solid foundation upon which to build. Every trader develops their own set of rules. However, a good strategy will incorporate these three key aspects. All the best! Until next time!

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Disclaimer
First of all, I am not a financial advisor. All information provided on this website is strictly my own opinion and not financial advice. I do make use of affiliate links. Purchasing or interacting with any third-party company could result in me receiving a commission. In some instances, utilizing an affiliate link can also result in a bonus or discount.
This article was first published on Sapphire Crypto.