Cryptocurrency trading is a potentially very high-yield activity. At this time, a lot of traders have already achieved significant success in this niche. Someone even started to train people, posting their achievements on various sites on the Internet, interviews on TV and on YouTube video blogs.
Accordingly, all those who consume this content get a good boost of motivation to start trading cryptocurrencies. After all, in theory, this sounds very interesting. You need to analyze charts every day, watch news about the world of digital currencies, sell / buy various cryptomonets. In general, working as a trader, you need to be immersed in this field of activity every day. And then a person will have the opportunity to earn a lot of money on cryptocurrency in a short period of time. At least, that’s what many people think.
Tip 1. Don’t trade on signals
Signals in cryptocurrency trading are a very popular topic today. In almost every social network, messenger and online sites, you can find ads or a community that talks about secret VIP signals that allow you to earn from 300 to 2000% in one evening. You can very easily see for yourself by entering the corresponding query in the Google search engine.
Tip 2. Analyze and think ahead
Most of the novice investors and traders in the cryptocurrency market are a solid herd that acts according to the laws of the majority. These are also called hamsters.
When there is bad news about the world of digital currencies (and this happens quite often), when an influential person expressed some negative speech about Bitcoin, then hamsters on such a negative wave immediately run to sell their cryptomonets, fixing most often huge losses. They explain their actions by saying that they only want to keep the rest of their savings and do not want to lose all their investments.
All this, of course, leads to a Panic Sell and exposes the market to a terrible correction before the first positive news about the world of digital currencies. Then everything returns to normal and the growth trend begins. And these moments of the fall/rise of the coin rate, the trader must definitely use to extract their benefits.
Cryptocurrency trading requires a different mindset from the herd mindset. Otherwise, it will be fraught with negative consequences. Any competent trader should think only in advance, assessing the situation on the crypto market, which will be in the near future. For example, there was the news that Bitcoin is a bubble and a pyramid. What will be the reaction of people? What will happen to the Bitcoin exchange rate for the next day?
News of cryptocurrencies, which most often affect the growth/fall of the market, should be evaluated from the point of view of a large mass of inexperienced traders — hamsters who want quick profit and succumb to the behavior of the crowd. By analyzing their actions and predicting the behavior of tomorrow’s market, it will be possible to predict the corresponding fall or growth of the rate of cryptomonets. This is where you need to make profitable deals, selling / buying coins at more favorable prices. Move with the whales, not with the hamsters — this is how cryptocurrency trading works.
In general, analyzing news, people’s behavior and the trend of the cryptocurrency market is the main skill of a successful trader. Only by predicting the likely future, you can learn to earn a lot of money in this field of activity.
Tip 3. Correct psychology
This has been mentioned more than once in various articles and video reviews. The trader absolutely in any scenario needs to remain calm, maintaining a cold mind, iron nerves and sound logic. This seems to be clear and obvious to everyone, but few people can do it in practice.
In May 2018, a psychological support service for traders was opened in Sweden. Trading cryptocurrencies often causes psychosis and nervous system disorders, especially when the market suffers a correction, and your losses begin to go off scale. But even in this case, you need to be calm, otherwise you can sell all your assets in a hurry, fixing a loss for which you will never pay again. And the career of a trader will be closed for you forever. Emotions when trading cryptocurrencies are not the best helpers that will help you make the right decision and earn a lot of money. It is necessary, on the contrary, to suppress them as much as possible, connecting brains and logic.
In general, we invest only free funds, mentally part with them, turn off emotions and connect our brains with logic. This will allow you to become a more successful trader in this type of earnings on cryptocurrency.