Tried, tested, and true, these 5 rules for bitcoin trading will have even the newest investors looking like pros.
Brass tacks- most of the best crypto advice is born from one single seed of wisdom- know your market. Understanding bitcoin, the technology behind it, how it works, why it works, these are all valuable nuggets of knowhow that the best, most talented, and richest traders live by. They are the people who can explain the inner workings of hash algorithms without batting an eye. The same people who understand how looking at the performance of altcoins could reasonably give you a glimpse into the future of bitcoin. The people who, would never, ever, give you this kind of advice for free.
Becoming a savvy bitcoin trader isn’t necessarily difficult. It’s not something that’s relegated to the elite. Which is why bitcoin trading is such an enticing market for those of us who reside well outside of Wall Street. The people’s investment, if you will. You don’t have to be a tech genius to be bitcoin successful, but it does require a lot of work, research, and an exchange platform, like Bitvavo, that’s geared towards enhancing a novice’s performance. Another thing that helps the newbie to the field are following these four pieces of unchanging advice.
Know Why You’re Trading
So many of these tips are common to the point of becoming cliché, but like so many other tired statements, there’s a reason they stick around and that you keep hearing them. This particular advice isn’t just ideal for the crypto market, but one that holds true throughout any number of investment environments. Always have a solid reason as to why you’re trading, or why you’re even looking to make a trade. There are instances in which nebulous reasons, such as political unrest or newfound volatility in altcoins, can give a decent “frivolous” trading defense. But for the most part always be aware of why you’re making any given trade.
Don’t HODL All the Time
Specifically, in the bitcoin community, you’ll constantly be bombarded with tales of HODL and how it made someone millions. While it is a good idea, understand that it’s not a hard and fast rule. You shouldn’t be playing the HODL game at all times if you’re hoping to make any discernible gains. Likewise, it’s unwise to reinvest or pull out your entire stash regularly. Keep a close eye on the market itself and get familiar with how bitcoin tends to behave relative to other factors. HODL if you’re unsure, but don’t be afraid to dive in and play with the whales once in a while.
Have a Plan
That’s it. Have a plan. Realistically consider the marketplace with a cool head. I really before you’ve even begun to invest. Know what you’d be happy making. Understand what you’d be comfortable losing. Consider your price points. What’s low enough to buy? What marks high enough to sell? Figure out these boundaries and parameters before your money is on the line. That way, when faced with FOMO, greed, or out and out confusion, you’ll know exactly where to go and when to trade.
Give FOMO a Swerve
The other common and revered four letter acronym of bitcoin: FOMO. The feeling you get as you watch price go up and up and up, or farther down than Exxon’s favorite drill- that little voice that pops into your head and says “you better get in on this.” Don’t listen, stick to your plan, know why you’re trading. Stay away from standard talk boxes like twitter and reddit at these times. Hold tight onto your new found trading confidence. You’ve got this.
Pigs Get Fat, Hogs Get Slaughtered
Perhaps one of the most ubiquitously useful colloquialisms, this above all is something to live by. It also just happens to dovetail perfectly into several other of the divine four trading tips. You will never, never sell at the absolute top, and likewise, you will never buy at rock bottom. When you’re making a plan, make sure to completely check your ego. This saying is in stark juxtaposition to FOMO, the extreme other side of the bell curve. Stick to your plan and don’t let your optimism get in your way.