1. Understand Reality
Take time to step back and have a good look at what the current state world is in from a political and economic perspective. Try not to get the information from the mainstream, do your own research and come to an unbiased conclusion. Visit the local shopping, are people buying or are they saving?
Always remember the market is forward-looking. Most of what you are seeing is already priced in. Think deeply about what the next 3-6 months ahead are going to be like for the macroeconomic environment and risk-on asset classes.
2. Step Back
The market will always be around tomorrow. Don't feel compelled to trade every day just because the crypto market is open 7-days a week to trade the market or else you just become a gambler and not a trader. This is one of the hardest lessons to get into your trading mind when you are at a less advanced stage.
One great fix for this is to limit the number of trades you are going to take each month. This simple method stops you from trading every day. Let's face it there is probably no good reason to trade every single day unless you trade every single asset class.
3. Trade When Required
Only take a trade when you feel certain that all market conditions align, such as fundamentals, technicals, and on-chain analysis.
Having confidence in your trades and your own ability takes time, and a big part of finding this ability is actually trade selection and only involving yourself in the best possible risk versus reward trades.
One way to achieve this is to become a better analyst. The more time and effort you put into your research and analysis the better trader you will become.
4. Risk Reward
Unless you are a HODLER it is really not worth taking small risk-reward trades.
Look for big risk-reward trades where you make at least three to four times what you are risking allowing you to still be 50 percent wrong, and still make money.
As you look to identify only the best risk-reward trades it will not only make you more profitable in the long run but it will also help you become a better trader.
5. No Moving Stop Losses
Unless you HODL then using stop losses is always best. This allows you to manage your risk, which let's face is the only thing you can control in trade except for taking a profit. Better to become a master at taking Stop Losses when needed, than letting them run away from you and destroying your account balance.
One great tip for making sure you set to your stops automating the trades 100% for both the take profit and the stop loss and religiously not touching either during a trade. If you have analyzed the trade previously then there should be no good reason for you to touch your stop loss.
6. You Need Capital
The reality is in crypto and any trading endeavor you do need a decent amount of capital to make it work trader. This is a very much misunderstood part of being a trader. It is like starting a business with inadequate capital, it is going to take you a long time to fund your business. And make no mistake trading is like a business in many, many ways.
The notion that you can find a gem and 1,000 X your returns on a $1,000 is very unlikely. Don't go window shopping for a Porsche and quit your day jobs waiting for it to happen.
7. Do It In Style
Take time to understand the crypto you are trading. Each crypto has its own personality and will act a certain way. The reason is simple why certain cryptos act differently. A different group of traders and market insiders are controlling it. They will have different agendas and goes. Studying individual cryptos' behaviors can really tip you on what the next move is. Take the necessary time to watch and understand each coin's movements.
For example, XRP has huge trending moves. Ethereum is at its most dangerous when it looks like it is about to go lower. Bitcoin has an extensive period of range-bound trading before breakout out. These are all classic examples of crypto personalities.
8.Go On-chain
On-chain data really is the best way to find out what is going on under the hood with crypto. Many on-chain indicators actually front-run big price moves and give you a heads-up about a pending drop or rally.
In traditional markets let's face it, trading information is fairly limited. On-chain data comes into its own as you get to see what is happening on the Blockchain. Glassnode and Santiment are two great on-chain data providers.
9. Cycle of Markets
If you haven't seen a full bull market or a full bear market in crypto then you are at a huge disadvantage. If you have been a part of watched either then it gives you a huge advantage in how the market behaves in both cycles. This is known as the curse of the newbie. Because learning how asset classes react during cycles and the price action they follow will be the price of your education because it could take multiple years for that cycle to repeat again. And let's face it, waiting for 3 to 4 years for a cycle to repeat really is a long time.
10. Play Your Strength
Work out what type of trader you are, as yourself exactly what are your beliefs and your convictions as a trader or as an investor. If you think Bitcoin is going to $100,000 it makes little sense in skimming the market for a few $100.00 scalps every day and hoping that you are right most of the time. Better to sit tight and HODL and accumulate.
If you have an iron will and a proven trading system with statistical analysis then you may be suited to day trading. I must admit I have rarely come across anyone who has the discipline to be a day trader. This is why automation is so popular.
