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State of the Crypto Markets! | Bitcoin Price | Live Stream | TA with Sneh

published on Oct 09, 2019 by Cryptosomniac Favorite
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Come join our Discord: https://discord.gg/rXQP9Ty

Rules to become a successful trader:

• Discipline and Patience: Cultivate discipline to be able to wait patiently for a trade setup. It takes hours, sometimes days to find the right trade, but once you do your risk is that much lower and your probability for a successful trade is increased. If you trade randomly without patience for the right setup and unplanned execution, your success and profitability will also be random. Often times, it will be riddled with mistakes and frustration and more importantly loss of capital

* Capital Preservation: Your number one rule in trading should be to preserve your capital. At the end of one year if you just manage to preserve your starting capital then this is indicative that you’ve mastered the ability to understand the value of your time and money in trading. Profits will eventually follow when you master capital preservation.

* Risk Management/ Position Sizing: You need to decide how much you can afford to lose on a trade before calculating desired profits. You just need to plan your losses because the profits will take care of themselves. In personal experience never risk more than 10% of your overall capital on a single trade and more than 25 % of your overall capital at any given point. Have a healthy risk to reward ratio of 1:2 (risk $1 to gain $2) or higher. If you follow this rigorously then you will not only survive in this market but also thrive.

* Emotions: I will try to present some examples to help you understand how our emotions might lead to bad decisions. Have you noticed that when an asset rises exponentially we tend to become greedy and in the fear of missing the profits we jump into the trade only to get trapped and have to wait out the bleed to the downside. Eventually you sell at a loss or have to wait much longer than you intended. Also, when our trade is showing even a small profit we are quick to take them, but when it comes to taking a loss we are not quick enough. So instead of making big profits and taking small losses we end up doing the exact opposite. Controlling emotions might be difficult but it is the key to making the right trading decisions.

* Relying on indicators: If you use multiple indicators to take trading decisions then you are bound to get confused as these indicators are not correlated i.e. some indicators might give a buy signal while the other gives a sell signal at the same time. Even if they point in same direction you cannot be sure as these indicators portray a delayed picture of what has already happened in the market - because that’s what most indicators are…lagging. So relying on indicators is very risky as you are referring to a delayed data in order to trade a dynamic market. Instead you can use knowledge of price action, volume spread analysis and Fibonacci tools for better results

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