How to avoid the most common mistakes in cryptocurrency trading
Investment business is one of the most difficult tasks in the world. If you look at the success rate, you will be surprised to know that more than 95% of the traders are losing money. Usually, novice traders start taking their trades without doing the proper market analysis. Eventually, they make things complex by taking the trades with gut feelings. But if you want to change your life, you need to trade the market without following your emotions. Only then you can take the trades without making silly mistakes. Though there are hundreds of ways by which you can avoid the most common mistakes at cryptocurrency trading, we are going to highlight the most prominent ones. After reading this article, you will learn the proper way to manage your risk profile and thus won’t have to deal with the common mistakes.
Ignore emotional calls
Emotions can be very critical issues in the investment business. People who intend to make a living out of trading should always take the trades based on technical factors. Though it is hard to master the technical analysis, you can easily learn things by using the paper trading account. Paper trading account offers a risk-free learning environment. While learning the basics of trading, you should develop the skills to ignore emotional calls. Only then you can expect consistency in your trading performance. Learn to be smart and avoid emotional attachments.
Choose your broker carefully
Successful traders in Australia always chose their brokers very carefully. If you want to make a regular profit from this market, you should choose a broker like Saxo. Crypto trading is a very challenging task and if you chose to trade with a low-end broker, things will get worse. For instance, you will face heavy slippage during the trade execution process. And if you manage to make an insane profit, the broker might freeze your account. So, chose a good broker from the start so that you don’t have to deal with such problems.
Maintain trading journal
As a professional crypto trader, you should always maintain a strict trading journal. Without following a strong trading journal, you will keep on breaking the rules. This will make things very complex and you will eventually quit trading. While trading the crypto market, you should remember the fact, the volatility is extremely high. So, if you fail to maintain the journal, you will take the wrong steps very often. Moreover, after losing a few trades, you will become restless and this will force you to make silly mistakes.
Trade with discipline
The majority of the retail traders are losing money since they don’t follow strict trading discipline. To trade the market in a disciplined way, you have to become extremely knowledgeable. Feel free to learn from the free resources but make sure the source has a strong reputation. Trusting unreliable sources for crypto trading can be a big problem. At times, you will have the urge to trade with high risk to recover the losses. But if you do so, you will fail to maintain a decent risk to reward ratio in each trade.
Avoid negative risk to reward ratio
To succeed as a retail trader, you must avoid a negative risk to reward ratio. Trading with a negative risk to reward ratio is one of the key factors for which people struggle in the trading business. Before you open any trade, make sure the trade has a minimum 1:2 risk to reward ratio. At times, you might think you know everything about the market and thus you will trade with an insane lot. But if you trade with the low leverage account and think about the risk to reward ratio, you will never take such steps. Maintain the risk to reward ratio is more like creating a protective layer for your trading account. Stop aiming for bigger gains and aim for rational profit from this market.