Bitcoin trading tips for all traders
I have been posting daily market updates for a while. I want to provide a list of good trading tips applicable for novice and advanced traders. Hopefully this post will help clear misconception and improve your trading. This is for trading only, not investment. IE: Speculate for profit through the volatility of the market.
When it comes to trading, where you get your information and how you filter them is important. During market movements, people always want to know why Bitcoin is moving by justifying it with news (related or unrelated). I can tell you from my experience that news always come after market movement. I have some personal stories, but I’ll share later. As a trader, we need to focus on the price action and how price reacts to news. A good piece of news during a bear market could be a sell-off. Market often shrugs off bad news during bull markets. My point being: observe what the market action is telling you, not what news is telling you.
Keep an open mind when trading:
For a speculator, all trades come with risk, the risk of being wrong. Whenever you place a trade, answer the following question first before you click that buy. I recommend keeping a journal or trading blog like me.
Write down the reason why you entered this trade. This could be anything from MV cross or support/resistance boundaries. This way, you can always review your initial reasons for keeping this position open.
If you happen to be wrong, what is your exit? Where is your stop? Always have a stop ready, even if the stop is large. Always keep in mind that the trade can and will go against you at times.
Trading can be emotional. We are terrible traders when emotional. The first step is to become self-aware that you are emotional. To say it bluntly, the market doesn’t give a shit about how you feel. My best advice is that you should stop trading temporarily until you can get your emotions under control. Obviously easier said than done, but with practice, you get the hang of it.
Focus on the exit:
In trading, we tend to focus a whole lot on entering a position, but very little on exiting. In fact, I believe the timing of the exit is more important than entry for trend followers.
Before a trade, have a strategy in place for when the market is going against/with you. We already explained stop-loss orders, but what does a trader do when the position is largely profitable? Exit could be a trailing stop-loss, or maybe a projected TA target. Write your thought process on paper.
These are the general tips I offer without being too specific. If you would like me to go over any specific strategies or want me to elaborate it further, leave a comment below.