When it comes to trading, it’s hard to come up with a strategy to guarantee market success. The best formula is always the one that suits the temperament and style of each. However, there are a few basic rules that some of the most experienced traders apply and who could give you ideas, especially if you are a new entrant. In any case, the first stage will be one of the experiments and perhaps some loss. If you are a beginner, the Bitcoin Trader Software can be the solution for you. Find below tips from senior traders will help you orient yourself in the crypto market.
The dot-com bubble was an opportunity for enrichment for some, for others a quick way to get rid of money, straight from home. What we I learn from the dot-com? That the best strategy is to diversify. The market for ICOs and alternative currencies is diverse, volatile and comes with the associated risks.
Obviously, the basic rule is to do your diligence and study coins with growth potential. You should build a rich portfolio. On the “do not put all your eggs in the same basket” system, rather than to invest 1,000 euros in one cryptomonad, you better buy for 100 Euros many coins. This way, with a single successful investment, you can cover all the others and make a profit.
Neither investments are made blindly. There you probe where the market is going, and so you limit risks. The downside? Few beginners are sufficiently organized to manage a broad portfolio.
Beware of margin trading
Margin trading may seem very tempting. When you have 1 bit of trading, and you are a beginner, you probably enjoy the idea of playing twice as much on the market and taking advantage of, say, two bitcoins. It is, however, one of the very risky formulas that older traders face.
Margin trading is a formula by which you borrow assets by securing your own assets at a higher or lower percentage. The exchange service lends you the maximum with an amount equal to what you have in your wallet. Practically, you as a trader do not know what you’re trading on. Your initial deposit covers any loss. From any winnings, first, include the amount borrowed. On the crypto market, where the volatility is very high, you can record a loss of twice as much as $ 3-400. Read here.
Armi Goldman, an experienced trader in the market for more than six years, has testified that he is avoiding this method, at least on the cryptomonads market. According to him, 90% of margin trading traders with more than 1% margin have lost 90% in the first year.
“In a market like crypto, I do not recommend using margin trading. Yes, on a 0.1% pendulum market, you have an edge. On a volatile market, like to say the bitcoin market, the “borrowing” that everyone enjoys is rather damaging,” explains Goldman. “In fact, most of the exchanges do not have the cash provided for margin trading anyway. I think we’re going to hit this problem soon.”
Attention to volatility
“I saw a big problem in the crypto market. Most users did not start as traders but as investors.” Armi Goldman also explained. “This means that a large number of market participants keep long-term bitchers. Just last week I made a simple calculation. Only 3% of the bitcoin liquidities are kept in day-to-day exchanges. The price is therefore dictated by the 3% who currently trade, which means even greater volatility in the market.”
It is advisable to administer the bitchers yourself instead of keeping them in exchange. The figure, however, illustrates that the amounts traded daily and giving the tone of the market are extremely small.
Use the tools on the market
Exchanges offer too few tools for traders. The majority only provide the worse margin trading and stop-loss, and it is entirely devoid of complexity. Even so, few use these loss-limiting thresholds and trade manually, depending on the market’s emotionality. Stop-loss is a tool that automates the purchase and sale of cryptomonads at a certain amount.
“After me, stop loss is vital,” explains Goldman. “As a trader, there are several ways to calculate support and resistance thresholds. It is not normal to sell or buy only after the emotions of the market and after you learn from others. You have to set yourself according to the market clue how much you want to buy and what amount you want to sell.”
Market analysts know that if a currency breaks a support threshold, it will have a downward trend in the next period. In the same way, it can break the resistance and get into ascension. These points of sale and purchase allow you to make moves just before the trend change. Do not be afraid of price cuts Older traders enjoy the price drop as much as growth. If you correctly identify sales moments and you manage to get out on the market before price corrections, then a fall or a panic-sell is just an opportunity to re-enter positions.
We recommend you check out this useful reference.
One of the most common mistakes for beginners is that they buy expensive and get selling cheaply. Beginners usually have a higher degree of emotionality on the market. It reacts very negatively to drops and with too much enthusiasm for price rises. If you manage to create discipline and have some trading strategies set up, you will only have to win. However, here is solid investment management. Even experienced traders end up losing at one moment or another. What is important is that, just as you have determined how much you expect to earn from cryptomonad investments, you also have a margin of how much you allow yourself to lose.
The fastest way to invest in ICOs
The ICO market has had some interest in the past. According to analysts, investment in ICO projects was also responsible for the increases registered by the ether last month.
Some ICOs have exceeded any funding expectations. Bancor, for example, raised $ 153 million in less than three hours. The most successful ICO so far remains The DAO (the decentralized autonomous organization of Vitalik Buterin), which has accumulated massive US $ 35 billion in July-August 2014.
ICOs (Initial Coin Offering) are coins marketed as a formula to raise funding for blockchain projects. Blockchain developers from various domains (starting with finances or encrypted communications and ending with the gaming industry) present projects at different stages of development. Developers sell cryptomonads under this ICO formula at a fraction of the price they hope to get at the time they complete the project and (possibly) list the currencies at exchanges. In this way, they raise the necessary funds to develop their products and platforms.
In many ways, ICOs resemble Initial Public Offering (IPO). Both are designed to raise funds. Instead of shares, ICOs are selling a new type of digital coin in a permissive market compared to the stock market. We have a roadmap of functionalities that we will add in the future, such as user reviews and a rating system for ICOs, as well as other smaller features. We have more to add to the interface. ICO Market is currently at the MVP stage with minimal functionality to test the market.