Too many people are afraid of the crash of cryptocurrencies having seen how ripple, bitcoin had fallen double digit in a single day. Welcome to the new normal. This class of unique assets (if it can be classified as one) has these characteristics, high volatility. It can works both ways and I think that is the draw or charm of this "asset" to many.
It's a quick ticket to making fast money (read - also lose fast money) literally in minutes if you are precise a the timing of execution. A veteran trader once shared with me, no matter how the market becomes, always stay cool, do not get too emotional and trade with your head not your heart.
At this juncture, position sizing is crucial. Ensure your position size does not increase unnecessarily just because you have a few wins (luck or no luck). Better to stay constant and make the smaller profits but consistent one than to "show hand" unless you have deep pockets with lots of cash to burn.
Unlike in a football game, you do not stick to one role you have been given. Here, in trading this cryptocurrencies, you have to wear 2 hats - striker and defender. Know when to attack but also constantly be cautious and work on your defence as we'll.
Defence here refers to your Stop loss - not increasing it when you have a losing position. Don't bang on hope and increase your SL , hoping the price action would swing otherwise later. You would be sorely disappointed and pay money to learn your lessons. Be strict on your SL, 50 pips is50 pips, do not adjust to 75 or 100. Cut the loss , accept it and move on - that's part and parcel of this game.
Defence also means knowing when NOT TO trade. Unless you are a professional trader, I think for most of us who have a day job or working on other projects, it is not and often better to trade daily. I do this intentionally when I have a few lucky wins consecutively for a few days.I stopped for fear of heart rules over head. It often does - greed monster wants to take over your logical mind. Be warned !
It's a quick ticket to making fast money (read - also lose fast money) literally in minutes if you are precise a the timing of execution. A veteran trader once shared with me, no matter how the market becomes, always stay cool, do not get too emotional and trade with your head not your heart.
At this juncture, position sizing is crucial. Ensure your position size does not increase unnecessarily just because you have a few wins (luck or no luck). Better to stay constant and make the smaller profits but consistent one than to "show hand" unless you have deep pockets with lots of cash to burn.
Unlike in a football game, you do not stick to one role you have been given. Here, in trading this cryptocurrencies, you have to wear 2 hats - striker and defender. Know when to attack but also constantly be cautious and work on your defence as we'll.
Defence here refers to your Stop loss - not increasing it when you have a losing position. Don't bang on hope and increase your SL , hoping the price action would swing otherwise later. You would be sorely disappointed and pay money to learn your lessons. Be strict on your SL, 50 pips is50 pips, do not adjust to 75 or 100. Cut the loss , accept it and move on - that's part and parcel of this game.
Defence also means knowing when NOT TO trade. Unless you are a professional trader, I think for most of us who have a day job or working on other projects, it is not and often better to trade daily. I do this intentionally when I have a few lucky wins consecutively for a few days.I stopped for fear of heart rules over head. It often does - greed monster wants to take over your logical mind. Be warned !