you must have a mechanical rules based trading system. These must be simple to follow and repeatable.
These are suggested 5 simple rules to follow if you are to make any headway with your Crypto trading/investing.
RULE 1 : ONLY buy or trade crypto that you believe in. For example a crypto project that has potential with currently working real or potential for real life applications. Do your detailed fundamental research on this (no short cuts)
Why ? : If the short term trade, does not go your way, you will have the confidence to “HODL”.
This way also you are not likely to panic sell at at loss.
RULE 2 : ONLY EVER buy that crypto (that you now believe in ) at some form of tested structural support levels or during a CONSOLIDATION PHASE AFTER A RETRACEMENT. (see this article to learn more about buying after retracements)
This way your risk is much lower, less chance of price “tanking” after you buy, less chance of panic selling only for price to shoot back up up again! (if you followed Rule #1, just HODL)
RULE 3: NEVER BUY a coin just because of the hype on social media or buy in because of FOMO (fear of missing out). It may be a great coin, but ensure you follow Rules #1 and #2 before you buy in.
Why? If you buy based on social media hype or FOMO, you are very likely buying at the top with much higher chances of price dropping soon after you jump in.
RULE 4: Don’t be greedy. Take profits gradually on the way up. You can do this by setting pre determined profit target levels or at some form of structural resistance level (Below is one of my real trade examples of how to take profit and buy back in at lower prices)
Profit is Profit! You will not go broke taking profits. After taking your profits, you should not care if the price shoots up.
RULE 5 – BE PATIENT. Have the patience to wait for your set up, NO set UP, NO TRADE
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