How can you master the market as a crypto trader
3 min readDo not be fooled. Even though many trading influencers pose with their sports cars and promise you a lavish lifestyle, this doesn’t represent the successful trader very much. On the contrary.
Trading is one of the toughest professions in the world and only through discipline, practice and education can you make consistent profits. Always remember the golden rule: Never invest more than you are willing to lose.
This is the only way you can gain long-term experience and build a strong mindset, which turns out to be indispensable in the field of trading. Professional traders always rely on a strategic way of thinking and proceeding.
To support you on the rocky road to becoming a professional trader, we present the 5 most important tips that will make you a successful trader.
1. Technical and fundamental analysis
Technical and fundamental analysis are among the basic tools of every trader. Through these you will learn to assess investment opportunities, make trades and manage your risk. Both are based on different data points.
Technical analysis analyzes price behavior, trading volume and associated charting patterns. In contrast, fundamental analysis takes into account the micro and macroeconomic conditions and company data of your investment. Both together form the foundation for sound risk management and a mature trading or investment plan.
2. Trading Plan and Risk Management
You don’t have to do a lot of bartering to be successful. A big mistake that beginners make is over-trading and feeling like they always have to be in a trade.
However, it’s not just about how much you win. It is also of paramount importance to minimize your losses and to know when and why to close a trade. Therefore, a solid trading plan including risk management is essential for every beginner.
3. Trading Diary (Journal)
A well thought-out diary gives you an overview of all your trades. It is primarily for your own control, because a diary or journal allows you to analyze where your strengths lie and what you need to work on further.
If you make losses over a longer period of time, you can evaluate your data. You quantify and analyze your performance and derive how you can optimize your profits and contain losses.
The more trades you enter into your trading diary, the larger the sample and the more meaningful it becomes. A quantifiable approach can do wonders for your trading performance and help you gain emotional control.
4. Emotional Control
To be a successful trader, you need to make consistent profits over a period of time. Your own emotions often get in the way. They lead to reactive behaviors such as panic selling when prices fall sharply.
Experienced players know this and act exactly contrary to their own emotions. The best buying opportunities come when there is a lot of fear in the market. When the general public is euphoric, it’s usually time to sell your investments. After that the cycle starts from the beginning.
The emotional burden can be extremely high for beginners and advanced users. For this reason, emotional control exercises and a good work-life balance are strongly recommended.
5. Education makes perfect
Due to the high level of competition and the unique demands of trading, education and training plays a key role for budding traders. It is all the more important as a beginner to stay on the ball and invest in your own further training.
That is why there are numerous learning platforms that provide materials on the subject of trading. If you are interested in this, you can take a look around the Binance Academy, for example. There you will find the answers to the most important questions you should know about crypto trading as a beginner.
