Cryptocurrency has turned out to be a highly lucrative field in the last couple of years as it has introduced a plethora of revenue streams for people. Let it be self-learning, availing the power of crypto signals or HODLing, you can earn a full-time income from this. However, please note that crypto trading is not simply about registering on an exchange and start placing your orders. It is a complex area and if you want to lower the probability of losses, you must be aware of a couple of things in advance. In this article, we will talk about an array of factors that you can follow to stop (or at least minimize) your losses in crypto trading, which a lot of newbies often face.
Crypto trading is a serious business and it requires training. It is up to you whether you go ahead with self-training or seek help from professional and experienced traders, but guidance is required, whatsoever. The very first and easiest indicator in this niche happens to be the crypto signal that allows you to understand when to make a move. MyCryptoParadise has a very experienced team in this regard and we can assist you with trading on Binance and Bitmex in order to earn more and lose less.
Our crypto calls are quite well presented and you just need to read the text once, take action, and set the trade!
Oftentimes, people forget that risks must be calculated to stop their trades from getting messed up. Whether you are following an experienced trader’s advice or your instinct, it is very important to manage the risk and if your trades suddenly start hitting the loss, then it is very important for you to try and average out the profits in order to stay afloat.
In a single sentence – keep an eye on the charts and never get greedy over market conditions (remember, the market is very big and you cannot go against it).
Do Not Chase Fluctuations
This is the first sign of an amateur trader that results in heavy losses. If you have bought a coin and the long-term prediction is quite substantial, there is no need to get hyper over small fluctuations.
Let’s understand it from a small example. Assume that you have bought XRP worth $50 and there is a very strong prediction (according to the patterns and pro traders) that the price is going to increase by 2X in 8 months. Now, if the price fluctuates over the period of a week and you sell your coins, you are losing a great potential here!
Therefore, it is important to follow crypto alerts given out by professional traders.
Diversify Your Portfolio
This is also a type of risk management where you stay away from putting all your funds in a single trade. Since the market is volatile and it carries risk, you should diversify your investments so that even if one of the trades brings you a heavy loss, others can average out and minimize the impact of sudden market movements.
Please note that this clause does not only apply to new coins. Even if you are buying some of the best cryptocurrencies in the industry, the concept of diversification should always stand.
Stay Away from Leverage
Plenty of traders who want to ‘get rich quicker’ fall for this methodology without understanding it in-depth and end up paying heavy debts, instead of earning. Basically, if you put leverage on a trade, you have to pay back the exchange from which you borrowed the money together with the transaction fee.
This instrument has brought millions of dollars to professional traders, but it can go sideways for newbies pretty easily. Therefore, if you are a newbie, you don’t want to end up in someone’s debt even before you start trading like a pro.
Take It Is a Business
A very major reason why people lose money even after following crypto trading signals is that they do not take this as a business and hence this is not their priority. See, the potential is huge and it could end up being your full-time income stream. However, if you want to establish it as a decent revenue source, you must take it as a business, not as a part-time ‘flipping’ job.