Cryptocurrency Trading. When I first heard this all I felt was amazement, confusion and fear. Over-acting right? haha... 😂
But yeah, I felt amazed😲 that time because of the profit most traders generated per trade. Very huge, to the point that you can stop your job and focus on that. Some traders did that as far as I know.
Confusion😵. I was really confused when I started to research on how this trading-thing works. The more information that I gets, the more vague it became. Or maybe I got confused because there is no mentoring happened during my crypto journey. I study on my own and tried to figured out all of the terms, charts, analysis and other stuff.
Oh, Fear😫. That feeling that almost discouraged me to try trading. I was frightened with the thought that I will lose all my money doing trading. It is possible to lose if you don't know what you're doing, right?
Eventually that fear didn't last, and it was converted into a courage to risk it and challenged my self to try new things, which is Trading.
Am I ready to Trade?
Now, this question was answered with the help of this thought process that I had experienced.
Why am i trading? What are my goals?
Before I started venturing into trading, I asked my self why do I want to trade and what are my goals on doing this.
So basically, to earn an extra income. Simple right? As I am still a student, I just want to earn some extra income to add support for our everyday expenses.
Eventually, I was captured by the exciting world of crypto and my goals was partially changed to the extent that I want to gain more knowledge, influence other people in a positive way on what crypto is, help them earn too and promote the cryptocurrency as I also believe that this would be the future of financing.
Basic idea of trading
There are a lot of tutorials and published articles on the Basics of Trading. Most of them does say the same thing, "Buy low, Sell high".
This is the very basic concept in trading as far as profit is concerned. Basically the price difference of the bought coin and the sold coin will be the profit.
For example I bought 5 candies worth 2 pesos each, so the total amount I pay is 10 pesos.
Then I tried to sell it to a friend worth 3 pesos each, for example I sold all the 5 candies, the total amount I get will be 15 pesos.
So 15 pesos minus 10 pesos (your capital) is equal to 5 pesos( your profit).
"Hmmmm...very simple, then should I just sell them ten times fold?".
❌Nahh...That's not how it works. As I learned in crypto trading specifically the Spot Trading in Binance (can be applied to other exchanges too), You should only sell to a price that has higher possibility that it will be hit in the nearest time (You can do long term too).
On futures trading, same concept applies, Buy low and Sell high. But you need to predict whether the price will increase or decrease. If you chose Buy or Long, that means that from that entry price your prediction is that the price in the future it will increase, while to predict a decrease in price, your order must be Sell or Short. The percentage profit or loss will be calculated based from leverage you chose and the amount of margin you provide, then on how far the price moves away from the entry price you made (either up or down).
Practice. Practice. Practice. ( Use demo account )
A good way to start anything is to practice first.
On the process of learning how to trade, I had a mistake, that is I practice using the real money. I place position (without thinking) using the coins I earned from faucets. And guess what, I lost them all.
Then I found some trading platform that offers demo account. One of it is SnapEx. It offers 10,000 usdt demo account that you can use to practice trade.
As what other skills to master always say, Practice makes perfect.
But I want to rephrase it with Proper practice makes not just perfect but consistently correct.
Practice trading using demo account, But treat it as if it is your own hard-earned money. In that way, you will be forced to manage risk, acquire more knowledge and earn confidence in each trade.
Check this article for my suggested Trading Platform with Demo Account, SnapEx.
Attitude, Don't let greed conquer you
This is very simple, yet so hard to apply.
I had one experience when I place my trade and in a matter of seconds my percentage profit went so high it reached almost 300% (on that moment It was high for me). The as I look into the chart, it just don't stop increasing, Oh that very long green candle. So greed comes in, I just didn't close that trade. The worst comes, after that long 5 minute candle, A big red candle emerged and from that 300% it went down so bad, it also hit my liquidation price.
Result? I lost all my capital on that trade.
So that's one thing I learned from that experience, To manage risk correctly, set up stop loss and take profit, and on top of that, CONTROL YOUR GREED!
Focus !
If you want to attain something, focus on it. Focus on your goals, focus on things that is necessary to attain that goal and focus on maintaining consistency.
You can apply that to in trading, Focus and have some time to acquire new knowledge. Don't get stucked with just the basics, Try to expand more and more.
I am not that good at trading, honestly I am just a beginner, But all of these are just my personal experiences and some are based from what I observed to those pro trader. (I hope I could achieve that level someday)
Start small
So you already have enough knowledge, the right attitude and of course did a lot of practice from your demo account. To start your first trade, Try having a small capital or margin and focus only to one pair, for example BCH/USDT pair.
After sometime you can add more capital once you get enough experience on what's going on before, during and after you place that entry.
Risk management
As what I said earlier, manage your risk properly. Set a Take-Pofit and Stop-Loss.
Take-Profit is the price wherein if the movement of price is favor to your position, the set price will trigger to close that position and thus take the profit from it. While on Stop-Loss, it is your marked price that whenever the position isn't favor to you, your whole margin or capital won't be totally lost. I usually set it to 10-15% of my margin, especially if I am in doubt in that trade. But that will be depend on every trader. You can have your own style or practices too when you tried it several times.
Most importantly, Invest in trading for the money that you think you can afford to lose. You should never trade your last money because trading is very risky. No one knows when will be the trade will be unfavorably to us.
CONCLUSION
These are all my experiences from this trading journey. Almost are on my personal opinion and also from my research. Before you start trading please start do your own research first, It is very important to have the information first hand.
SO, When will you start trading? Start learning first and the perfect time to start is NOW! 😉
Lead image created by me using PixelLab, emoji from emojisisland.com
I like crypto scalping