In the more than 10 years of navigating the cryptocurrency space, I have summarized these 11 hard-learned lessons to share with everyone, hoping they are helpful! Worth saving!
1. Never trade out of revenge. After I complete a trade, whether I profit or lose, I steadfastly adhere to my rule: I close the charts and do not open them again for 24 hours. This prevents me from engaging in revenge trading. There is a reason we close trades, which means there is no reason to immediately re-enter. Revenge trading is a major reason why emotional traders incur losses. This is especially critical when trading with leverage + Bitcoin. Cryptocurrency traders often spend many hours watching Bitcoin charts each day, making it difficult to leave and not re-enter after a loss.
2. Avoid trading cryptocurrencies on weekends. The cryptocurrency market + prices on weekends are often highly volatile with low trading volume. This makes it difficult to predict price movements. Cryptocurrencies can be more easily manipulated in low liquidity conditions, putting individual traders at a significant disadvantage. Additionally, weekends are for unwinding and entertainment; one should stay away from charts and take a good rest.
3. Trade only during specific time periods. I can only trade when I am sitting at my desk fully focused. The cryptocurrency market operates year-round, so we cannot always keep a close watch. I set specific trading hours for myself, and only during these times do I check the market. This avoids the impulse to constantly stay connected with the market and my phone, allowing me to be with my family and do other meaningful things.
4. Never become emotionally attached to assets. If you fall in love with the asset or investment you are trading, it can lead to poor decision-making. Trading without emotions means decisions are not influenced by subjective factors. People tend to have emotional preferences for certain altcoins, teams, or projects. This is good for investors but potentially problematic for traders.
5. Keep it simple and stupid. This is one of my steadfast rules. When I was a beginner, I would check multiple indicators, news sources, and patterns to try to find the optimal trading strategy. This often led to over-analysis. When I see a trading opportunity on the chart, understanding stop-losses and position sizes is much more important than timing entries and exits.
6. Trade only when your mindset is calm. This is key. When I feel angry, tired, or stressed, I do not trade. I must trade with my best judgment when I am calm and focused. Life outside of trading is key to maintaining the right mindset; spending time with family and friends, reading, and participating in sports are all crucial to my trading success.
7. Keep a journal. Journaling is boring and tedious. It is also very important because it helps us avoid making the same mistake twice. I have to remind myself to slow down, stop looking at the charts, and take time to record as much information about my trades as possible.
8. Simulate trading every day. I still regularly engage in simulated trading. I simulate trading Bitcoin and some altcoins daily, which helps mitigate risk and test new ideas and indicators.
9. Do not blindly chase dips. Trying to perfectly time the bottom is unwise; one should wait for safer trend reversal confirmation signals. Trading with the trend is much less risky than trying to buy low and sell high.
10. Do not overtrade. I find that the fewer trades I make, the more money I earn. Even if there are many opportunities in the market, I try to keep the number of open trades to less than 3. Managing the risks of multiple trades is much more difficult because if each trade goes against you simultaneously, you could incur significant losses.
You can also achieve a reversal of fortune in this land full of opportunities. Remember, while the circle is good, the risks are also great. Only by continuously learning, summarizing experiences, and constantly improving yourself can you go further!
