Patience, and a well-thought-out strategy. Here are ten essential rules to guide your crypto trading journey:
🔟 Ten Essential Rules for Smart Crypto Trading
1. Buy the Dip on Strong Coins
When a robust cryptocurrency experiences a consecutive nine-day decline, it may present a prime buying opportunity. Monitor such patterns closely to capitalize on potential rebounds.
2. Secure Profits After Quick Surges
If a coin's value spikes over two days, consider taking partial profits. Locking in gains helps manage risk and preserves capital.
3. Wait After Significant Jumps
Following a 7% or more increase in a coin's price, it's prudent to wait for a pullback before entering. Avoid chasing the price upward.
4. Enter Post Bull Run
Refrain from investing during the peak of a rally. Wait for the market to cool off, allowing for more strategic entry points.
5. Be Cautious of Low Volatility
If a coin remains stagnant for three days, extend your observation for another three. Persistent inactivity might indicate it's time to explore other opportunities.
6. Exit on Lack of Recovery
Should a coin fail to reclaim its previous day's price, consider exiting your position to mitigate potential losses.
7. Identify Emerging Gainers
When multiple coins are on the rise, others may follow. Spot coins that have increased for two consecutive days and consider buying during minor pullbacks, aiming to exit around the fifth day.
8. Analyze Volume and Price Movements
An uptick in volume coupled with a breakout from lows can signal a positive trend. Conversely, high volume with flat prices at the top may indicate a potential reversal.
9. Trade Within Uptrends
Focus on cryptocurrencies exhibiting upward trends:
3-day moving average (MA) rising: short-term uptrend
30-day MA rising: mid-term uptrend
80-day MA rising: strong uptrend
120-day MA rising: long-term uptrend
10. Maximize Small Capital
Even with limited funds, strategic trading can yield significant results. Maintain composure, adhere to your plan, and wait for optimal opportunities.
⚠️ Bonus Advice
Avoid Full-Time Trading Without Experience
Engaging in full-time crypto trading without substantial experience can be risky. Ensure you have a solid foundation before considering it as a primary occupation.
Never Trade with Borrowed Money
Investing funds you can't afford to lose, especially borrowed money, can lead to significant financial strain. Always use disposable income for trading activities.