Structured guidelines can improve decision-making and risk management. Here are key principles to follows ; 1. Risk Management First - Never Invest More Than You Can Afford to Lose: Allocate only disposable income. - Position Sizing: Limit single trades to 1-5% of your total capital. - Stop-Loss Orders: Automatically exit losing positions (e.g., set at 5-15% below entry).
2. Education & Research - Understand Fundamentals: Research projects (whitepapers, team, utility, tokenomics). - Technical Analysis (TA): Learn chart patterns, indicators (RSI, MACD), and support/resistance levels. - Stay Updated: Follow crypto news (CoinDesk, Cointelegraph), regulatory changes, and macroeconomic trends.
3. Strategy & Discipline - Define Your Strategy: Day trading, swing trading, or long-term holding? Stick to one. - Avoid FOMO (Fear of Missing Out): Don’t chase pumps; wait for pullbacks. - Take Profit Targets: Secure gains at predetermined levels (e.g., 2:1 risk-reward ratio).
4. Security Essentials - Use Reputable Exchanges: Binance, Coinbase, Kraken (prioritize security features). - Enable 2FA: Always use two-factor authentication. - Withdraw to Cold Wallets: Store assets offline (e.g., Ledger, Trezor) for long-term holds.
5. Psychology & Mindset - Emotional Control: Avoid panic selling or greed-driven decisions. - Journal Trades: Record entries, exits, and reasoning to refine strategies. - Accept Losses: Not every trade will win; cut losses quickly. Practical Guideline; - Diversify: Spread investments across different assets (e.g., Bitcoin, Ethereum, altcoins). - Avoid Leverage: Especially for beginners—margin trading amplifies losses. - Tax Compliance: Track transactions for tax reporting (tools: Koinly, CoinTracker). - Scam Awareness: Beware of "guaranteed returns," fake giveaways, and phishing links.