Everyone knows trading is a very lucrative business. Many retail traders have secured financial freedom in their life just by learning to trade the currency pairs. But things have changed a lot as cryptocurrencies have added a new dimension to trading. With the help of a professional broker, you can expect to trade the major cryptocurrencies and make a decent profit. But remember, you are not going to get high leverage like your regular currency trading account. The leverage offered in the crypto trading account is a bit lower since the volatility of the asset is extremely high.
Though crypto trading has opened a new stage in the investment business, learning to trade cryptocurrencies is a very tough task. In this article, we are going to discuss the top four rules which will help you trade major cryptocurrencies without having any trouble.
1. Develop a robust strategy
The majority of the cryptocurrency traders are taking their trades without doing the market analysis. They don’t even know about the proper way to do the market data analysis. But if you have a look at the professional traders, you will notice all of them are doing the in-depth technical analysis to take their trades. They are following fixed rules to survive in the market. On the contrary, novice traders are buying the asset without even looking at the chart.
To trade cryptocurrencies with confidence, you must learn to do technical analysis. Technical analysis will help you to find profitable trade setups. You can scale the lot size properly based on the probability factors. So, develop a robust trading system before you invest a decent amount of money in the crypto industry.
2. Trade with the high-end broker
The intermediate traders often ignore the importance of the high-end brokers. But if you have a look at the elite traders, you will notice they trade crypto with the top brokers like Saxo. They know very well that without having access to the premium trading platform, it is impossible to find the perfect trade signals. Some of you might think professional traders are using the premium platform by spending a huge amount of money. But in reality, professional traders are smart and they don’t invest extra money just to get access to the premium platform. Instead, they trade with SaxoTrader and make consistent profits from this industry.
3. Follow the trend
You must learn to follow the trend or else it will be a very big challenge to make consistent profit from this market. The novice traders don’t have any strong knowledge about the core trend. Usually, they take the trades without doing the proper market analysis and lose money most of the time. But if you do the proper research, you will notice that without following the major trend, you can’t survive in this market in the long run.
To find the existing trend, you should be using the daily time frame. Some of you might be drawing the trend line by using the hourly time frame but this is wrong. Due to the high volatility of the market, the hourly time frame is not preferred by the pro traders. So, if the pro traders ignore the hourly time frame, you should do the same. Once you start taking the trades in a higher time frame, you should notice the change in your performance.
4. Risk 1% of your account balance
Being a crypto trader, you should risk only 1% of your account balance. If you risk more than that, it will be a tough challenge to cover up the losses. At times, you might have the urge to trade with big risks. You might make some big profit by such a decision. But this is going to make your confidence level low and you will keep on breaking the rules. So, stick to the rules of money management and trade the market with discipline.