I figured it was time to give some cryptocurrency trading advice and provide some tips regarding what I have learned along the way these past few months.
What I Have Learned Trading Cryptocurrencies
My experience tends to the “chart patterns” area along with several other market indicators such as Stochastics, trend lines, candlesticks, Fibonacci stuff, etc. and what I have found is that all of these things make great tools if your chosen market has enough “liquidity”.
I have yet to find a tool that can reliably indicate trends if the market only has a few trades per day. In cryptocurrencies it doesn’t really matter if the total “dollar” volume is low, what matters is how many trades per day are being made.
You might have a cryptocurrency coin such as HTML5 that only has a total “dollar” volume of a few hundred dollars per day at times (at Bleutrade), but the total amount of trades and the “volume” of trades being made in Dogecoin for HTML (and vice versa) for instance can number in the millions of Doge per day.
In situations like this one can use certain tools and their chart reading experience to gain an edge in the market.
- Don’t trade with more money that you can afford to lose.
- If you have a 100% gain then sell half of your position and “free ride” the rest.
- If you are down 33% in your position (from where you started) sell the whole lot of it and wait for the next good entry signal.
- If you wake up and find that your are up 10x (1000%) immediately sell half or more. Don’t fool yourself into thinking that there is a guaranteed 1000% more to come. Sometimes there is, but most times there is not.
- Don’t ever “average down” in your position. Always “average up”.
- The trend is your friend if you always add to your position as the market is going up – it is not your friend if you are adding to your position as the market is going down and hoping the trend changes.
So those are my basic tips for trading in the cryptocurrency markets. I have found that I like trading at Bleutrade even though many of the markets are illiquid (not much trading going on in certain coins), but the action is increasing.
Other exchanges such as Cryptsy and Bittrex have a lot more volume and I trade on those exchanges as well.
I’m adding a couple of my friend Jack’s videos below if you are interested in learning more about what Bleutrade has to offer. Jack has also published some cryptocurrency trading advice over on the Cryptolix.com site.
Beginners Start Here
And below is some basic “how to trade” advice if you are just getting started.
I plan on adding to these “trading tips” as time goes on. There is sure to be plenty of surprises and new developments in these new and growing markets.
– J. Luckton