Cryptocurrencies have definitely changed the way this world is functioning. We do not want to say that traditional financial tools were terrible. However, with cryptos like Bitcoin, Ethereum and others, things have become more manageable, reliable and quicker. There is no middleman involved in transactions which ensures that all of them are completed in a short period of time.
But, trading with crypto isn’t as easy as you think. More precisely, there are many things you need to be aware of before starting this journey. We would like to highlight them all in this article to make things easier for you.
Make Things Easier With Adequate Tools
Before we move to the main point, there are certain things we would like to explain. First and foremost, there are no shortcuts on this journey. On the other hand, some people believe that crypto success depends on luck which is the wrong approach. You will truly need to work hard on your trading skills until you become a professional.
It is hard to say how much time you will need to invest to become an expert. But, we do advise you to use all the available tools that can simplify things for you. With simple registration steps, you can get access to some useful pieces of information and data that can help you become a professional. One of the options you have is to use crypto platforms such as https://bitcoin-storm.live/.
Now, after we explained everything, let’s move to the main point. Let’s find out together what steps you need to take to become a professional crypto trader!
Define Your Goals and Risks
The first step you need to take is directly related to your risks and goals. Every beginner must understand the goals he/she wants to achieve. This is going to be necessary later when you are establishing the main strategy you will use. You won’t manage to find it without a clearly defined goal.
Yet, there is one thing that most beginners do. They often do not try to defeat their ego. In other words, they establish some huge goals that are hardly achievable. This usually leads to failure. You need to understand your current position and that crypto trading is not a game. Your goals must be realistic in every possible way.
But, here comes another crucial question – how to know which goals are realistic? Well, you need to define your risks as well. For example, you need to know what is the violability of the current market or crypto that you plan to invest in. Also, you need to put into consideration all the negatives and positives and, based on the results that you get, determine which goals you can actually achieve. That’s the tactic that all professional traders are using.
Define Your Initial Capital
This and the previous tip are directly connected. You need to know exactly how much money can you spend on cryptos. This will directly tell you whether the profit you plan to make is realistic or not. If someone tells you that making millions out of nothing is possible, be sure that person is telling you fairy tales.
We do understand that most of you do not have a big capital to start with. This is a completely legit and common situation. But, you must establish goals that are directly connected with the funds that you can afford to spend.
Our general piece of advice is to never spend all. If you have 10k in your bank account, don’t spend more than 5k on cryptos (approximately). The remaining amount of money should be there as a plan B in case things do not go in the right direction.
Do the Appropriate Technical Analyses
This part of the process is actually the one that will take your time and nerves the most. Technical analyses are there to help traders understand the trends in the crypto world. As we said, the volatility in the crypto world is extremely high. Because of that, you need to analyze changes in the market all the time to get good predictions.
The good news for you is that there is no just one method of following trends. There are three of them that we would like to highlight in this article.
One of the options that you have is known under the name Fibonacci retracements. This type of analysis actually follows the highest and lowest points of any cryptocurrency. After you do that, you will need to divide the vertical distance that is based on the different Fibonacci ratios. There are five of them, and they look like this
The second option that you have is known under the name Bollinger Bands. Making these technical analyses is actually the easiest option. Your duty would be to check out the average price of any crypto for a specific period of time. After you do that, you should divide the chart into two different “parts” – the upped band and the lower band. When the price reaches, for example, the upper band, crypto traders decide to sell. On the other hand, if it reaches the lower band, crypto traders decide to buy. This strategy does not involve some big risks, but they usually do not ensure higher profits as well.
The third option you have is moving averages. It is similar to the previous option with additional tiny details. With these analyses, crypto traders are actually analyzing the moving averages of each crypto for different periods. That can be days or weeks. Of course, they give a small advantage to the recent price averages as they are more important ones.
As you see, there are many things you need to take care of. We do not want to say that becoming a crypto trader is difficult or impossible. Yet, you truly need to invest a lot of time and energy to become better at what you are doing. There are tools, like the one we mentioned, that can make things a bit easier for you. Also, be sure that you properly define your goals and risks as you won’t manage to do anything without that move. We hope you understand now how the entire process looks.