To make your trading as effective as possible, you need to follow simple rules. Ten Rules
1. Build a strategy
The first thing you need to think about before buying a cryptocurrency is strategy. What are the objectives for which the asset is being purchased? For what reason will it continue to grow? Under what conditions will it be sold? You can get the basics for your own strategy from a course on crypto trading from Bybit Education.
Cryptocurrencies are subject to high price fluctuations. If you try to trade without a strategy, you can make many mistakes - sell too cheap or, even worse, at a loss.
2. Control your emotions
It may seem that a great and only opportunity to make a profit is to buy a cryptocurrency that rises sharply in value. However, in reality, such moves are often followed by a correction. Therefore, it is better to buy the asset on a drawdown and with a cool head.
FOMO (Fear of missing out) - fear of missing out. Many novice crypto traders are susceptible to this disease. Often, they buy coins on a "high" and sell at a loss when a legitimate correction begins. This can be avoided if you approach trading with a minimum of emotion.
3. Buying on a drawdown
It is always better to buy a cheap asset than an expensive one. However, it is important not to get caught in a trap, in case of a long-term correction. On the other hand, if the asset was chosen correctly from a fundamental point of view, the correction will be a good opportunity to buy.
In 2018-2019, the price of bitcoin fell from $20,000 to $3,200. Those who systematically bought the cryptocurrency during this long-term correction now have high profits.
4. Selling on the "hype."
When there is too much buzz around a cryptocurrency, it can be a sign to sell. Often the big players buy assets well ahead of the general public. So when a "hype" begins, the "whales" may start to get rid of their coins at a good price, leading to its collapse.
Tokens that are already popular often have less room to grow than little-known coins. That said, the risks are much higher in the latter case.
5. Construct your own analysis
All analysts, even the most famous ones, make mistakes. Therefore you should not blindly follow the advice of someone else. It is necessary to learn to collect information on the market and different opinions in order to base your own analysis on them. Then you can learn to better understand what is happening in the industry.
To follow blindly the actions of others means to repeat their mistakes and to incur losses together with them. No one can know for sure what will happen next. And you can learn to understand indicators and chart patterns as well as anyone else with the free Bybit Education project.
6. Watching the trends
Often, tokens from a particular sector show the greatest growth in the crypto market. Not only news aggregators are suitable for trend monitoring, but also specialized chats of traders, such as Bybit Community Telegram chat.
If you find an incipient trend, you can make the biggest profit. But it is extremely difficult to do so and one has to be prepared for higher risks and losses in case such a strategy does not work.
7. Don't follow the chart every 5 minutes
Novice traders or investors are constantly checking quotes. Some even get up in the middle of the night to check their balance on a cryptocurrency exchange. It's not only bad for your account (you can make a rash act and incur losses), but also for your health.
Even if you want to be constantly aware of what is happening in the market, it is enough to set alerts for a certain price range. When the price of the asset will go out of the specified range, you will receive an alert. The Bybit platform, for example, has such alerts, both on the desktop version and in the app.
8. Learning from Mistakes
Not all deals are profitable, many will be unprofitable. This is where the right approach is important: mistakes should not throw you off, on the contrary, it's important to use them to develop and hone your skills.
9. Diversify your investments
It is important to invest in different coins to reduce risks. Such an approach will protect your deposit from losses when one asset or an entire sector of the market declines. It is useful to use not only trading tools, but also staking services to diversify your sources of profit.
To diversify the portfolio, the cryptocurrencies in it should have low correlation (as much as possible in the crypto market). At the same time, the portfolio needs to be reviewed in light of market fluctuations and new trends.
Even the most successful traders and investors make losing trades. In this case, failures are much more important than victories. For through financial losses one can develop and gain the necessary experience.
10. Use only trusted services
There are many fraudsters in the cryptocurrency sphere, so it is necessary to trust your funds only to those platforms that deserve it. It is necessary to choose cryptoservices carefully, excluding dubious companies.
It is best to work with large companies, which are represented in different countries and have licenses of financial regulators. For example, Bybit exchange has been operating since 2018 and has more than 3.5 million users worldwide, and the platform's app score for Android and Apple devices is consistently above 4.5.