Many people think that as a crypto trader you will reach a level of knowledge where making profit is easy. The truth is being a great trader is all about constantly learning. The rise of cryptocurrencies has led to a boom in crypto trading as investors want to make money. There are many ways to trade. This blog post will give you 8 actionable top tips to trade like a pro.

1. Only invest what you can afford to lose

Beginner traders upon entering the industry sometimes think trading is easy. The buy low and sell high mentality. They see riches on the horizon and they want it in a few weeks.

Worse still, they loan money from banks and trade with that. This leads to all sorts of problems.

The safest way to trade is to invest with your profits or invest with your savings.

Why do we encourage you to invest this way? There’s a trader’s psychology behind this! When you trade with your own money you will feel a lesser range of emotions. It will help you make the right choices. Imagine trading with a family members money; the pressure is two-fold.

2. Diversify your investments

Never ‘keep all your eggs in one basket’. Spread risk between good coins and even between exchanges. Crypto exchanges can be hacked so you don’t want to be in a position where you lose all your investment.

Keep crypto assets spread between hot and cold wallets. Bank the most of your coin value in your cold wallet and leave your trading funds on a selection of the most secure exchanges.

Check out this resource for the best exchanges for trading crypto.

3. Analyse coins carefully

Professional traders often recommend buying low and selling high. Sounds easy right. But when you start to trade, it’s difficult find the lows and sell the highs. This is where technical analysis comes in.

There are many resources on technical analysis on the internet so brushing up on these is key before you start your trading journey.

4. Install a price ticker

A price ticker will alert you whenever the price fluctuates. Depending on the price, you can make wise investment decisions.

Always consider the market capitalization also.

5. Never suffer from Fear Of Missing Out (FOMO) or chasing a pump and dump

When a price starts to rocket for a crypto, it’s best not to panic and try and jump on board. It’s a sure-fire way of losing out.

Do your research and make a move before the masses.

Likewise, pump and dump is a scheme that boosts the price through recommendations based on false or greatly exaggerated statements.

It’s better to not fall in these traps.

6. Set profit targets and make use of stop losses

A profit target is a figure above where you bought your coins. The trading platform automatically sells your position. This banks profit. And profit isn’t profit until it’s banked. Once you have made profit with your coins get them off the exchange to a safe wallet. Check out this post for the best crypto wallets of 2019.

Conversely, a stop loss is an automatic platform execution where you set a loss limit. If your coin goes down, loses are cut rather than an investment going to zero. This is great risk management. You’ll live to fight another day.

7. Use margin trading with care

Margin trading allows a trader to open a position with leverage.

Margin trading provides an opportunity for a trader to trade with money they don’t own by leveraging their position with borrowed money. For example, if we had an open position at 2X leverage with $100 of your own money, we would also trade with another $100 from a “lender” off the exchange totalling $200.

In some exchanges, like Poloniex, users provide the loans for the margin markets. In others, the exchange provides them.

For example, in the Poloniex exchange, anyone can lend their cryptocurrencies and benefit from interest on the loan.

If you want to read more about margin trading and where this can be done try this link – What is crypto margin trading?

8. Always protect your trading account with 2-factor authentication

Two-factor authentication, or 2FA, adds an extra layer of security to your account.

When logging into your account, in addition to your email and password you’ll enter a code generated by an authentication app on your smartphone. This is a much safe method and cuts down people being able to use your login credentials.

Top tips for crypto trading – wrapping up

And that’s our 8 top tips for crypto trading like a pro. Always DYOR and invest wisely.

Crypto Coin Dude is the owner of the UK cryptocurrency blog www.cryptocoindude.com. He created this blog to share his passion for cryptocurrency to the widest possible audience. He hopes to try and make this complicated and rapidly growing topic clearer to everyone with an interest in digging deeper.