Beginner Crypto Trading Strategies Worth Considering
Given the market conditions, it is less obvious to start now than a few months ago. The questions are: when do you buy, and what do you buy? We will introduce you to some fundamental technical analysis to get a handle on basic trading techniques. We put ourselves in the shoes of a beginner who would discover cryptos and would like to start with $100.
When you read articles, YouTube videos, or any other content created by someone else, it can be tempting to copy it as a beginner. Indeed, these people seem more relevant than you because you don't know anything about them. In fact, this can be a mistake because there is a certain amount of information that we don't know when we copy the person. Here is some information to gather if you want to start copy trading:
Why does the person I copy buy?
What is its level of competence and success?
What is its time horizon?
Does he have the same risk tolerance as me?
What is its level of ethics?
Once you start following someone, we recommend that you study their performance. This will allow you to answer the questions we asked earlier and also to understand which moves you might be comfortable with if you were the trader or, on the contrary, which ones you don't feel comfortable with and avoid.
Another suggestion for copy-trading fans: Bitget Insights! Bitget Insights is a feature that allows high-quality traders to share their professional opinions publicly to help their fellow traders and earn more followers on Bitget Copy Trade.
Even though we are in a particularly unstable moment and a bear market for a few months, it is essential to always start from the "worst-case scenario." What happens in the worst-case scenario? Often the answer to the question is: we lose our entire investment. So, try to evaluate the different scenarios and assess the risks you are willing to take. Try to know how you will react when your portfolio has dropped by 10%, 20%, 30%, etc. The reverse is also true when you see your portfolio explode upward, how will you react?
Assume that the cycles last four years and follow the rhythm of the Bitcoin halvings. However, we recommend setting yourself the longest possible horizon, and if you can project yourself over four years, keep yourself from doing so.
Build a Well-Balanced Crypto Portfolio
We have written an article about that topic, if you have not read it yet, it is a strong basis to start with.
The goal is to really not rush into anything. We're in the middle of an economic crisis, which can continue for a long time. We recommend that you take your time to invest and think carefully about your positions. If you wish, spread your investment over time.
If you don't know how to trade, the price doesn't matter, and you can have fun buying on deep retracements.
If you are just starting out in trading, force yourself to do paper trading during the period of your choice. In parallel, do DCA and invest, for example, $100/month at a fixed date.
Keep a long-term view of this market, and don't let your emotions get the best of you at any time, set a plan and stick to it.
Learn the crypto technical trading analysis
Knowing when to sell and when to buy comes down to knowing the basics of cryptocurrency trading. Here is our introductory article for beginners in trading: knowing the trading indicators, the patterns, and how to read a chart. Let's go to Bitget and start studying the interface.
The first important element will be to understand how a chart works and especially to know how to read the candles:
The "1W" represents the time scale, in this case, weekly, and "W" for "Weekly". Each blue candle represents a week in which the price rose, and each red candle represents a week in which the price fell.
Then, a little further down on the interface, you will find the volume, which is super important to study too:
The volume represents the total amount of transactions made over the study period. Always the same color code, when you see a blue bar, it is that the buyers were more numerous in volume than the sellers, and when you see a red bar, it is that more people sold than bought. Why is this important? Because the more volume there is, the more action there is. Fundamentally, volume can also be used to determine trends. A decrease in volume and an increase in price may indicate a future decrease in price. Conversely, a decrease in price coupled with an increase in volume may indicate an increase in future prices.
We won't go into the patterns in detail but just know that in trading there are many patterns. These patterns are defined thanks to supports and resistances, concepts explained in our article: Trading101: A Beginner's Guide to Cryptocurrency Trading Strategies. There are upward and downward trends in this or that pattern. To know everything about how to read candles and understand the main patterns, here are our two articles on this subject: How to read candlestick charts (Volume 1) (Volume 2).
You can also learn about seven assumptions and principles for technical analysis in this article: Trading 101: Technical Analysis Explained.
Trading is not an exact science but rather one of probability.
Something essential to remember when starting out in trading is not to go against your instincts and emotional type. Each person has their own personality and trading will bring out some of your character traits, so it is essential to know yourself well and respect your emotions. Don't let your emotions take over, but listen to them carefully, because acting against your values and emotions will lead to the worst decisions. The difficult thing about trading is that if you listen totally to your emotions, your decisions will be bad too. So, as with many things in life, it's about finding the right balance.
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Disclaimer: This article is for educational purposes only and is not intended as investment advice. Qualified professionals should be consulted prior to making financial decisions.
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