Thats elaborative write up and good for the newbies or even experienced one if they don't follow the fatigue rule and greed rule!
However, though trader go for the small deposits and keep trading exponentially then that's fine since they don't risk huge amounts at the same time or at least they can keep leveraging the money from small to big scales.
This we can consider as step by step self evaluation of trading world. Because when we take smaller amounts then we see our own performance in the market and when loose while doing so then it does not take much from us! and it's worth for the lessons we take.
At the end, obviously it all come to the controlling your mind and save it from the greed trap!
Topic: ㅤ (Read 321 times)
As patience is very necessary in trading platform and newbies don't much know about the trading when they enter into the market. The trading market is too much manipulated now a days and it can be a source of loss for newbies when they don't know about the coins.
I read where Op wrote about margin trading and that is not good for newbie in trading, it is not only for newbies but I read also that experienced traders complaining about difficulty in that. It is a difficult thing to follow and is a part of the few difficulty experiencing in trading. It is giving hard time to understand for learners
As mentioned in OP, there is just no place for newbies in margin trading or futures but experienced traders can actually benefit from it. In fact, if you just think about it, all these newbie traders who lose money in trading, who are they losing it to? The experienced traders basically or the whales who are simply manipulating the market.I have always been in favor of trading small but trade with what you have because margin, futures are just different forms of borrowing money and for some reason I just don't feel right about trading with someone else's money.
Maybe if you have found a hole in the trading process like arbitrage trading then it's worth it.
Trading with demo, win big with demo and have illusion that they are genius.
And people will even take loans to fund their trading because the demo trading account they used to trade at, was giving them profits. It's much easier to trade with a demo account given the funds are virtual and the profit and losses are imaginary and once you start trading with real money, you will realize the real pressure when real money is at risk.Trading either for crypto or stocks should be mastered before jumping in with a mammoth capital. I laugh at all the talks about a bugger bankroll because more is your bankroll it will only pull you back from taking some carefree decisions which sometimes is important in crypto trading. At least with smaller bankroll, you won't be digging a hole for yourself.
This. Most common mistakes are
So to sum up 2 of the mistakes, it basically means that we shouldn't forget the formula and don't be cocky because when we think that we are in control, the more we will fall down hard, right?- Trading with demo, win big with demo and have illusion that they are genius.
- Trading with real money, but just start with small capital. Win big with small capital, and make big deposits. With bigger capital, and more time passes, the market reaches to correction time, they will lose their net-capital with liquidations.
- Sum up: at beginning, people seem to be very carefully, but with time especially after some wins, they are more careless. It is a start of their loses
I don't agree with you saying that it's a mistake to do demo trading, I do demo trading to see different mistakes that I can commit and learn from it, I don't aim to trade like it's real money there, if it's used correctly, it can help you a lot.
I think alot of the mistakes for most new traders is basically trading on Demo for months and making like a million dollars and thinking its easy and then depositing real money and seeing how difficult it can actually be.
Most don't realise but there is no emotions when you are trading with demo. So you can easily flip $100,000 positions back and forth and make money. However when you got your real $1000 on the line, it doesn't seem so easy.
This. Most common mistakes areMost don't realise but there is no emotions when you are trading with demo. So you can easily flip $100,000 positions back and forth and make money. However when you got your real $1000 on the line, it doesn't seem so easy.
- Trading with demo, win big with demo and have illusion that they are genius.
- Trading with real money, but just start with small capital. Win big with small capital, and make big deposits. With bigger capital, and more time passes, the market reaches to correction time, they will lose their net-capital with liquidations.
- Sum up: at beginning, people seem to be very carefully, but with time especially after some wins, they are more careless. It is a start of their loses
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Hence why its best to trade small, even for pennies because those are actual money and you will trade more cautiously then and you will see that even trading for pennies is alot harder than trading demo.
The bigger the capital one person is handling, the more pressure and more mistakes can be made. With a same altcoin, the bigger capital you use, the harder to exit at expected price. Obviously, this statement is for tiny and small cap cryptocurrencies, not for Bitcoin or top altcoins.
I think alot of the mistakes for most new traders is basically trading on Demo for months and making like a million dollars and thinking its easy and then depositing real money and seeing how difficult it can actually be.
Most don't realise but there is no emotions when you are trading with demo. So you can easily flip $100,000 positions back and forth and make money. However when you got your real $1000 on the line, it doesn't seem so easy.
Hence why its best to trade small, even for pennies because those are actual money and you will trade more cautiously then and you will see that even trading for pennies is alot harder than trading demo.
Most don't realise but there is no emotions when you are trading with demo. So you can easily flip $100,000 positions back and forth and make money. However when you got your real $1000 on the line, it doesn't seem so easy.
Hence why its best to trade small, even for pennies because those are actual money and you will trade more cautiously then and you will see that even trading for pennies is alot harder than trading demo.
I read where Op wrote about margin trading and that is not good for newbie in trading, it is not only for newbies but I read also that experienced traders complaining about difficulty in that. It is a difficult thing to follow and is a part of the few difficulty experiencing in trading. It is giving hard time to understand for learners
It's not like trading with margin and leverages is "not good" for newbies and beginners. the only problem is that it has a substantial amount of risks attached to it. Trading via spot is risky, talk more of adding leverages and margins that would not only complicate it but also bring even more risks to the table. That's why it's so easy to make more losses than profits when trading with them because you've to deal with those risks and not a lot of them know about to risks to be able to handle it.
Another interesting fact; when you get liquidated, there's no way of getting back on the trading without adding fresh capital from elsewhere and these liquidations happen every day.
If we sum up all the points of the OP, then we can formulate them in such a way that the main mistake of a beginner is that there is a desire to achieve maximum profit in a minimum period of time.
Many of those newbies wanted pr inspired by the profits or gains shown by other traders. I myself inflict lots of losses and not everyday we could have a good gains. So if ever there is a chance to keep those profits then grab it. Holding is good but we must see if out aseet are worth to hodl even with thr massive gains that we had. After seeing that then they do intent to dive in into the market without even realizing or knowing the risk behind until they would realize up things when they had already been wrecked up.
Its non deniable that we all did really past this experience since we are once noob but sooner or later they would really be able to catch up everything.
I read where Op wrote about margin trading and that is not good for newbie in trading, it is not only for newbies but I read also that experienced traders complaining about difficulty in that. It is a difficult thing to follow and is a part of the few difficulty experiencing in trading. It is giving hard time to understand for learners
Have seen crazy responses of newbies with the present market dump especially for those that went into margin and future trade. They loss virtually all their investment in the dump. They are likely not to listen to advise when they started until they have their personal experience with great loss. They will be the in the social media ranting not considering their greed.
The most basic mistake for newbies is that they are in a hurry so they don't learn it first, because in their heads they fear missing the moment to get a lot of profit, this kind of thing should be avoided, investing but without sufficient knowledge, is the same as gambling. and finally if they lose because of panic selling, they will announce to others about themselves who have been deceived 
I can add the following. In the cryptocurrency market, technical analysis is often completely useless for scalping. Therefore, newbies should read the latest news regarding the purchased cryptocurrency, especially the scheduled hardforks and halvings, in order to trade more successfully.
News is really very important for predicting price movements, but it is unlikely that it will be possible to get them in a timely manner. An example of such news, which served as today's pump of bitcoin, is the assumption that Amazon will accept BTC as payment for goods by the end of the year. But I found out about this news after I saw that the price of BTC exceeded 38 thousand dollars. Are there any traders here who found out about this news earlier and managed to take a position in long?
If we sum up all the points of the OP, then we can formulate them in such a way that the main mistake of a beginner is that there is a desire to achieve maximum profit in a minimum period of time.
Many of those newbies wanted pr inspired by the profits or gains shown by other traders. I myself inflict lots of losses and not everyday we could have a good gains. So if ever there is a chance to keep those profits then grab it. Holding is good but we must see if out aseet are worth to hodl even with thr massive gains that we had. Have seen crazy responses of newbies with the present market dump especially for those that went into margin and future trade. They loss virtually all their investment in the dump. They are likely not to listen to advise when they started until they have their personal experience with great loss. They will be the in the social media ranting not considering their greed.
That's the problem that they will encounter if they don't read and listen to the experienced ones. Can you imagine going on with that high risk type of trading without being equipped of experience and knowledge with what they do?It's like a suicide for your funds for being like that because that's really going to put themselves into the situation that they don't like just as losing that much money quickly with margin trading.
- Fourth moment. Greed in rebalancing to achieve an even higher percentage of profit. Many traders use their earnings not for position averaging and leverage reduction (if we are talking about margin), but for rebalancing. That is, let's say you have 1 BTC, you trade 1 \ 10 of the deposit and you were able to overclock the deposit by 50%. You now have 1.5 BTC. And with further trading, you can either withdraw these 0.5 BTC profit or leave it on your account for averaging and protection from unsuccessful entries into the deal. That is, now you have the opportunity to play 1 \ 15 from your depot. But no, many greedy traders rebalance and also continue to play at 1 \ 10, only now it is not 0.1 BTC, but 0.15 BTC. Now there will be more money from each transaction, the trader thinks. And so on, until the trader runs into a major correction and his balance is not enough to wait out this correction or a sudden drop. But if I played on 1 \ 15, then with a high probability it would be enough.
This is a good point. If a newbie traded 1/10 of his entire deposit and managed to gain 150% profit on the leverage exchange, then most likely he will rebalance the amount of his trade orders. However, everyone knows that the cryptocurrency market is highly manipulated and extremely volatile, so it would be better to increase the unused balance so that the position is not liquidated due to a lack of deposited funds.
But @OP, what do you think the ratio of the trading amount to the total deposit is acceptable to start rebalancing orders? 1/15? 1/20?
What other points can you add that a beginner should decide in his trading strategy?
I can add the following. In the cryptocurrency market, technical analysis is often completely useless for scalping. Therefore, newbies should read the latest news regarding the purchased cryptocurrency, especially the scheduled hardforks and halvings, in order to trade more successfully.
Newbie is that who is new in the crypto market. First of all i would like to tell that every one is new when he wants to involve in the new sectors. Crypto currency is one of the best growing sectors where every day new people are involving globally because of the crypto market has no boundary. When someone involving in the crypto market they are depositing some money but when their wallet shown ten percent or twenty percent profit by increasing price of that coin or token then their thinking goes up and they are going more deposit. But they have no enough knowledge about crypto market which currency have to buy or not then they are going to fall in loss. So i think its not necessary to increase deposit without learning about crypto market. At first learn how to ensure profit from crypto market then go for further deposit.
If we sum up all the points of the OP, then we can formulate them in such a way that the main mistake of a beginner is that there is a desire to achieve maximum profit in a minimum period of time. Such desires usually lead to the loss of the deposit. But among those who lost their deposit, good traders are subsequently obtained, if the correct conclusions were made about the reasons for the unsuccessful trade.
I did not use all of my money for crypto when I began. I lost a few times but I don't suicide because I did not lose all my money (even after a few loses).
I lost my capital and profit because I don't withdraw my capital after each investment or trade that ends with profit.
After many times of bad capital management, I withdrawn my capital if my investment end with x time of initial capital. And I use the profit to invest or trade again.
If the profit is smaller than initial capital, I will withdraw all profit, and only leave the initial capital to invest or trade again.
Big capital, big profit as well as big loss. After many years in crypto market, I realized the hardest thing is keep the capital SAFU and next is keep part of profit SAFU.
I lost my capital and profit because I don't withdraw my capital after each investment or trade that ends with profit.
After many times of bad capital management, I withdrawn my capital if my investment end with x time of initial capital. And I use the profit to invest or trade again.
If the profit is smaller than initial capital, I will withdraw all profit, and only leave the initial capital to invest or trade again.
Big capital, big profit as well as big loss. After many years in crypto market, I realized the hardest thing is keep the capital SAFU and next is keep part of profit SAFU.
Thanks for so many details and information, while I am still reading I wanted to clear some points though.
I like the second moment/point you mentioned because often times we set goals that defy logic and crypto trading while being volatile doesn't mean will make someone rich within a few days. One important thing to remember in any market, crypto or stocks is that - you only earn money when someone else somewhere in the world loses it. You just need to be smarter than an average trader and you're good.
It is clear that a beginner has no place in margin trading, as this is always the risk of losing all your money very quickly.
A newbie has no place in the crypto market whether it is margin or spot trading because the changes in price are sharp and rather random. I mean no one, even the best traders in the market can accurately predict the price. Once you gain experience at least you remain cool during bear runs otherwise someone who comes from a stock market would have a heart attack looking at the market movements overnight.I like the second moment/point you mentioned because often times we set goals that defy logic and crypto trading while being volatile doesn't mean will make someone rich within a few days. One important thing to remember in any market, crypto or stocks is that - you only earn money when someone else somewhere in the world loses it. You just need to be smarter than an average trader and you're good.
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