Topic: 5 Tips for Successful Bitcoin Trading (Read 3946 times)
Tip #6: do not play at the bucket shop
This is true! i feel it
Thanks for your tips, actually this is bassic of trading, all trading currency.
This is true! i feel it
Thanks for your tips, actually this is bassic of trading, all trading currency.
Don't chase the price upward. If you set a bid and it doesn't get filled because the price went up, don't try to increase your bid to chase the price upward. Be patient. If you estimated the bid/ask levels properly, the price will move in those directions and you will get filled at a more reasonable price.
I made the mistake of chasing the price upward too many times myself. That's good advice you've given.
My tip for new traders: short bitcoin! 
+1
Short or go long depends on what the trend is
.
Another Tip.
When entering a trade never do a market order. Always put in a pending order and wait for it to get filled.
You will always feel you are missing the boat but this is normal. Leave it for an hour or so and re-evaluate.
A market order is dangerous. Let's say you open a market order; it is not uncommon for it to get filled with very small orders. This can increase your entry price by quite a lot making it a longer wait for profit.
( edit: someone already posted this one )
When entering a trade never do a market order. Always put in a pending order and wait for it to get filled.
You will always feel you are missing the boat but this is normal. Leave it for an hour or so and re-evaluate.
A market order is dangerous. Let's say you open a market order; it is not uncommon for it to get filled with very small orders. This can increase your entry price by quite a lot making it a longer wait for profit.
( edit: someone already posted this one
) My tip for new traders: short bitcoin!
+1
I agree with:
The other tips are only valid if you invest for fiat profit - which is stupid, if you ask me - and believe in technical chart analysis.
Fundamentals are more important to me than charts. I doubt that knowing the basics in TA will get you anywhere - but I agree on the basic premise that you should contain your losses, so you can enjoy your hobby a little longer...
ya.ya.yo!
Quote
1. Do not invest more than you can afford to lose
The other tips are only valid if you invest for fiat profit - which is stupid, if you ask me - and believe in technical chart analysis.
Fundamentals are more important to me than charts. I doubt that knowing the basics in TA will get you anywhere - but I agree on the basic premise that you should contain your losses, so you can enjoy your hobby a little longer...
ya.ya.yo!
My tip for new traders: short bitcoin!
How about quit trading and speculating?
My tip for new traders: short bitcoin!
Good tips, nice post.
This advice is retarded as hell. Trading/gambling is a job for many.
Basically its only a good advice if the target is someone stupid, because they obviously wont succeed. Otherwise - no.
LOL, that was a good joke. I make $300-$400 most days when I have the time to buy/sell bitcoins. I love volatility. You're obviously doing it wrong. I think you're thinking about buy/hold and assume it goes up over the course of days. I think the advice posted here is for day trading, which can be quite profitable if done right. For example, today I saw a large bid support level at $373, so I set my buy order at $374. The price was around $385 and going up at the time. Once a large ask wall appeared, it knocked the price back down, and guess where it landed? Right at $373, and very quickly jumped back up from the support. I got my order filled, and now we're at $385, looking good. Once you can read these levels, you can make some nice gains from the fluctuations.
This is also a very important point, I need to constantly remind myself. It's really easy to get greedy and think you're going to the moon. But profit is not really profit until you sell. I've had so many instances where I was up $700-$800 on a trade and ended up just breaking even because I didn't sell when I should have.
The thing I like to remind myself is that the type of gain that I'm thinking "isn't much" is actually a lot compared to stocks and other investments. They're gains that other people would love to have in other investments... but it's so easy to get greedy and think it's not enough.
I'd like to add some tips as well:
Don't chase the price upward. If you set a bid and it doesn't get filled because the price went up, don't try to increase your bid to chase the price upward. Be patient. If you estimated the bid/ask levels properly, the price will move in those directions and you will get filled at a more reasonable price. Likewise, don't buy on an upswing. When you chase, you're generally buying on an upswing, as the price goes up. True, it means you may 'miss out' on some gains, but in the long run you're much better off to consistently by in the downswing. For example, like I mentioned above, this morning I saw the price go from $384 to $388, and while I could have bought at $386, I stuck to my principles and set my bid at $374. Even if the price continued to climb past $388, I wouldn't touch it, because at any moment it could crash down and you don't want to be stuck in a bitcoin price crash. It's similar to a low-float stock, which means it's difficult to get out when the price is dropping quickly because it's not that liquid. Instead, watch for price moving downward and buy right as it seems that the selling is slowing down. You can determine this by looking at the spread on the bid vs. the spread on the ask and the total price volume on each.
Set your rules and don't let yourself be swayed by emotion. It's really easy to let emotion cloud your logic, but stick to your principles and your strategy. Treat it like a scientific experiment, and try to create a consistent strategy that will lead you to profits. Don't allow a bad trade get to you. Learn from it and factor that into your strategy.
Make sure to also factor in commission/fees into your trade profits. Most sites/platforms don't account for commission in their profit calculations so you have to do this yourself. Get a good calculator and/or create a program if you're able to, and use it often to ensure your profit margin is big enough to make the trade profitable. Depending on how much you're trading, you can make a $300-$400 profit on just 2-3% price swings. There's no reason to shoot for huge jumps. I've found that consistently making small gains is a much lower in risk and much easier. It's really difficult to predict bitcoin prices in longer periods anyway.
Best trading/gambling advice I ever received is don't trade/gamble.
This advice is retarded as hell. Trading/gambling is a job for many.
Basically its only a good advice if the target is someone stupid, because they obviously wont succeed. Otherwise - no.
LOL, that was a good joke. I make $300-$400 most days when I have the time to buy/sell bitcoins. I love volatility. You're obviously doing it wrong. I think you're thinking about buy/hold and assume it goes up over the course of days. I think the advice posted here is for day trading, which can be quite profitable if done right. For example, today I saw a large bid support level at $373, so I set my buy order at $374. The price was around $385 and going up at the time. Once a large ask wall appeared, it knocked the price back down, and guess where it landed? Right at $373, and very quickly jumped back up from the support. I got my order filled, and now we're at $385, looking good. Once you can read these levels, you can make some nice gains from the fluctuations.
Take profits
High volatility can cause insane pumps. Having a take profit 10% to 20% above the current price is a good thing to have since you can catch these insane pumps before the dump happens.
High volatility can cause insane pumps. Having a take profit 10% to 20% above the current price is a good thing to have since you can catch these insane pumps before the dump happens.
This is also a very important point, I need to constantly remind myself. It's really easy to get greedy and think you're going to the moon. But profit is not really profit until you sell. I've had so many instances where I was up $700-$800 on a trade and ended up just breaking even because I didn't sell when I should have.
The thing I like to remind myself is that the type of gain that I'm thinking "isn't much" is actually a lot compared to stocks and other investments. They're gains that other people would love to have in other investments... but it's so easy to get greedy and think it's not enough.
I'd like to add some tips as well:
Don't chase the price upward. If you set a bid and it doesn't get filled because the price went up, don't try to increase your bid to chase the price upward. Be patient. If you estimated the bid/ask levels properly, the price will move in those directions and you will get filled at a more reasonable price. Likewise, don't buy on an upswing. When you chase, you're generally buying on an upswing, as the price goes up. True, it means you may 'miss out' on some gains, but in the long run you're much better off to consistently by in the downswing. For example, like I mentioned above, this morning I saw the price go from $384 to $388, and while I could have bought at $386, I stuck to my principles and set my bid at $374. Even if the price continued to climb past $388, I wouldn't touch it, because at any moment it could crash down and you don't want to be stuck in a bitcoin price crash. It's similar to a low-float stock, which means it's difficult to get out when the price is dropping quickly because it's not that liquid. Instead, watch for price moving downward and buy right as it seems that the selling is slowing down. You can determine this by looking at the spread on the bid vs. the spread on the ask and the total price volume on each.
Set your rules and don't let yourself be swayed by emotion. It's really easy to let emotion cloud your logic, but stick to your principles and your strategy. Treat it like a scientific experiment, and try to create a consistent strategy that will lead you to profits. Don't allow a bad trade get to you. Learn from it and factor that into your strategy.
Make sure to also factor in commission/fees into your trade profits. Most sites/platforms don't account for commission in their profit calculations so you have to do this yourself. Get a good calculator and/or create a program if you're able to, and use it often to ensure your profit margin is big enough to make the trade profitable. Depending on how much you're trading, you can make a $300-$400 profit on just 2-3% price swings. There's no reason to shoot for huge jumps. I've found that consistently making small gains is a much lower in risk and much easier. It's really difficult to predict bitcoin prices in longer periods anyway.
Thanks for the feedback. I certainly sounds like you are an experienced trader.
I will add to your last point - in case anyone is considering using our platform - we include our commission on the profit calculations shown to users.
i didn't read it and i don't like it
The market is chaotic and manipulated by big whales. How do i predict that so it's not all luck? no matter how much TA i read i always have the feel im just gambling.
The difference between gambling and trading is distinct.
For both you don't know what the outcome will be.
With gambling you win or lose.
With trading you win some or you lose some.
What's the difference.
If you win 40% of the time with gambling you will always lose.
If you win 40% of the time with trading you can make a profit if you enter and exit at the right time.
Added bonus for trading is that the market is formed by people or bots which are both predictable by nature.
He whom can predict their behaviour can use it to benefit themselves.
The market is chaotic and manipulated by big whales. How do i predict that so it's not all luck? no matter how much TA i read i always have the feel im just gambling.
As one poster said, longer term trades. ie Daily charts. No matter how much manipulation there is, on the longer term, there is so much other trade activity, a Daily chart smooths this all over and the actual trend is revealed.
Short term charts has it's difficult points and not all strategies work on it. But short term trading has it's pay-offs too. Quick scalps like what we are seeing now during this correction are not possible while staring at a daily chart.
The trick is to figure out what the whales are doing and trade in anticipation of their movements.
The market is chaotic and manipulated by big whales. How do i predict that so it's not all luck? no matter how much TA i read i always have the feel im just gambling.
Thanks for the effort of posting this. I even learned a few new things .
No problem. Comments like this make it worth the effort .
Thanks for the effort of posting this. I even learned a few new things .
. 1. Do not invest more than you can afford to lose
Don't invest more into fiat than you can afford to lose
Nice article and thank you for taking the time to write it down.
However based on my Bitcoin trading I have a problem with points 4 and 5.
I am merely stating my view on your points based on personal experience.
I am a novice trader but have been trading cryptocurrencies for quite some time.
Do not set stop losses too low
In Bitcoin stop-losses are very dangerous. Reason for this is the high-volatility.
Set them too close and you get a guarantee that it gets stopped-out at a loss every time.
Set them too low and you still run the reason to get caught by a dump but losing a shitload of money in the process.
Yes having a stop-loss is generally a good idea in trading but with the pump and dumps in Bitcoin it will kill your account.
Big dumps are nearly always followed by a near equal pump (and vica versa) so waiting before getting out can save you a lot of money.
Instead of a stop-loss monitor your account vigorously.
Close unprofitable & leveraged positions within 24 hours
Stopping your posisiton within 24hours assumes high risk day trading. I would not advise this type of trading for beginners.
If you begin with trading, trade on the day charts and not the 1 or 5 minute charts.
Bitcoin has easy to follow long-term trends. For example a stochastic RSI combined with trading based on the long term trend (EMA) is a good and easy way to trade.
There are more easy to follow methods like Bolinger Bands and MACD.
Day trading (especially with a leveraged account) is not easy and mostly unsuccesful in the long term.
Leveraged accounts
Using leverage is not advised for beginner traders. You run the risk of getting squeezed and losing it all before you know what is happening.
Points I would recommend adding are
Risk/Money MANAGEMENT
When starting a trade you calculate your position based on what you are allowed to loose. Make sure you can lose no more than 2% on a single trade and have enough margin left so you don't get liquidated.
Take profits
High volatility can cause insane pumps. Having a take profit 10% to 20% above the current price is a good thing to have since you can catch these insane pumps before the dump happens.
You can raise these levels when the price goes up.
However based on my Bitcoin trading I have a problem with points 4 and 5.
I am merely stating my view on your points based on personal experience.
I am a novice trader but have been trading cryptocurrencies for quite some time.
Do not set stop losses too low
In Bitcoin stop-losses are very dangerous. Reason for this is the high-volatility.
Set them too close and you get a guarantee that it gets stopped-out at a loss every time.
Set them too low and you still run the reason to get caught by a dump but losing a shitload of money in the process.
Yes having a stop-loss is generally a good idea in trading but with the pump and dumps in Bitcoin it will kill your account.
Big dumps are nearly always followed by a near equal pump (and vica versa) so waiting before getting out can save you a lot of money.
Instead of a stop-loss monitor your account vigorously.
Close unprofitable & leveraged positions within 24 hours
Stopping your posisiton within 24hours assumes high risk day trading. I would not advise this type of trading for beginners.
If you begin with trading, trade on the day charts and not the 1 or 5 minute charts.
Bitcoin has easy to follow long-term trends. For example a stochastic RSI combined with trading based on the long term trend (EMA) is a good and easy way to trade.
There are more easy to follow methods like Bolinger Bands and MACD.
Day trading (especially with a leveraged account) is not easy and mostly unsuccesful in the long term.
Leveraged accounts
Using leverage is not advised for beginner traders. You run the risk of getting squeezed and losing it all before you know what is happening.
Points I would recommend adding are
Risk/Money MANAGEMENT
When starting a trade you calculate your position based on what you are allowed to loose. Make sure you can lose no more than 2% on a single trade and have enough margin left so you don't get liquidated.
Take profits
High volatility can cause insane pumps. Having a take profit 10% to 20% above the current price is a good thing to have since you can catch these insane pumps before the dump happens.
You can raise these levels when the price goes up.
Great suggestions!
Yes I agree that monitoring your account is better than a stop loss. Just need to be careful not to over-trade when doing this. Sometimes it can be tempting to make a trade because you are bored, and not because it is a good decision.
I think we could perhaps make a future post on these easy-to-follow trends. A lot of the posts here assume people know this stuff, which is not always true.
Lastly, taking profits is vital. As the chart above shows, it is all to easy to become greedy when you are making a profit. I think there has also got some psychological effects of wanting to keep a profitable trade open for longer as it looks impressive / makes the trader happy to see.
Jump to: