6 Lesser known Trading Tips for Altcoins
Are you looking to trade some altcoins? If you have at least some experience with cryptocurrencies, you know that trading can be tricky, so you need to know as much as you possibly can to do everything right and earn big.
Also, if you’re reading this article, chances are you know that altcoins, especially low cap ones, always have a great chance for massive gains. But since cryptocurrency is a highly complex and technical market, you have to be armed with knowledge. For example, some people may try to steer you in a different direction, so you have to do your own research before making any moves.
So, that’s why we thought we’d give you some expert-level trading tips for altcoins so you maximize the chance that every investment you make brings you some profits.
Best Lesser known Trading Tips for Altcoins
Distance Yourself from Forums and Discussion Groups
Any professional trader will tell you that you need to stay away from discussion boards and chat rooms where people talk about altcoins and other related topics. While doing so may seem unreasonable, but the risk of being misguided by others is so great in this industry.
Most users of chat rooms, social media groups, and discussion boards such as Discord, Reddit, Facebook, and Slack have an ulterior motive, so their advice can actually hurt your game. To become a professional trader and position yourself for long-term success, you need to stay ahead of the pack, not in it.
Remember: your job as a trader is to do your own research, watch the graphs, and make accurate predictions. If you feel that you need some advice, though, consider subscribing to reliable blogs and VIP groups.
Always Watch how Bitcoin Moves
“But isn’t this article about altcoins?”
Yes, it is, but the main asset that drives change on the market is still bitcoin. It’s the gold standard of cryptocurrency that has such as a strong brand name that it influences all others.
So, if you notice that altcoin market experiences some significant changes, take a look at bitcoin’s market first. Most altcoins are traded according to its value, so ignoring the underlying asset that keeps it all together is simply wrong.
Besides, you have to know that bitcoins and altcoins have an inverse relationship. This means that if the value of altcoins decreases, bitcoins gain value. Conversely, if bitcoins tend to lose value when altcoins gain. So, if the bitcoin market is especially volatile, you should soon see the change in trading conditions of altcoins, too.
Don’t Enter a Trade Fearing that You’ll Miss an Opportunity
This is a common mistake among beginner cryptocurrency traders that you should definitely avoid. People who are new to this industry often use their fear to drive their actions, and most of them lose big.
For example, have you been in one of these situations? You’re trading on your computer and things are going well, but suddenly a window appears saying that the trade is almost done and you’re not in yet. You may manage to ignore it, but the temptation becomes greater when another window appears trying to entice you to enter the trade.
Instead of getting some of that action, just wait to see how it ends. Seriously. It’s the best decision you can make in this case because if you have a game plan – and you should – chances are high it doesn’t include entering every trade you’re invited to. Doing so considerably raises the chances of losing big.
Take Regular Breaks
Cryptocurrency market is a rapidly-changing environment and needs a lot of your attention, but that doesn’t mean that you should check how your investments are doing all the time. Of course, checking your coins and seeing them rise in value is amazing but you should also remember that you’re running a great risk of developing an obsession that may bring some serious negative changes to your life (and your trading success, too!)
“Take regular breaks and stick to a certain schedule,” recommends Margaret Reid, a writer at The Word Point. ”Letting the excitement of a random altcoin value gain entice you to check the market ten times in an hour and make some impulse investments is a very bad idea.”
On the other hand, a fresh mind and reasonable breaks increase the chance of making sound decisions.
Pick Altcoins for Long-Term Carefully
Unfortunately, most altcoins tend to lose their value over time, and you should consider that before making the decision to keep some of them for medium- and long-term. If you take an altcoin for the long term, chances are high that it would be a bad decision because it’ll become much less valuable.
If you decide to do so, though, the best advice that any professional trader can give you is to carefully assess the projects behind them as well as daily trading routines for these altcoins. For example, if you discover that an altcoin has a small community supporting it both online and offline and small daily trading volumes, then choosing it for long-term might be a bad idea.
On the other hand, chances are that such altcoins as monero, ethereum, dash, verge, and factom will be here for a long time because they have large support communities and daily trade volumes, so selecting them for storage reduces your chances of losing value.
Don’t Day Trade
If you feel like you need to improve your knowledge of the cryptocurrency market, day trading may be a bad idea. Even experienced traders know that effective day trading takes a lot of time and effort, so it increases the chance of making mistakes.
For example, let’s suppose that you’re day trading an altcoin of your choice and you’re following a rule of closing your position when the price hits 10 percent over the value for which you bought it. This may seem like a good rule, but there’s a good chance that the price keeps increasing by more than 10 percent. As the result, you’ll miss an opportunity to earn more by closing early.
Instead of day trading, consider buying and holding to your cryptocurrency of choice for a bit longer. This strategy increases the chances that your trading will be much more stressful.
Pauline speaks Portuguese, English, Spanish and Italian. She traveled the world to immerse herself in the new cultures and learn languages. Today she is proud to be a voting member of the American Translators Association and an active participant of the Leadership Council of its Portuguese Language Division.
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Hitesh Malviya is the Founder of ItsBlockchain. He is one of the most early adopters of blockchain & cryptocurrency enthusiast in India. After being into space for a few years, he started IBC in 2016 to help other early adopters learn about the technology.
Before IBC, Hitesh has founded 4 companies in the cyber security & IT space.