Learn how to Trade better in Cryptocurrencies

Coinstate Team : March 18th, 2018




Learn how to Trade better in Cryptocurrencies

Learn how to read the charts

Learning chart basics will serve as the foundation to your success in trading cryptocurrencies. When you understand the charts, you will learn the right time to buy and sell cryptocurrencies to make a profit. You will be protected from the number one pitfall of many investors to not buy on a recent hike in the price of a coin, rather wait for a price correction and then buy. Some key terms to research and learn about are candle sticks, moving averages, support lines, resistance, and RSI. It is important to learn about different types of orders, a Market order refers to when buying at the current market price. Limit order is setting a future price to buy or sell at and finally a Stop Loss order is setting a future price to sell or buy at and it also allows you to set a price that if the price goes in the other direction to get out of the trade. It is also important to look at the order books to determine the buying and selling pressure which will have an impact on whether the price goes up or down.

40% increase means it happened already

When searching for a cryptocurrency to buy one might be lead to think that a coin that has just seen significant increases maybe a good coin to buy but that might not be the best idea most of the time. Actually, quite the opposite is true, coins that have seen some reductions in price recently will prove to be a better opportunity to buy. As a rule of thumb its best to stay away from coins that have recently risen over 40% in the last day or so. While they might continue to rise, the fact that they have risen so much might indicate that there will be a correction sell off coming soon where early investors are starting to take some of their profits. Likewise, it is a good idea to use a case by case analysis when considering coins that have risen over 25% in the last 24 hours. A win win strategy for choosing coins is to go with coins that have a solid foundation, a working product, good technology, and is solving a real-world problem by using cryptocurrency and the blockchain. It is also important to go with coins that have a strong and active team behind them.

Set daily goals

Setting daily goals is a good idea so you don't get caught up while trading and lose money you have earned on previous trades. If you fail to set daily goals, greed can get the best of you, causing you to lose money you have just earned on a trade or even losing some of your initial investment. You will find that setting a daily goal will serve as a safety net and safeguard gains made on a trade. At times it may be hard to stay out of the market after you have met your daily goal as you see the market is still going up but time will prove that it is prudent to set daily goals and stick to them.

Market pumps

Be careful not to get caught in market pump and dumps. Pumps happen when a coin is rapidly increasing in value. This might be done by a group of individuals or in a closed group, or even from public figures who have a large social media following. Also, it is possible for market pumps to happen naturally by just a lot of individuals buying a lot of the same coin. After the price pump of a coin, now comes the dump. This is where the earlier investors start selling their coins and taking their profits. The sell normally plummets the price and leave later investors with a loss and thus not able to sell or must sell at a loss. This leaves later investors "holding the bag".

Stay up to date

To maximize your profits in trading it is a good idea to stay up to date one vital statistics and information that will lead you to make good market decisions. Learning about bitcoin's mempool size might give an indication of how many coins are being moved around, some may be moved to exchanges to sell them. Staying up to date of the latest news is a good idea also. This will give you information on things that might positively affect cryptocurrency prices and items that might also drive the price down. While consuming news articles it is important to not fall prey to news spreading fear, uncertainty and doubt(FUD) in the market that might lead you to prematurely exit a trade causing you to lose money.

Coinbase allows you to buy Digital coins. Use this code to get a US $10 sign on bonus.

Genesis Mining allows you to mine Digital coins. Use the link on the right or use code 1zV0Rp at checkout to get a 3% discount.

Follow & subscribe to us on these social media channels.