LUNA and Celsius holders were the latest to suffer huge losses in the crypto market. The truth is none of us trades in crypto without taking losses. Losses are part of our training and experience as traders. But, we can limit how often they occur and prevent some unexpected heartbreak. This is the only way to become a successful long-term crypto trader.
Would you like to learn how to prevent losses as a Crypto trader and ensure that your assets are safe? In this article, you will learn all you need to know about building the right set of rules that’ll ensure your success and keep things safe.
Rule #1: Stay Updated With the News and On-Chain Metrics
One of the best ways you can start your day as a crypto trader is to stay informed on what’s going on in the market, especially the project you are interested in. Many crypto traders make the mistake of diving right into the market without realizing that a lot can happen in a few hours. The market is often filled with hype and crappy projects. So, staying informed helps you make better decisions.
As a trader, it is best to spend some time each day touring through specific pages for :
- Global News.
- Financial news: Going through Bloomberg, Forbes, Reuters, Investopedia.Com, and some others, could give you a hint on what’s happening.
- Political and regulatory news: Government agencies across the world like the SEC are looking for ways to invade the crypto space and impose regulations. So, if any of these pull through, there might be some shake-up and limitations to the freedom we are all enjoying so far.
You can sign up for breaking news content on some of these platforms or if you are looking for crypto-specific news, our presenter Natalie helps you keep your finger on the pulse with her daily news videos. This way, you’ll receive alerts when something important happens that’s of concern to you. At the time of writing this article, this is the latest crypto news video on our channel:
Where to Get Crypto Information?
Knowing where to get your news content could be a tricky task because there are hundreds of sites out there and not everyone is credible or reports the right thing. So, here are some places we recommend you get your news from.
- Crypto Twitter: You can find details about the latest project launch on Twitter faster than you can get them on Google or anywhere else. So, make Twitter your best social media app.
- On-Chain Analytic Tools: On-chain metrics have time and again proven their accuracy to cast the shadows of coming events. But which On-chain indicators should you trust- there are hundreds of them. Well, our researchers have been regularly informing our ACCESS PRO Members about the timely on-chain indicators. Some of the leading exchanges like MEXC give you access to basic indicators like:
- Simple Moving Average
- Exponential Moving Average
- Ichimoku cloud
Just to remind you we have an AB-exclusive campaign running with MEXC. You need to sign-up and use the AB Exclusive link in the desc and trade to become eligible to win a bonus worth $6,699. Watch this tutorial video to know the details.
If you want to do the work yourself getting into the habit of using the right tools when trading crypto will increase your chances of success. There are several on-chain tools to help you get specific details about a project. Many cryptocurrencies use public blockchains to record and verify data.
So this means that the information can easily be gotten on-chain. Traders can determine market sentiment by studying the on-chain metrics of a specific cryptocurrency. They help you decide whether to invest or not. However, it is up to you to make the final move. Here are a few on-chain tools you can use:
Note: You can source for important details using other metrics like the TVL (total value locked), transaction volume, and the number of addresses and wallets.
Rule #2: Monitor your Investments
Many traders are monitoring the prices of the crypto market during this period of instability. But, this should not be something you do out of panic. Instead, you should make it a routine to organize and track your crypto investments daily. This way, you’ll know what’s going on with your token and the best line of action to take.
We know that it is almost impossible to stay glued to your screen while monitoring your assets. But, keeping tabs on them one to three times a day is enough. Let’s look at a few of the best tools:
- CoinGecko: They give you instant pricing and market info. You can also sign up for an account with the platform and create a portfolio to keep track of your holdings all in one place. You can follow their Twitter handle too. Here is an example of the news they bring:
The BTC bridge and its assets weren't affected,
but Harmony has halted the bridge to prevent further transactions.
Shaky bridges 😨 pic.twitter.com/oFqzDfIrSD
— CoinGecko (@coingecko) June 24, 2022
- Crypto.com: They are a cryptocurrency exchange and not a native portfolio tracker. But, it features pricing and tracking for hosted wallets. Crypto.com also enables traders to follow up on real-time and previous prices for cryptos they have invested in.
Note: You can track crypto prices built on a specific blockchain or those held by a specific fund. You can also follow up on top gainers and losers and even keep track of the volume and market cap of projects on Crypto.com.
- Investing.com: is another top tool used by many traders to track their portfolios. The platform helps you stay connected and monitor your holdings’ performance alongside other functions. Don’t forget, that monitoring your assets should be something you do daily. You can do that with any of these tools we listed here.
Rule #3: Plan Your Trade and Trade Your Plan (Stick to Your Strategy)
If you ask any successful crypto trader about their biggest secret, they’ll probably tell you it’s their game plan. These top guys never go into the market without a plan. And even when things seem scary, they stick to their game plan based on the research they’ve done.
You can’t overemphasize the importance of having a game plan. The game is simple: “If you fail to plan, you plan to fail.” After going through the crypto news and using your on-chain tools, your next action should be to carve out a plan and STICK TO IT. We emphasize sticking to it because some people easily give up and try something else when it looks like it’s not going their way. It’s okay to be dynamic, but sometimes being spontaneous could be costly in this market.
Therefore, your plan should be written with clear signals that are not changeable. But it should be reevaluated once the markets have closed. The strategy may change as market conditions change, and as your skill level improves. Try not to use someone else’s trading strategy. Here is an example:
One good strategy to enter positions is dollar cost averaging.
Instead of throwing all of your money into one asset at once, break the investment up into smaller, periodic ones.
This reduces your risk and increases your chances of success. pic.twitter.com/J9qHsvdtXl
— pothu (@cryptoPothu) June 21, 2022
Rule #4: Study Market Sentiment
In very simple terms, market sentiment refers to the mood of the market. This talks about the general opinion and feelings of investors towards a specific asset. The market is often driven by emotions. So knowing what those emotions are could help swing things in your favor.
Market sentiment is often reflected in the price movement of the asset in question. Therefore, here are some tools to help analyze market sentiment:
- Fear and Greed Index: This is one of the most widely used sentiment analysis tools. This index measures the fear and greed of investors in the crypto market.
The Crypto Fear and Greed Index ranges from 0 to 100. So, 0 shows extreme fear among investors, which could lead to significant selling pressure. On the other hand, 100 indicates that investors are becoming extremely greedy. Bitcoin’s fear and greed index are presently at 12, showing extreme fear.
Bitcoin Fear and Greed Index is 12 — Extreme Fear
Current price: $29,295 pic.twitter.com/oO54lzTjFv
— Bitcoin Fear and Greed Index (@BitcoinFear) May 24, 2022
- CoinGecko: Here’s another platform that could show you the market’s mood. CoinGecko provides a detailed analysis of different coins and assets. These stats could help you see the direction of the market.
- Lunar Crush: This platform offers daily real-time figures from activity across social media for bitcoin, crypto exchanges, and thousands of altcoins. The data assembled here could be used to make decisions based on the market’s sentiment.
Rule #5: Read the Whitepaper for All the Projects You Want to Invest In.
You must make it a habit to read the whitepaper of any project you are interested in before investing in it. The whitepaper details the project’s plan. If you don’t understand or agree with it, don’t invest in it. This would help you avoid being a victim of rug pulls and other fraudulent projects.
Many traders just dive into any project that looks productive. Sadly, this could be one of the biggest mistakes ever. Therefore, as you read more whitepapers, you’ll notice a lot of overlap in concepts and problems they’re trying to solve. A good place to start is with a close comparison of two companies with similar product lines. This would help you predict projects with a great chance for success.
What to Look Out for in a Whitepaper?
Reading a whitepaper sounds like a huge task. But, it can save you from loss. Here are some things to look out for when reading a white paper.
- Token supply: this is something you want to pay attention to. The tokenomics of a token are crucial in determining its potential.
- Token allocation: look out for how much of the token is going into the project’s development and how much the founding team members are allocating to themselves. This would let you know if the project is just a get-rich scheme for the team.
- Token utility: the token utility would decide if there would be a high demand for the token. The big question to ask is “how do users of this token use it on the platform?”
Practicing these five trading rules daily will greatly improve your chance of success as a crypto trader. As we said earlier, habits bring structure to your craft as a trader. So instead of being taken unawares by the trends in the market, you can predict them from a distance.
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