We’ve touched on the subject of altcoin trading and it’s worth taking another look at it right now. Trading altcoins is an exciting prospect to many because there’s a lot less red tape to deal with than with traditional investing and trading.
It’s easy to be an active trader of altcoins with very little start-up capital. It’s also possible to gain big returns in short periods of time. The lure of relatively easy money with less restrictions and smaller capital requirements is enough to get most people giddy with excitement at the prospects of diving in. Before you decide to jump in feet first, become aware of the peculiar intricacies of this unique trading opportunity.
Don’t Risk Money You Can’t Afford To Lose
This wisdom bears repeating because it’s always true. Don’t trade altcoins with money you simply can’t afford to lose. In fact, try and not put any cash in at all at first. There are various ways to get your hands on altcoins and Bitcoins that don’t take much real effort. Scrape up a grub stake of coins that way first and then place them on an altcoin exchange.
When you trade altcoins with money you can afford to lose it removes most of the stress from the experience. Don’t kid yourself, the biggest psychological barrier to trading success on any platform is the fear of losing money. If you can mitigate that fear to some degree, it increases your chance of performing better than your rivals.
Keep this rule in mind and don’t go overboard. Yes, you can make big money trading altcoins, but it’s much more probable you will LOSE!
Set Your Rules And Stick With Them
I covered this concept in a recent post. There are numerous rules you can set as an altcoin trader, mainly dependent on your personality and goals. The key isn’t what the rules are. What’s important is that YOU follow your own rules closely. Trouble comes to traders who improvise.
Plan your trade and trade you plan. When you do this, you eliminate those emotionally upsetting moments when you’re forced to make a split decision that’s not based in reality but is rather borne from emotions. If you follow a simple rule-set, you can distance yourself from your emotions and do what you planned on doing all along. Then you can simply ‘rinse and repeat.’
Hunches and gut plays CAN and DO work - but only sometimes. It’s really easy to blow a trade because you’re winging it. Great traders set their own rules and follow them. You would be wise to do the same.
Increase Your Capital
The best case scenario for trading has you constantly making successful trades and then using the additional capital to make bigger and bigger trades. Discipline comes in handy here. If you have the wherewithal to keep making your trading capital increase the advantages imparted on you will be amazing.
In the altcoin world ‘whales‘ are people with a few thousand dollars! A group of five people with two thousand dollars can move all but the busiest altcoin markets. Having capital at your disposal gives you a big advantage over the many ‘small fish‘ who make up the world of altcoins.
Make it your goal to constantly add to your trading capital base. You should be able to do this because you’ve been picking consistent winners.
Know What You’re Buying
It’s up to you to track down information about any cryptocoin you’re interested in buying. Check out the coin team’s Twitter and Chat if they have one. Find out exactly what’s new, unique, and exciting about their coin. If you don’t have up-to-the-minute information and you can’t easily track it down you’re better off not placing a trade.
Altcoins can lose value very quickly. It doesn’t take much for the public to lose faith in a cryptocoin. Once they do, the downward spiral is assured. You don’t want to find yourself caught in a negative situation like that. Once you enter a trade make sure you constantly monitor for news, gossip, and opinions about that virtual currency. If you sense a shift in public opinion towards the negative, prepare your exit! Exiting a trade is likely the most important factor that separates winners from losers in altcoin trading. You need to know when to exit when things have gone good and when they turn sour.
Always do a detailed investigation and know all the pertinent facts about a cryptocoin. If you don’t, it will probably bite you in the ass. That hurts!
Study The Market
Once you start trading alts you’re responsible for learning as much as you can about the market. Every bit of knowledge you gain will have a direct impact on your bottom line. Knowledge really is power when it comes to cryptocoins.
Not only should you know the market but it’s worth knowing the people involved. Altcoins still rely on people to achieve gains. Know what everyone is doing and what role they’re playing. You can easily get good information this way. Don’t be a shrinking violet. This is your money at stake.
Treat Altcoin Trading Like A Business
If you want to consistently make money on trading altcoins then you should treat your activities like a business. Keep good records of what you’re doing. Employ money management rules dutifully. Pay close attention to all the details that will allow you to succeed over the long-term.
Don’t underestimate the amount of work necessary to succeed in trading altcoins. There’s no get rick quick plan. Once you start trading you’ll realize that even with big gains it’s going to take tons of efforts to amass life-changing capital. If you plan on living off that money, it will come directly out of your trading capital! For someone to make a full-time living trading alts they need to protect their capital but still take enough in profits to satisfy their requirements. That’s more easily said than done.
I’m certain there are very successful traders who are accomplishing this right now. They have had to overcome the same obstacles that you will face and they managed to find a way to do it consistently. Even for them, nothing is guaranteed. If they lose too many times or for too much money at once, they’ll be right back at the beginning!
If you plan on trading altcoins for fun and profit the good news is you can start for almost no money down and learn the ropes as you go along. Thanks for stopping by and reading. Good luck! If you have any comments, please leave them below.