We all want to make obscene amounts of money in the market.
But to do so, we have to establish a plan, and actually stick to it. Without a plan, you’re really gambling instead of responsibly trading and investing.
Here are some of the key steps to creating a plan for long-term success.
Tip No. 1 – Create a Cryptocurrency Watch List
A watch list is simply a list of potential cryptocurrencies you may or may not be interested in trading at some point. It can range from a couple ideas to dozens. But I always suggest keeping the list small so you keep from overwhelming yourself. Wait for a particular stock to meet your personal criteria before blindly throwing money at it.
Tip No. 2 – Check the Fundamental and Technical Signs
Always be aware of what’s happening to your favorite coins, and the overall market.
Keep an eye on what the U.S. SEC, or global community is doing with regards to coins, and how that very news can impact coins. For example, in early April 2019, we learned that the International Monetary Fund and the World Bank launched a cryptocurrency.
They did so to understand the technology behind cryptocurrencies, such as smart contracts, distributed ledgers, and potential challenges. This was seen as a bullish sign that the global community is serious about the future of cryptocurrencies and blockchain.
At the same time, we want to keep an eye on technical indicators, as we noted with Binance Coin (BNB) not long ago. By simply watching Bollinger Bands (2,20), MACD, and Full Stochastics, we were able to spot a potential pivot just under $10. Since then, the coin has exploded to $19.
Learn How to Spot Unique and Predictable Patterns in Cryptos
Tip No. 3 – Have a Stop Loss in Place Always
As an investor, you should be familiar with a stop-loss, or the order given to a brokerage to sell a position once it drops by a certain amount or hits a certain level. You can also use a trailing stop-loss, which adjusts higher as the price of an asset rises, thus allowing the investor to lock in gains. For example, if a long position were bought at $10 with an initial 25% stop-loss set at $7.50, the trailing-stop would rise in tandem with the asset.
Tip No. 4 – Be Mentally Prepared
Success is not always a guarantee. But if you have a plan in place, you increase your odds significantly. A trader with no plan for action has already lost. Do you know when to exit on an up or down move? What stop losses or trailing stop losses do you have in place?
Know these things, and set a plan so you won’t run into “crash and burn” scenarios as often as those with no plan.
Pros know when to just walk away from a trade. Remember, stocks don’t just move up. They also come down. With technical markers in place – such as with MACD and Bands – traders can better pinpoint where things could all fall apart.
Lower expectations. Inexperienced traders expect to quit their day job and make a fast-paced, hot lifestyle out of trading. That’s not going to happen. No one ever became a brain surgeon or rocket scientist first year in. The same applies to trading.
If you make a mistake, learn from it. Don’t repeat it.
Remove all emotion from your trading. That doesn’t mean you have to have ice flowing through your veins. It simply means you need to re-think your strategy. No matter what your emotion says, never allow emotion to dictate your trading action.
Never wait to take profits. If you have good profits in hand, take them. Exit half of the position and let the other half run. But don’t leave profits on the table for too long.
These are just a few ways to plan ahead.
Make a mental resolution to follow each. And over time, you may improve your game.
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