How do I earn money with Bitcoin? Where is the money in the crypto world? The answer: You need rules. We have gathered from countless Trading literature, the most delicious of wisdom, screened and baked for 11 Golden rules.
1. There is no Win-Win Situation in crypto trading
Remember the seesaw in the schoolyard. Two children on swings. There are two States: Either a child is below and the other above. Or hard to balance right in the middle. How it works Trading. Sometimes nothing is happening and the courses balance hard in the middle. However, every Time a Trader makes a profit, suffered by the other a loss. The rocker may not be the same on both sides at the top. Simple Physics. The question is: Why do you think that your better than your Opposite number?
2. Crypto-trading is war
In state-organized Fighting there is the concept of “fog of war”. The field commander sees the whole map, but only what is in front of his eyes. He needs to decisions with incomplete meeting information. So is it also in the Trade. Individual traders are always on the wrong side of the asymmetry. There are so-called whales – you have so much crypto that you can change with a Trade course. However, only the whale knows when he does that. If a (real or fake) news drives up the price, then we learn it’s usually too late. In the Trade those who win, the essential Information beforehand.
3. 50 plus 1
Again, the rocker. There are only two relevant States, which can take a course will rise or fall. This is a 50:50 thing. If we allow a monkey to trade, then the likelihood is that he is right at exactly 50 percent. No one is 100 percent correct. There is no System that can say to an irrational and always manipulated the market. The goal of every trader is to be at least 51 percent correct. Every Trader needs to have the frustration tolerance to lose 49 out of 100 Trades.
4. Think is (unfortunately) Everything
The System is so mathematically, our Belief in magic and fate comes to us always in the way. Example: A Coin is being pumped and is reaching dizzying heights. We know that it is actually too late to get on the bus, do it but still afraid to miss something (FOMO). Or we see patterns where there are none. There is a private field of research in psychology: Bias. Result: no one is rational. To believe that we act rationally in the market, is a mistake.
5. The error You’re
The market is always right. If the market doesn’t behave the way you have it calculated, you are just wrong. Always and forever. Amen.
6. The 80/20 rule of crypto trading
The good Trader will make money with 20 percent of your Trades. The Rest is either a draw or a loss. If a good Trade brings in 16 percent of profit, then it is allowed to bring a bad average of -4 percent. This ratio can be achieved with a Stop-Loss. You can also calculate whether you are in the sum of profit. In addition, you can see then, that a Trade with a three percent profit is, in reality, no profit.
7. Beginners lose in crypto trading, because they:
- too much money
- without the Knowledge of trading, so to speak, playing the lottery
- Hold positions for too long
- with cheap Shitcoins to trade
- with other people’s money play
- your profits get never
- to often to trade, so even mediocre Trades try
8. You invest in what you understand
Informed you, before your Coins buys. What is the make? This is useful for you? Or, at least, understandable? The better the product is, the more likely the price will increase in the long term. This advice also means that you should trade no Shitcoins.
9. The differences of crypto – markets
- Crypto-markets does not sleep, they are open 24 hours a day.
- The cycles between euphoria and Depression are the factor X shorter, crypto trading has Warpspeed. If a stock market is “bearish”, then you can do a couple of weeks and months of break. In crypto it is in the next week.
- The volatility – price fluctuations – can be made with smaller Altcoins already 30 percent in one day. Traditional media are, for example, is too slow. If it is, that a certain Altcoin is fallen in the last few days, around 30 per cent, the Situation has changed, if the editor gives the article in the print.
- Stock traders think in percentages. Crypto traders think in terms of x (in the Form of the x-Fold).
- Everywhere illegal things such as Insider Trading to happen. But in the unregulated crypto-world, it happens more often and the effects are greater. Lead in knowledge pays for itself in crypto.
- Technical analysis can work in the crypto area well, because the market is small and many analysts are on the go. If a lot of people act according to the same results, then the forecasts will occur.
- Outside the Top 20 you should not make any large purchases or sales (greater than 1,000 Euro). In the case of low trading volume, the price between the first and the last Euro deteriorates.
10. Make 100 bad Trades quickly
The only way to increase the chances of winning, is real-world Trading experience. Books help read. With play money do not trade. The only real Trading with real money brings experience, insight, and success (if at all). Start small. With 100 euros to start. If this is doubled, you can shoot another 200 Euro. If the 400 is doubled, then repeat the game. And with only so much money trading that it increases the pulse. Nervousness is bad for business.
11. Less of technical analysis (TA) is more
Learning: Moving Averages, Stochastic, RSI, Trend Lines, the Basics of Candle Sticks, Upwards & Downwards, Channels, Bull Flags, Breakouts, and Wedges. TA, you can zoom in””, they can be formed from daily, hourly or minute-by-minute values. The shorter the period, the more error-prone pattern. Not looking for in minutes, what can you discover in hours.