For everyday work only a certain set of tools are necessary, which you will need effectively. Many things distract or have only little use in practice, which in the end banishes certain tools to the back of the desktop environment.
Trading is very similar. The sheer number of indicators and other technical tools is almost unmanageable. Even professionals do not use all options, although they have often gathered knowledge through their years of practice and have at least basic knowledge about the tools and how to use them.
In the end they reduce their own strategies and procedures to what works best for them and promises them money in the long run.
Which things should guide your focus during trading? And what should you restrict yourself to as a beginner in order not to be completely lost?
Take one step at a time
A valuable support is not to start too many things at once. You want to understand trading and be successful with it. There are many guides, instructions and gurus who can quickly overwhelm you with all the information.
Dedicate yourself to the basics first. Do you know how to make deposits and withdrawals? Do you understand the fees and order types? Can you safely use and master the basic functions of cryptocurrencies?
If not, these are your first steps. However, the essential point is not where you are on your journey, but that you pay the necessary attention to the individual aspects of it. For example, how often do you read that a user has lost his seed, even though he should have known its importance?
The reason why these things happen in crypto trading is always the same. The affected people skip important learning steps in order to go directly into something they don't even understand. So, take your personal state of affairs and ask yourself honestly:
What have I understood?
To help you with this, we have prepared some tests. If you have gaps, you can fill them directly using the articles in our blog.
Once you've mastered the basics of the different areas, you'll be able to have the success you want without stumbling over your own weaknesses.
Respect the trend
Besides this very general, but nevertheless important advice, there is probably a rule that every trader knows. The trend is your friend! Since you should give your friends a certain respect in real life, this probably also applies to the trend.
The reason for this is quite simple. You cannot change the market. If, for example, the market suddenly has an extremely positive mood with regard to an asset, there is no point betting against it. There will certainly be another turning point, but generally speaking, if you go against the prevailing trend, you often have very bad cards.
But how do you know when the trend is changing?
That is probably the question of all questions. Before one can devote oneself to this highly speculative art, one should first be able to recognize and name the current trend. In general, there are three basic directions in which the market moves.
If it moves permanently downwards, then we speak of a bearish market. If the market is continuously rallying, we speak of a bull market. And a market that has been sideways for a long period of time, moving between two highs and lows, is called a ranging market.
What helps you to identify a trend we have summarized in this article.
Stick to your money like glue
Profits are extremely tempting and probably the reason why most people are interested in crypto. If you could go travel back in time, you would certainly use the detour to buy Bitcoin for a few cents per BTC.
Since this opportunity is irretrievably gone, many traders speculate on the rise of Altcoins. However, an important rule to remember is not to make more money, but not to lose money. Of course, in order to make speculative profits, you have to take a certain amount of risk, otherwise it won't work. But to put all your eggs in one basket can quickly become expensive and go wrong.
So, there are some strategies you can use to manage your risk a little better. While this does not protect you from losses, it does assure you that you won't take a complete hit if something doesn't work out.
This is also called Risk-Reward Management, which helps you not to take too high a risk if the expected profit does not match. How this works exactly, we have prepared for you in another article.
In addition, you need an appropriate Money Management. This should not only be characterized by risks and prospects of profits, but also take your individual situation into account. This includes your overall situation, your income, your liabilities and how you are financially positioned.
As we are not allowed to give financial advice, this part is left to you or a professional advisor. We can only give you one very general rule to follow. Never risk more than you are prepared to lose completely.
Crypto are very volatile and carry a high risk, up to total loss. You should be aware of this in advance so that there are no unpleasant surprises.