The lockdown has very different consequences for our lives. Some have become more athletic and after weeks in isolation are doing more push-ups than ever before, while others have put on a few extra pounds and now have to think about how to get back to their old form.
But apart from physical fitness, there is also mental strength to be found. There is one area in which this is particularly effective. Trading cryptocurrencies requires a lot of knowledge. However, as a trader you are constantly moving in an environment that can change quickly and therefore poses continuous challenges.
With our "Lockdown Lessons", we want to teach you which tips you can best use in order not to go under but to be successful.
Concentration is key
Sounds natural, right? What many people like to overlook is the massive influence of our concentrative focus. Depending on the individual circumstances, we can only concentrate effectively for very short periods of time. The consequence can be seen quite well at schools and universities. Each unit must not exceed a certain amount of time. For instance, it makes no sense trying to teach mathematics to someone for 4 hours at a time. A students focus will get completely lost after 90 minutes.
So, we only have a certain pool in which we can tap in order to be really productive. In trading, this can have a huge impact on our decisions. If we are not rested or busy with the same thing for too long, the ability to draw the right conclusions decreases.
Since traders, depending on their profile, carry out more or less complex analyses, it is advisable to consciously pay attention to your own concentration. Do you digress? Are YouTube clips or Telegram messages suddenly more interesting? Then it's time for a break, come back when you can stay focused.
Trading is a job
The first lesson has shown us that it is important to be focused. But there is a mindset behind that claim. Consider your personal trading as if it is your job. Sure, you are probably working full-time in another job. But that doesn't change the fact that you have to have the same ambition as in your day job.
A good piece of advice is to never spend more money than you're willing to lose. But just because you're willing to take risks doesn't mean you should lose your capital. Treat every cent and every Satoshi as if it were your job or your business.
Would your boss or the head of your department be happy if you were to deliver negative results? Probably not.
Your inner attitude to trading determines part of your success. Only if you think and act like a professional you can become a professional. It is therefore essential to give your activity the necessary appreciation.
Learn new things
Trading often makes a very technical impression on beginners. Charts, oscillators and other indicators are based on pure numbers. However, one component is also the human factor. Although this factor is calculable to a certain extent, numbers do not play such a large role here.
What moves your fellow human beings? Do they have work? Does the education system work? If not, what are the possible implications for society? These are very abstract questions. But since trading is also about long-term investments, you have to be able to formulate such questions and be able to answer them.
One of the most typical questions regarding crypto is whether an absolute crash would make Bitcoin a safe haven asset or not. If so, then an investment would not hurt. But what if it doesn't? How do you decide?
To develop and expand such ways of thinking is only possible through education. In all possible and impossible areas. Therefore, acquire knowledge outside of crypto in order to better formulate your own thoughts on the development of society and the markets. It is worth it!
Hear the Blockchain whisper
If you have been around for some time, you look at a project and know immediately whether a crypto or a token is good for something or not. Why? Well, besides the experience gained, there is a lot of specific education that you have.
To get an idea of how to evaluate the technology of new projects, you should understand two crypto in particular. Bitcoin and Ethereum have managed to leave serious traces so far. Many crypto are based on them or want to solve certain problems differently or supposedly better than both of them.
Whether they can do this or not, you can only understand if you understand the two originals. Another aspect is the token economy or “tokenomics”. Here it is usually a matter of assessing whether a utility token is also capable of representing a financially attractive use case.
Crypto have a huge potential when it comes to how they can be priced. Many traders dream of one day making the big move and riding rich towards the sunset. What many don't know: It doesn't work that way.
Someone may have been lucky once in a while, but the real pros in crypto trading are more concerned with what risks they take and how to keep it as low as possible. Crypto are highly volatile, so you have to be willing to take risks anyway. How much money do you risk per trade? How much potential do you see up and down before you make the purchase?
Believe it or not, you can lose money both ways. Either because the price drops after the purchase or because you do not hedge your profits optimally and sell at the right time. So be sure to sell your positions when your pre-defined goals are reached.
When it comes to the huge jumps, some of which promise a hundredfold profit, you should keep one thing in mind. If you manage to make it three times in a row, to quintuple your invested capital, then you already have more money than if you only hundredfold it once.
It doesn't have to be the moon shot. Especially since it is also much more likely to find opportunities where you multiply your capital by a lower factor, but more often.