Over the past decade, the world of cryptocurrency has grown exponentially, with thousands of companies getting in on the game. An increasing number of people are jumping in with both feet and becoming crypto traders. While many of them are seeing success, in such a volatile and unpredictable market, success is not guaranteed. So, what qualities do you need to succeed in the crypto world? Here are seven crucial ones.
Cryptocurrency is no ordinary investment. Compared to conventional stocks and shares, it’s highly unpredictable. If you want to invest in crypto of any kind, you can’t just naïvely assume that you can simply put your money in and watch your fortune grow. In fact, anybody who does that (unless they’re absurdly lucky) will likely lose all or most of their investment.
Doing your homework and making sure you’re aware of the different coins, and their respective risk and reward levels, before you put in a penny, is essential. So is having a clear idea of the amount you’re prepared to put on the line, when you should cash out, and when you should cut your losses. Most important: once you’ve made your plan, stick to it. Don’t make impulsive decisions.
Meticulous record-keeping is essential for any serious trader. All your activities, as well as their results, need to be written down for future reference. There are two basic reasons for this. Firstly, if you have a record of your profits, losses, and how these relate to your targets, this will keep you accountable to yourself and less prone to impulsive decisions that deviate from your initial plan (see above).
Secondly, this record will help you with future investment plans. The clearer you are on what you did, what worked, and what didn’t, the better you will be able to refine your methodology for your next investment. You’ll be able to build on your successes, and hopefully cut out your mistakes. If you’re unclear on what went right and what went wrong, you will never become a better trader.
Speaking of becoming a better trader, here’s a crucial quality for that. All trading-related information is potentially valuable, no matter where it comes from. The moment that a trader becomes so convinced of their own expertise and knowledge of the market that they start to ignore information from people they consider “less qualified,” they shrink their potential knowledge base. You might think you know more than someone, but that doesn’t mean they’re not privy to crucial information that hasn’t reached you yet.
So, don’t discount anything that any other trader—no matter how junior—tells you, without at least looking into it. Maybe nine times out of ten the information turns out to be inaccurate. That’s fine—no harm done. But if you sleep on that tenth time, it’s your money on the line. If you keep an unbiased, humble mindset and are always prepared to learn and aggregate your knowledge base, you will continue to boost your trading expertise.
Don’t just focus on the coin you’re trading–that’s a recipe for disaster. If you’re an altcoin trader, you need to have holistic knowledge of the whole crypto ecosystem–especially Bitcoin. Still the world’s number one coin for market cap, Bitcoin is a determinative cryptocurrency for the whole market. A significant shift in the value of Bitcoin will have an impact on any other coin that you might be trading.
That means that if you’re trading any altcoin, no matter how detailed and well-researched your plan is, you need to keep a watchful eye on the price of Bitcoin. It may be that, based on your technical analysis, your coin is expected to go up, but there happens to be a drop in the value of Bitcoin. That will almost certainly have an effect on the trajectory of your altcoin, and it might even turn a rise into a fall. Always keep an eye on the BTC chart.
It’s essential to keep a cool, balanced mind while trading. There are two emotions that threaten to throw any crypto trader off balance: avarice and fear. Both of these can lead traders to abandon their carefully laid plans, risking disaster. Avarice, because when we meet our targets and the market is still going up, we naturally want to stay in the trade. However, long-term, this kind of thinking will harm you: what goes up must come down, especially in a market as volatile as crypto. Stick to your plan and take the profit.
Equally, when the market isn’t going the way you want it to, don’t panic. Crypto is especially prone to moments like this, and the media attention they sometimes get doesn’t help with the whole “staying calm” thing. You have a plan (well, you certainly SHOULD have a plan!), so stick to it. Losses always happen, but if you’re sticking to your plan and making smart trades, your profits will outweigh them. If you panic and abandon your plan, you’re far more likely to lose out, so don’t get spooked.
Crypto trading is a long-term pursuit. Yes, you’ll see stories about huge increases in the value of cryptocurrencies, but these mostly belong to the past. The name of the game is coming up with a long-term plan that enables you to accumulate money over months and years by making steady returns on your investments.
Making plans is one thing; patience is a crucial quality for executing them, and for adapting them to unforeseen changes. The market can be frustrating, not always moving in the desired direction–or sometimes the opposite: a seemingly golden opportunity can open up that wasn’t in your plans at all. The traders who deal with these situations the best are patient ones, who will analyze everything carefully before making any adaptations to their plan. People who make impulsive decisions might get lucky sometimes, but they will lose in the long term.
Finally, it’s essential to always be vigilant and look out for bad actors. You could be the most prudent, smartest trader with the best plan in the world, and still lose everything by getting scammed or hacked. Make sure you have a rock-solid cybersecurity plan and keep it up to date, and always be aware of scamcoins and know how to spot them.