6 Golden Rules to Become a Trader
Investors want to be proficient in trading and be able to make the right decisions in their trading positions.
For this, it is necessary to know the rules that a trader cares about and follows. In this article, we will provide information about the 6 rules necessary to become a trader and make more accurate investments.
Performing Technical and Fundamental Analysis
Before investing to become a trader, technical and fundamental analysis should be done about the preferred cryptocurrency. By making these analyzes, traders catch high probability price values for the future. In this context, they turn their investment positions into areas with the highest probability of making a profit. For technical analysis, the trend directions on the charts and the downward-upward lines should be checked. Cryptocurrency exchanges or analysts offer many opportunities for investors in this regard. You can examine the charts with the trend direction and decline lines published on a weekly, daily or monthly basis. When these are examined, if the ongoing downtrend of the selected cryptocurrency is seen, it is necessary not to insist on continuing the sale. On the other hand, supply and demand should be examined. If there is a high buying demand for the cryptocurrency, the price will increase, If the sales are increasing, it should be known that the price will decrease in the short term. However, a person who catches these details can progress to become a trader.
Following the Current Cryptocurrency News
One of the most important items in the concept of fundamental analysis we are talking about is crypto news tracking. Because positive or negative news can change cryptocurrency prices. It is not possible for a person who does not follow these news to become a trader. Not knowing the details about the agenda can lead to losses with a wrong move.
To give an example, Bitcoin recently broke a record by moving to the level of $ 60,000. During this time, everyone was very happy and there was an extremely optimistic atmosphere in the market. There were no issues with the market, with the trend direction. Everything showed that the increase could continue. However, later on, a statement came from Elon Musk and the news that Tesla would no longer accept BTC as a payment tool was reflected in the press. The news of this distant move from the world’s largest electric vehicle manufacturer caused BTC prices to drop to 30 thousand dollars. Those who did not follow the news that day and took investment positions, thinking that everything was great, suffered great losses. As you can see, only technical analysis is not always reliable. Even if the technical data is good, a news may break the market. The bitcoin trader should not overlook this.
Being Aware of the Features of the Project
A trader should know what cryptocurrency he-she is investing in. By what we mean, it is an expression that includes all of the subjects such as its purposes, advantages, disadvantages, in which areas it is used. Because the qualities of crypto money can be found very useful by investors and this can lead to an increase.
When we consider 2021, we see that now Pow mining has become quite obsolete. Everyone’s talking about the Pos consensus, and Ethereum started a 7-year program to move on to it. Because Pos supports coin production with less energy, protects our world and has an environmentalist model. Therefore, instead of the new generation pos consensus cryptocurrencies, which are the most preferred by corporate companies, Investing in an asset that is about to melt away can be damaging. As can be seen from this example, tracking qualifications is extremely important to become a trader.
Knowing the Bull and Bear Markets
To become a trader, it is also important to know some technical terms of the market. Suppose you are reading a very important market news and the phrase “bull market has started!” If you do not know its meaning, unfortunately, you will not be able to get an investment position accordingly. Therefore, it would be right to engage in research at the earliest and learn the market terms.
The bull market is a very active period. There are investors called market bulls, and these will cause the prices of cryptocurrencies to increase after a while with their buying demands. On the contrary, if you see that the bear market has started everywhere, you should know that there are price decreases in the market and that the months are on sale. Traders pay attention to these points as well.
Don’t Panic Selling
One of the most important characteristics of a trader is to suppress her-his panic. If a coin is in a downtrend, it won’t go to a sell order within seconds. He-She follows the market and handles all the items we have given in the top headings in the fastest way. In this context, it decides to buy or sell or remains stable. A panic sale without any analysis or news may disappoint the investor if there is a price increase.
Utilizing Areas to Minimize Losses
How skilled a Trader is at trading, Taking advantage of the blessings of the cryptocurrency world is just as adept. One of these blessings is known as staking. Statable and promising altcoins are locked online in wallets, allowing them to earn new coins at a certain maturity. Traders who acquire them can return to their deposits by taking advantage of their savings in case of a loss. It is necessary to be a trader to not only think about instant trading but also the future.
Being a trader requires attention to many details. The most important of these are the follow-up of current crypto money news and fundamental analysis. On the other hand, it is important to manage risks well and make alternative plans. By taking these into account, you can gain experience in investment within a certain period of time. One of the important things is to never invest money that will hurt you. Players who play with big money get much more stressed and can make wrong decisions.
Read more: How Crypto Signals make you a better Trader?