Seven Rules for Safe Trading on the Cryptocurrency Exchange

Consider seven simple, but very important and fundamental rules for trading on the Bitcoin and other cryptocurrencies market, which will help novice traders not to lose money.

In the wake of the explosive growth in the popularity of cryptocurrencies and the abundance of news in the world media related to digital money, a lot of people who want to play and earn millions have appeared on the exchanges. However, most of them suffer losses simply because they do not follow the fundamental rules of a highly risky game.

You can play on the stock exchange only with the money that you do not mind losing.

Never invest all your savings in cryptocurrency or take loans, which, sooner or later, will have to be repaid. The game for the last money cannot be calm, confident, and long-term. This means that it leads to hasty decisions and inevitable losses.

You need to buy cryptocurrency only when it falls, and sell it when it grows.

As in life on cryptocurrency exchanges “behind the whole planet” a crowd moves. In the long run, against the backdrop of independent thinking people, the crowd always loses. Therefore, you need to buy even before the start of growth, with a short or long-term fall, otherwise, you can fall into the trap of manipulators. And to sell assets, accordingly, it is necessary to grow, when the price reaches the second half of the expected peak. At the same time, being a beginner, you should not try to actively play on bounces. As a rule, this ends up with a lost profit after an unsuccessful sale or losses if the wrong moment is chosen for the re-purchase.

You should not try to catch only the minimum and maximum quotes.

The course is controlled by the so-called manipulators, whose assets allow raising or lowering the price by several tens of percent in just twenty minutes of active trading. They can also sow panic in the ranks of newcomers and control the level of falling, growth of quotations. The maximum level of growth or fall in the price of cryptocurrency depends on the large players, but even they, with all their desire, at certain moments, will not be able to guess the strength of the panic or positive mood in the ranks of the general masses. Therefore, there is no need to wait for the minimum point of decline and dream of instant growth to specific heights. As a beginner, it is better to fix profits at the “above average” level, otherwise, you may not have time to sell BTC at all.

You cannot play short distances at low trading volumes when there is not enough volatility.

The scanty trading volumes indicate that no one is playing except for bots. The so-called short-distance players are watching from the sidelines, waiting for the right moment. In such situations, when it is not clear what will happen next and even a relatively minimal purchase can correct the course, it is better not to join the mid-term game.

It is strictly forbidden to play in one direction for the entire bank.

A purchase for the entire available amount instantly takes you out of the game. Since the course is controlled by manipulators with millions of US dollars, and not by the crowd, and the medium-term dynamics of the exchange rate is poorly amenable to “technical analysis”, buying assets for the entire bank will easily turn a player into a long-term investor.

For absolutely win-win trading on cryptocurrency exchanges, it is worth dividing the bank into 4–8 different directions. It can be Bitcoin, Litecoin, forks, pairs or various currencies.

At the same time, it is best to place orders for no more than 2–3% of the amount allocated for each position. In the event of an unexpected dump, a fall in the rate, this will allow you to recoup with small purchases on the sink, even in the case of an initial purchase at the highest values.

For example, if the account has $ 1000 US and the Bitcoin rate fluctuates at $ 1000 per 1BTC, then a maximum of $ 250 can go to play on the BTC / USD pair. Suppose that manipulators purposefully inflated the price of BTC to a thousand dollars and at the most unfortunate peak moment assets were purchased by 3% of $ 250, that is, by $ 7.5. Immediately after the purchase, in the process of an active pump, there is a rebound to $ 920 for the BTC \ USD pair, during which you can actually buy another 7.5 $ bitcoins at the rate of $ 950. If, after a rebound, the rate continues to grow, then even without additional purchases, assets can be sold at $ 1050 or more, since the price during a pump on cryptocurrency exchanges always changes according to the same patterns.

If the price continues to fall, then it will be possible to continue buying bitcoins at certain price thresholds. Buying points can be $ 20, $ 40, or even $ 50 for a dip, depending on the pump’s history and the estimated drop level. Thus, even an erroneous purchase at the very peak before the dump will not become fatal, since having bought assets at $ 1000 there will always be an opportunity to buy off at the rate of $ 300, 450, or even $ 600 for 1 BTC.

In addition, the availability of funds after the wrong purchase will allow you to feel confident and make the right decisions, due to which possible losses are leveled and turn into profit immediately after the purchase at minimum values ​​and the sale during the rebound. Such a tactic will not bring a lot of money if there is only a thousand dollars in the bank, but it will help you learn how to play, feel the stock exchange, and not lose all your savings. And later, the acquired skills will bring good profit when playing at short and medium distances.

Strategies and orders must be recorded.

When playing at any distance, with the exception of long-term investments, recording the planned and executed orders for each direction will help to calculate the average purchase price and form a selling strategy at a certain stage. The exchanges have a history of completed orders.

You should not listen and believe in what is written in the exchange chat.

The vast majority of forecasts in the chat are formed based on personal expectations or technical analysis, trends that most often do not work on the cryptocurrency exchange. Forex strategies and all analytics from world famous exchanges with multibillion-dollar turnover do not work in the cryptocurrency environment simply because one player with $ 25 million can raise or lower the rate by 20% at the right time in just 45 minutes. Accordingly, any form of analysis and forecasting can become erroneous due to one single player, a hacked wallet, fictitious news, and other factors from a number of force majeure. And if something with 100% probability may not work, then at high risks it will not work at all.