When it comes to trading Bitcoin, there are several lessons that one can learn. As a beginner, it’s important to start trading on a paper account rather than using real money. This will help you avoid the fear of losing money, which can often cloud your judgment and lead to poor decision-making. As renowned trader Jesse Livermore said, “The speculator’s chief enemies are always boring from within. It is inseparable from human nature to hope and to fear.”
Before making any trade, it’s important to verify the trade and check different time frames to confirm the direction of the trend. This will help you avoid going against the market and the big money, which can lead to losses. As fund manager Paul Tudor Jones said, “Don’t be a hero. Don’t have an ego. Always question yourself and your ability. Don’t ever feel that you are very good. The second you do, you are dead.”
In addition, it’s best to avoid trading in markets that are zigzagging as it can be challenging to hit your target in such situations. As trader and author Mark Douglas said, “The market is not your enemy, it’s not your friend. It’s just a neutral force, and you have to learn to work with it.”
It’s also crucial to know your limits and have a plan in place. Make sure you know the maximum amount you can purchase, the total daily loss you can incur, and the maximum loss per day on a position. Additionally, have a daily target in mind, and stop trading once you hit your daily loss or gain limit. As renowned trader George Soros said, “The financial markets generally are unpredictable. So that one has to have different scenarios… The idea that you can actually predict what’s going to happen contradicts my way of looking at the market.”
When computing the daily price range and volume, take the high, subtract the low, then divide by the low to get the daily percentage. This will help you position yourself to prevent getting stopped out. It’s also a good idea to plot the recent accumulation and distribution range. The safe range to operate in is the middle 1/3, which will help protect your gains. As trader and author Alexander Elder said, “The goal of a successful trader is to make the best trades. Money is secondary.”
Finally, it’s important to have patience and not be in the trade all the time. Set an alert to notify you once you reach your price target, rather than constantly checking your trades. As trader and author Jack D. Schwager said, “The key to success is emotional discipline. If intelligence were the key, there would be a lot more people making money trading.”