So you want to become a Bitcoin trader? Despite how it may appear on Twitter, there are very few people who have the tools in their locker to make it as a successful trader. There are however a few tips that can help if you are interested in the field. Here is what you need to know if you are thinking of becoming a Bitcoin trader.
Don’t invest more than you can afford to lose
The first tip doesn’t involve any trading tools but is the most important. Don’t ever invest more than you can afford to lose. Simple, right? Yet some traders are extremely arrogant or greedy. Whilst you may think making $500 would be amazing, your brain can play tricks on you. Imagine if that was doubled, or tripled? But then you need to invest more money.
In one fell swoop you can lose all your hard-earned savings trading Bitcoin thanks to the volatility of the markets.
Alternatively, you can play with small amounts of money that you are willing to lose. If you win, then it is a bonus. View it as you would a casino. The odds are not stacked in your favour, but you can always have some fun playing in the hope you get lucky.
Gambling is a lot like trading Bitcoin, so always play it safe.
Research, research, research
This point cannot be stressed enough. Supposedly it can take anywhere between 6-10 years to become truly great at something – the equivalent of 10,000 hours.
Learning the techniques of trading Bitcoin is no different. If you dive in without knowing the basics, you will be a lamb heading to the slaughterhouse. Successful traders have spent years refining their skills and learning from their mistakes.
There are many who will offer you tips and guidance, usually for a price. Unfortunately, in both forex markets and cryptocurrency markets, these businesses rely on luring in suckers and making their money not off of their own trades, but off of people subscribing to their service. If you are looking for a shortcut into the world of trading, you will be hard pushed to find a legitimate one.
There are however many useful books that can give you hints and tips. You can then mould these into your own techniques to create a system that might work for you.
Learn to deal with setbacks
You are going to get rekt. There is no two ways about it. Everyone goes through this. How you cope with the situation will highlight whether the life of a Bitcoin trader is for you.
Perhaps you will react impetuously and dive straight back in. This is probably not the wisest of moves. Instead, there are great lessons to be learned in becoming rekt. Analyse where you went wrong and see what mistakes you made before diving back in. If you are becoming rekt on a consistent basis, then being a Bitcoin trader is definitely not for you.
To deal with setbacks, you need to be able to control your emotions. Emotion can play a key role in whether you succeed as a Bitcoin trader. Let your emotions take control and you will make rash and unwise decisions.
Human psychology
When you see a market full of green, it can be tempting to think that the good times are never going to stop. Unfortunately, they always do at some point. As a Bitcoin trader, it can be useful to become counter-intuitive.
Remember, you are going to be trading against other people most of the time. When everything is going well and cryptocurrencies are green, then it is probably a good time to sell. When things are going terribly and everyone wants to sell, it is likely that is the time to buy.
Life as a Bitcoin trader
Whilst there is definitely money to be made in this industry, life as a Bitcoin trader isn’t fun and games. Days will consist of staring at a computer screen for hours on end. The market never sleeps, so to make the most of it, you need to be on call 24/7. The life can be lonely, dark, and quite frankly boring. These are issues that you need to be aware of before taking the plunge.
Conclusion
The life of a Bitcoin trader is not for everyone. Indeed, there are many in the industry who claim to be expert traders but still have their training wheels attached.
If you are considering taking the plunge, ensure you have completed your research, and if things do not work out too well, don’t be afraid to bail on the idea.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.