Beyond bitcoin, there are still hundreds of altcoins on the market. Their price vary a lot, from dozens of dollars to less than one penny. Their market are in chaos and completely unregulated. Their price could be easily manipulated, dumping and pumping is normal. To survive in this tough market, there are a lot of knowledge or experience needed to learn by traders, who always cost a lot to lean the lessons. Some of them may leave this market.
No matter they are short term day traders, or long term investor. They must have their own consistent trading rules implemented, make their capital grow up and know the ways to avoid potential loss.
I will present three kind of successful traders below.
1. short and middle term traders
They have a lot of trading experience, are good at technical and fundamental analysis, can be able to apply their trading strategies consistently. They keep watching the chart. They are calm and have the discipline, couldn’t be affected by others’ ideas or sudden market movement. They never trust the rumors, have the capability to know what the market sentiment is, further to gauge what the market is feeling. Upon the opportunities and risks, they are proactive to make trading decisions or cut loss.
They are observing the news related to bitcoin all around the world every day, especially the news driving the movement of the price (such as Brexit, American Presidential Election, ETF approval etc)
But for most losing traders, they don’t spend time to learn the knowledge (technical or fundamental analysis), don’t learn from the mistake, have no strong mind and no capacity to face challenges. They think they have known a lot, act to be overconfident and will be lucky to make a lot of money from trading in their dream one day. However, when they realise their mistakes, they will lose a lot.
2. Long term traders
They have other source of stable income , very busy and don’t make a living from Bitcoin trading. They don’t have spare time or energy to watch the chart and read news, so they are unable to do the trading frequently. (This probably is a good habit, they don’t care about the price movement and the bumping or down trending price wouldn’t affect their mood, which prevent them making irrational trading decisions)
Long term Bitcoin holders are never enticed by quick profit, are comfortable with current holding! They never gamble or speculate what will happen tomorrow! what they care about is when to enter the market and when to exist ( they know their price target).
They have learnt some investing knowledge and have the ability to do basic technical analysis although not as good as professional traders.
What they are lacking is the knowledge of Bitcoin fundamental analysis, to know how the upcoming government policies and market sentiment affect the price.
They implement simple trading rules, buy low and sell high. They choose the lowest entry level on a large time frame. Every month they listen to the news and other traders’ experience.
3. The mindset of long term holders
In some unexpected events, the Bitcoin price could crash suddenly, they are excited to know this is great opportunity to enter the market.
When Bitcoin is traded at the historic low level and fluctuates at limited range, leading media or individual don’t talk about Bitcoin. Traders are leaving Bitcoin market. The long term holders will come out and buy up Bitcoin with at least more than 50% of their trading capital. Afterwards they still buy Bitcoin bit by bit on a fixed time range to average their holding cost until to fill up their portfolio.
After buying Bitcoin, they don’t frequently watch the price. They will check the price and volume once in a month, then make further trading decisions. When most of people are talking about bitcoin, especially the one who never trades bitcoin starts to buy it, it means bull market is coming. They know it is the time to sell out bitcoin.
Greed and fear is human inherent emotion. No one is born to be able to control them and have to learn to separate them from making investment decisions. For the determined and strong mind traders, they could learn to be the first type of traders and overcome the negative emotions. But the second type of traders are more easy.