{"id":142527,"date":"2019-02-25T16:18:52","date_gmt":"2019-02-25T21:18:52","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=142527"},"modified":"2019-02-25T16:18:52","modified_gmt":"2019-02-25T21:18:52","slug":"cryptocurrency-trading-hacks-for-newbies-pros-alike","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/02\/cryptocurrency-trading-hacks-for-newbies-pros-alike\/","title":{"rendered":"Cryptocurrency Trading Hacks: For Newbies & Pros Alike"},"content":{"rendered":"
February 25, 2019<\/div>
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By Sarah Pritzker<\/b><\/p>\n

Cryptocurrency is the bipolar of the trading world. The volatility is insane; you\u2019ll see major swings from 12% to 300% in a single day! With movement like this, it can be hard for anyone, let alone a newcomer to the cryptocurrency exchange, to make heads or tails of the market. Good news is there are a lot of people doing research on this exact topic (like us!) who can help you figure out the best way to turn a profit when cryptocurrency trading.<\/p>\n

So, if you\u2019re in the mood to make some money but can\u2019t make sense of all the cryptomarket lingo, check out some of these cryptocurrency trading hacks (spoiler, there are hacks for novices and experienced traders, so skip the first few if this isn\u2019t your first rodeo).<\/p>\n

Cryptocurrency Trading Hack #1: Start at the beginning<\/strong><\/p>\n

If you\u2019re a newbie to the world of cryptocurrency trading, then the first and most important hack you can hear about is to learn! Jumping in without knowing what you\u2019re talking about is a guaranteed recipe for disaster. So, before you put your money where your mouth is, get educated. Understand the market, terms, and trends. Know what terms like falls, rises, volatility, and swing trading mean. Understand what blockchain is and how it helps. Learn the different trading strategies and when to use which.<\/p>\n

Dylan from Six-Figure Marketers Club put out one of the best beginner\u2019s cryptocurrency trading strategy videos<\/a>. It starts at the beginning and proceeds to walk you through all the basics you\u2019ll need to start trading bitcoin. The best part of this video (and all his videos, really) is that he speaks English clearly! You\u2019d be surprised how difficult it is to find a good cryptocurrency video tutorial by a native English-speaker, so Dylan\u2019s stuff is really golden.<\/p>

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What\u2019s more, Dylan explains everything clearly, so you will really walk away from this video understanding the ABC\u2019s of cryptocurrency trading. As they say, knowledge is power!<\/p>\n

Cryptocurrency Trading Hack #2: Only invest what you can afford to lose<\/strong><\/p>\n

Ok, this one doesn\u2019t seem like a pro tip, but if you\u2019ve ever lost money in any investment platform, you know that sticking to this rule is key. Picture this: You invest a large sum of money, probably more than you can really afford, but it\u2019s ok because your broker ensures you that this is a solid bet. Lo and behold, the market swings the other way, and you lose everything you\u2019ve invested.<\/p>\n

You\u2019re devastated, heartbroken, and what\u2019s more, you\u2019re broke. Now, what do you do? The smart investor walks away, but that\u2019s not everyone. Too many people get the itch. I\u2019ve come this far, I\u2019ve invested so much. I can\u2019t turn back now. So, they invest more and more and keep sinking in deeper and deeper.<\/p>\n

This is a dangerous game you don\u2019t ever want to play, so make sure you don\u2019t even start your game strategy this way. Set a certain amount of money you\u2019re willing to invest, and make sure that is only money you can responsibly afford to lose. This way, if you lose it all, you\u2019ll still be able to pay your bills, make rent, and take care of your regular obligations without feeling any pressure. If you make a profit, that\u2019s great! Go ahead and invest some of that too.<\/p>\n

Cryptocurrency Trading Hack #3: Use the right software\/tool\/trading platform<\/strong><\/p>\n

Up there with knowing what you\u2019re doing is knowing which platform to do it on. The right platform will give you the best advantages when trading cryptocurrencies. You\u2019d be amazed at what a difference a convenient and smooth mobile app makes. Other features to look out for when scouting platforms include what type of security the exchange offers, the exchange, trade, and deposit-withdrawal fees charged.<\/p>\n

Cryptocurrency Trading Hack #4: Using the MACD Indicator for buy and sell signs<\/strong><\/p>\n

I think this is one of the best beginner\u2019s strategies. MACD aka moving average convergence divergence scale is an indicator that follows the momentum of an asset based on the movement of two averages of the security\u2019s price. It sounds much more complicated than it really is (and if you\u2019ve never used it before, let B from Your Altcoins show you exactly how it\u2019s done<\/a>), but once you play around with it, you\u2019ll see just how simple it is.<\/p>\n

Basically, following the MACD indicator will show you when is the best time to sell your investments (it can also show you when is a good time to enter or not enter into an investment). There are different settings like you can micromanage down to every five minutes or let it go for days, so play around with it to see which ones you like best and which are most successful for you. Toggle the different timeframes, how often it displays, etc. until you find the groove that works for you.<\/p>\n

Regardless of which settings you use, the MACD indicator will show you two lines, one showing rise and one showing fall. If you follow these two trends, you\u2019ll be able to see clearly when to sell to make the most profit. Try it out, you\u2019ll be amazed at how easy this one is.<\/p>\n

Cryptocurrency Trading Hack #5: Use Momentum<\/strong><\/p>\n

Momentum is a pretty simple concept: if things start going up, they keep going up. And when things start going down, they continue in that direction too. In general, the strategy works using this logic. Momentum says to buy a week after a currency experiences an upward trend (20% or more), and then sell a week or so later.<\/p>\n

Of course, this isn\u2019t always the case (see the next few hacks for a solution to this strategy loophole), there are plenty of times that assets will keep climbing and you\u2019ll kick yourself for having sold, but at least you\u2019ll make some profit off of the currency using this strategy. Plus, you\u2019ll be really happy if the asset drops suddenly since you won\u2019t have lost everything in one fell swoop.<\/p>\n

I thought this was a great video<\/a> for clarifying momentum. It\u2019s only 15 minutes, but it explains the strategy pretty clearly. What\u2019s more, this video is solidly backed by real research done by Yale University studies and findings. So, the information is really something you can take to the bank.<\/p>\n

Cryptocurrency Trading Hack #6: Take profits\u2026<\/strong><\/p>\n

One of the biggest mistakes that investors can make is not taking profits when they see a rise. It\u2019s natural for you to want to hold out for a bigger gain, and that\u2019s fine. But with such a volatile market and such rapidly moving changes, it\u2019s just a bad idea to keep everything in for the big payout. If you want to see just how far you can ride the gravy train, by all means, go for it. Just do yourself a favor and take your profits out first.<\/p>\n

If you\u2019ve invested $1,000 and you see a rise, and your investment is now worth $1,200, take that $200 gain as your profit. Then if you want to leave the initial $1,000, you haven\u2019t lost anything more than what you originally knew you could lose anyway. Either way, you\u2019re still up $200!<\/p>\n

Cryptocurrency Trading Hack #7: \u2026But don\u2019t take out everything<\/strong><\/p>\n

Ok, so you want to make sure you take out your profit before the asset loses its value, BUT you don\u2019t want to take out everything, and that\u2019s the next cryptocurrency trading hack. Basically, you want to take out your profit and leave the rest. Why? Because when an asset goes up in value, it\u2019s the time to make your profit. Yay!<\/p>\n

But there are so many times when a currency rises\u2026and then continues to rise for quite some time. If you sold early on, you\u2019ll be kicking yourself for months or even years that you didn\u2019t hold out for a bigger slice of the pie. This CryptoLand video <\/a>explains this concept really well, so if you want to learn more about it, check it out.<\/p>\n

Cryptocurrency Trading Hack #8: Use MTP Properly<\/strong><\/p>\n

Modern Portfolio Theory<\/a> (MPT) basically posits that you set aside a certain amount of money that you are willing to invest (i.e., lose) and buy an assortment of assets consistently regardless of the price. The reason this works is because the assets aren\u2019t directly correlated, so you aren\u2019t going to feel the pressure of all your assets moving in the same direction at one time. A good spread of assets could yield an excellent return over time.<\/p>\n

The real hack here is to use MPT properly. That means diversifying your assets across markets, not just sticking to cryptomarkets. Why? Because all cryptocurrencies are too highly correlated right now to be considered varied enough to protect you against the risks.<\/p>\n

Cryptocurrency Trading Hack #9: Breakouts<\/strong><\/p>\n

Breakouts are one of the most popular investment strategies (whether you\u2019re buying low or selling high), and here\u2019s a quick video<\/a> that\u2019ll tell you everything you need to know about it. Chris just has a personable air to him, but more importantly, he tells you all the right information in simple terms that anyone can understand. Plus, Chris actually makes trading sound like fun, so check it out!<\/p>\n

Cryptocurrency Trading Hack #10: Make sure you\u2019re secure<\/strong><\/p>\n

This last one also seems like a no-brainer, but you\u2019d be amazed at how many people operate in this mode (scared face emoji!) Cryptocurrency trading is somewhat of a wild wild west of exchanges, and that means there are a lot of people looking to take advantage of you. There are plenty of built-in security features, but you\u2019ve got to do your part to keep yourself and your investments safe too. When trading, make sure:<\/p>\n