in cryptocurrency trading profession, you should always focus on the major currencies only. Trade the most traded currency pairs
Surviving in the crypto trading industry like a smart trader
Professional traders are always good at managing their risk profiles. They never risk too much money since they know it can cost them big losses. On the contrary, the rookies are biased to take more trades. They think by trading more they can earn a big amount of profit without learning the critical factors. Eventually, they blow up the trading account within a short time and quit trading. But if you have a look at the elite traders at Saxo, you will never follow the approach of the rookie trades. In fact, you will become more concerned about the trade execution process and thus you can trade in a better way.
To survive in the investment world, you should know some basic techniques. In this context, we are going to highlight some of the most prominent techniques which will help you to manage the risk profile and protect your capital.
Reduce the leverage
The rookies always trade with the high leverage account. To them, leverage trading is the most effective way to make a big profit from this market. But if you carefully assess the actions of the professional traders, you will notice that they are trading the market with a low leverage account. By choosing a low leverage account, you will be limiting your trade risk in a significant way. On the contrary, if you gain access to the high leverage trading account, you will start trading the market in an aggressive way. In fact, you will become reckless with the trade management technique. Eventually, you will lose your entire investment. So, chose your leverage very carefully as it can lower down the risk factors in the crypto trading profession.
Trade the major currencies
The novice traders might be thinking that bitcoin is the only asset that they can trade. But after learning the basics of trading, they discover many news currencies. Eventually, they start taking the trades in such currencies with the great hope that they can secure their life within a short time. But in cryptocurrency trading profession, you should always focus on the major currencies only. Trade the most traded currency pairs as it will help you to make better decisions. Moreover, the price movement of the popular currencies is much more stable compared to the emerging coins in the market. So, select your trading asset very carefully as your profit factor greatly depends on it.
Learn to trade with the trend
Trend trading method is more like a life savior for the new cryptocurrency trader. Those who want to make significant progress in their life should always learn to execute the trades with the major trends only. Study the different phases of the trend so that you can identify the endpoint of the retracement. Start using the Fibonacci retracement tools in the trading process as it will help you to ride the trend with a high level of accuracy. It might take a while to get used to overall market dynamics within a short period of time but do not expect that you can win all the trades by mastering a trend trading strategy.
Focus on money management policy
You should never take the trades without doing the proper risk assessment. In every trade, you should be thinking about the worst-case scenarios and this will help you to limit your risk profile. Usually, the traders feel comfortable trading with 1-2% risk. But in the crypto trading profession, this risk factor should be less than 1%.
You may think such a conservative method will significantly reduce your profit potential but this is not true. Slowly develop your skills by using the demo trading account and learn what it takes to become a conservative trader. Gain control over your emotions and do not make sudden decisions based on an emotional approach. Last but not the least, never try to recover the losses by increasing the risk profile.