Psychology and Money Management Rules are an integral part of trading in financial markets, and they play a special role in the Crypto market. Indeed, when a digital asset can add 100% in price in a month, or lose a third of its value in four incomplete days, the rules of money management and trading psychology are especially important. Varying forecasts and seemingly vague cryptocurrency future require a well-planned strategy and delicate approach to trading.
A Piece of Advice
Fluctuations in crypto assets only spur even the most uninspired traders to rash actions, and greed can become the main engine of crypto trading. To prevent everything that can lead to sad consequences for the deposit, you should use small leverage, always set loss limits in the form of orders, and never use high-risk approaches in the spirit of martingale or something similar.
When working with cryptocurrencies, be more cautious and conservative in trading than usual, so as not to expose your start-up capital to significant risks. Thus, the following statements can be attributed to the postulates of secure crypto trading:
- Use small leverage in every cryptocurrency transaction.
- To limit losses, always place a Stop-Loss order.
- If possible, move it to "break even" when the transaction has become profitable.
- Do not use doubling and multiplication, although this may lead to greater profits, the risks will also increase rapidly.
- Never add to a losing position.
- Be rational, don't let cryptocurrency confuse you, but at the same time use them for your enrichment!
In addition, you can trade five major cryptocurrencies without worrying about cryptocurrency future to increase your capital:
- The legendary Bitcoin cryptocurrency is digital gold;
- Its spin-off is Bitcoin Cash;
- Ethereum is predicted to have a great future associated with smart contracts;
- Ripple is one of the most centralized, but also popular assets, occupying the 3rd place by market capitalization;
- Litecoin, which the creators themselves position only as "cryptocurrency silver".
What Conclusions Can Be Drawn?
The presence of a variety of additional tools for market analysis makes trading cryptocurrencies possible even for novice traders. As a working option, open cryptocurrency transactions with the ARUM CAPITAL broker using the MetaTrader 5 trading terminal.
However, do not forget about the risks. In skillful trading hands, cryptocurrencies will lead to an intensive increase in equity. The opportunity to earn both on growth and price reduction will completely remove dependence on the market movement. It will motivate new traders to act during recession periods, earning on the decline of cryptocurrencies, which is important in 2021.