How to Speedrun Beginner Crypto Trading
By Trizzy - 07-Aug-2023
Starting off as a new crypto trader can be some of the most chaotic days in any trader’s career. Some traders experience more pain in their early days than others. Hopefully, this article helps new traders take note of a few simple steps to accelerate parts of their learning process. Each of these three tips are extremely simple to follow.
- Trade with real money from the start.
- Obsess over consistency when taking trades.
- Log trading thoughts in a journal.
Let’s dive into each of these ideas.
Trade with real money.
One of the best ways to become a better trader is by using real money. This may seem obvious to many readers, but a lot of traders on Twitter will occasionally preach the virtues of paper trading for new traders. Most of this is a waste of time.
What makes anyone a better trader is now how well they draw lines and boxes on a chart or how well they can read a set of indicators. How well traders execute their strategies and manage risk separates winners from losers.
Paper trading (or “demo trading”) can have some benefits. In crypto, for example, Bitfinex offers paper trading accounts. But any successful trader will agree that losing real money is one of the best instructional tools for changing their system and improving their execution. So, learn to lose money – it’s part of the process.
What this means is taking trades every day with fake money that doesn’t mean anything to the trader likely will not give them the practice, experience, and (sometimes painful) education they need. For example, emotions are a big part of trading, and almost nothing evokes strong emotions more than losing (or making) real money. Trading with real money is guaranteed to teach anyone how to manage their trades differently. Get the full experience of trading from the start – use real money.
Obsess over consistency.
Consistency is a key character trait for anyone who wants to be a successful trader. Trying new things is also important, but extended periods of consistency to test new ideas is essential. This doesn’t mean someone should stare at a chart 24 hours per day all week to see if their strategy works. It’s a mindset for selecting which trades to take, which ones to ignore, and then adjusting flaws based on feedback from the market. Identify setups consistently. Take or reduce risk consistently. Execute opening and closing trades consistently.
Inconsistency quickly leads to messy mistakes and, ultimately, losing money.
Keep a trading journal.
Cognitive biases, forgetfulness, and the constant chaos of a market can cause traders to lose track of lots of important information. Fixing this is easy – keep a trading journal. Constantly logging trades with notes about emotions, news events, and other relevant facts will make any novice a more focused and complete trader. Note how price action reacts when entering a position. Note the thought process that caused you to take a trade. Observe commonalities between winning trades and losing trades over time. It’s that simple.
The site readers are seeing this article on – Coin Market Manager – is the best journal a crypto trader can use. It automatically syncs trading histories, gives dozens of performance data points, and offers tons of useful features for tracking, labeling, and notetaking. And it’s free to start.
Trading is hard, but it’s one of the most rewarding uses of my time I’ve found. Trading on demo accounts, inconsistency, and not journaling trades will definitely cause a new trader’s experience to be harder than it should be. Improve your process and refine your edge with these simple tips, and you’ll thank yourself later.