But the question is: where should they begin?
Most of them start from technical analysis.
Technical Analysis alone is not enough
Why? So, when they begin their trading journey, they begin with YouTube or other paid courses, and they come across some beautiful things such as support and resistance, trend lines, uptrends, downtrends, and some amazing patterns.
After learning that they believe they know everything and resume their trading. However, even after learning about technical analysis, they were unable to halt their losses.
And the sole reason for this is, that technical analysis alone is not enough.
So, what you should do? You should rely on other analysis such as fundamental analysis or derivative analysis with technical analysis before claiming that you can turn the wind in your favor.
Now after this, another major thing that you should not do is,
You don’t have to
There's no need for that.
Because if you overcomplicate things, you're making things more difficult for yourself in the long run, this is not good.
And remember that, in trading sometimes the best way to be productive and reach your goals is to keep things simple and clear.
This doesn’t mean that you shouldn't do things that are required, but if you make things difficult in the process, you will be more likely to fail.
Remember, the more rules you have, the less likely you are to succeed.
Now another thing is, you should also stop
Seeing imaginary patterns
There is no problem with seeing patterns in a chart; the problem arises when you force yourself to see patterns that are not organically present, and this is where we go wrong.
So just look for genuine patterns and don't push yourself to see any fictitious patterns until and unless you get any confirmation.
Favoring short term patterns over the long term
Now short-term trading is a trading strategy where you buy and sell assets all day long, whether you are trading in the crypto, forex, or stocks market.
It starts as the day goes on. Prices rise and fall in value, and traders have both the chance to make money and lose money as a result of these rises and falls.
Well, it is a general concept that trading short-term stocks is a little riskier than investing in long-term stocks. If you prefer short-term trends to long-term ones, it will help you in the best way possible.
Why do people overtrade? Because they can’t sit still and do nothing or they want to gain some sort of involvement. But this is not the correct way to trade.
Now what you should do is.
- Make sure your trading plan is simple to read before you enter a trade.
- Determine which signals or indicators you will use to monitor the trade.
- Determine which indicators will show you when a trade goes against you.
- Examine your trading strategy and ensure that you have good reasons for making a trade.
As long as you trade good signals and don't trade on the spur of the moment to pass the time, you'll make more money and feel good about how your time is being spent to make money.
There is no room for error
While you can’t avoid every mistake in trading, in the long run, it is important to not make them a part of your lifestyle. The trick is,
- You have to learn from both successful and unsuccessful positions,
- Research the crypto market properly,
- trade with a solid plan,
- Don’t rely on software too much,
- Understand the leverage and
- Don’t be overconfident after making some profit.
Now another major concern is,
Going all in
When was the last time you heard that trading in the crypto market, or any market, is similar to gambling? I am sure you have heard this many times, and part of it is true; trading and gambling have their ups and downs, and yes, there is some risk involved in both of them. And there is a very thin line between gambling and trading so before going all into trading. You have to know some nitty-gritty of it.