Cryptocurrency Trading Strategies: Tips for Maximizing Your Profits

The world of cryptocurrency is highly volatile and profits can quickly turn to losses. Crypto trading is merciless and if you want to succeed and make a profit, you must have control of your emotions. You may hear that controlling emotions will be a more useful quality than years of trading experience, although it is not unimportant either. Even the slightest emotional mistake can affect a large profit. 

Emotional Control

While being in open trades on the crypto market, traders can face completely different emotions. And some can significantly affect the trading process, prompting wrong decisions and actions. Let's take a look at the most common emotional states that are bad for traders:

1. Greed. It's a familiar feeling when you want to make times more profit. But greed can lead you to rash or risky decisions, and you can end up losing your money. And sometimes losses carry more than the profit you were chasing.

2. Fear. Fear of losing all funds in an open trade can lead to panic, and as a result, a trader closes an order prematurely. Fear makes it difficult to get the maximum profit. 

3. Impulsiveness. Another emotional state in which strong emotions and their overabundance lead to rash, spontaneous actions. For example, traders open deals without proper analysis, succumbing to emotions, and not always able to get the most out of it. 

4. Pessimism. A trader's perpetually negative attitude often does not result in deals closed in the big plus. On the contrary, in such a pessimistic state, you can refuse potentially profitable orders and often miss opportunities. 

5. Еuphoria. Such emotions are mainly caused by fast profits or great success and lead to hasty, imprudent, or not fully considered actions. Often in a state of euphoria, traders lose money rather than gain it.

It is extremely important to learn how to control these emotions and behave properly in one emotional state or another. But first, take the time to recognize these emotions. Taking it one step at a time, developing a trading plan, choosing the right strategy, and using the right tools can help to reduce your emotional impact on you and help you make smarter decisions.

Stick to the plan

Creating a plan may seem like something you can skip and open trades right away. But still, a plan has a big impact on your crypto trading and helps you to act exactly according to the scheme you've worked out, rather than making hasty decisions based on emotion. Creating a plan takes minimal effort, but the benefits are many. In a plan, you line up your goals and acceptable minimum and maximum limits, making it easier for you to make decisions as a result.

How to properly create a plan?

The first thing is to determine how you react to certain events. For example, if the project has released additional features, should you buy another part of the project or leave everything as it is? 

There can also be unexpected events, for example, the project often gives out errors or was attacked by hackers, what would you do in this case? Planning even for the unexpected is an important aspect of the plan and it will help you make the best decision on time. Determine what your indicators are for making decisions while trading. Let's say it could be a relative strength indicator (RSI).

Decide when you will sell crypto coins at a profitable price. And what price would be considered a bargain for you? Will the cryptocurrency be sold all at once or gradually, will it be reinvested in the future? You have to answer all such questions in your plan in order to follow your planned actions clearly.

Achieving goals through important tools

There are 2 main indicators in the crypto-trading market that will help you to lock in profits and avoid heavy losses. These indicators are Stop Loss and Take Profit. 

To avoid sitting in front of an open trade chart all day long, you can set these indicators to mark your limits. Stop Loss is responsible for the price at which the cryptocurrency will be sold back into the market. You should not place this identifier too close to the price of an open order, otherwise, with market fluctuations, there is a chance that the deal will close too quickly. 

Tip for traders: For the safe and correct setting of the Stop Loss identifier, it is important to know the volatility index of the cryptocurrency you are trading. 

It is also important to know how to set the Take Profit indicator. It, unlike Stop Loss, is necessary for fixing profits. Set the price of the cryptocurrency in advance, above your open order, and then, when it is reached, the deal will be closed and the profit will be fixed. 

Write in your plan in advance what your Take Profit and Stop Loss values are, so that you won't be tempted to set other values or exit the trade early during an open order.

Stick to the tips

There are only a few tips listed in this article, but they will help you maximize your profits and avoid unnecessary losses. The most important thing for every trader, beginner or professional, is controlling emotions, watching and studying, as well as knowing how to use market instruments.