How do you successfully trade cryptocurrency?
More than a decade ago, cryptocurrencies were simply an academic concept known to a few people.
However, this academic concept has evolved into a reality for people all over the world, following the creation of the first ever cryptocurrency, Bitcoin.
Today the words ‘Bitcoin’ and ‘cryptocurrency’ are well known, and people all around the world are familiar with the concept, and even trading it – with greater and lesser success.
In 2017, the government of Australia declared that cryptocurrencies such as Bitcoin are legal and must be classified as a property that is subject to Capital Gains Tax, or CGT.
And while there may be only a limited number of options in Australia, you can certainly find excellent crypto exchanges in the country. (You can read a comparison of crypto exchange at Crypto Head.)
However, it’s important to note that people who are looking for an Australian crypto exchange must bear in mind that you should take into consideration not just the currency itself, but also the location, along with its fees and available cryptocurrencies.
If you’re new to the world of cryptocurrency trading and want to learn more about how to successfully trade it, we’ve put together some tips to help you understand how to successfully trade cryptocurrency like Bitcoin.
Have a clear motive and enough patience
You should be clear about your motive for entering into the cryptocurrency trading world – and stick to that motive, however tempting options that take you away from it may appear.
Ir’s important that you are aware (and maintain awareness) that crypto trading is tantamount to a zero-sum game. This means that for every win, there will always be a corresponding loss. So if someone wins, then someone else must also lose.
When working with money, patience is a highly necessary virtue, and this is especially true for budding crypto traders like you. The big players who have been successfully the cryptocurrency market for quite some time have built a long trading career because they possess enough patience to play (and win) the game.
They’ve learned to be patient when waiting for a budding crypto trader to make a mistake, so they can earn a profit out of their mistake. Impulsive decisions rarely have a good outcome when trading cryptocurrencies, so be patient, and don’t allow your mistakes to line the pockets of other, more experienced traders.
Learn to make use of stop losses
As a budding crypto trader, you need to learn how to make better use of stop losses. It’s vital that cryptocurrency traders know when to stop or get out of the trade, regardless of whether they are earning a profit or not.
When you have learned how to establish a clear stop loss level, it will help you cut your losses. Knowing when to use the ‘stop-loss’ strategy is a skill that not everyone who trades possesses.
This is a strategy that should not be used at random. Instead you should use it to ensure that you don’t get carried away by your emotions when trading.
The perfect moment to set your stop-loss is determined according to the cost of your coin. If you have acquired a coin for $1,500, then set this amount as your minimum point for trading. This way, if the worst scenario occurs, you will still be able to walk away with the same amount that you invested at the start.
Luckily, some countries have established a pattern that encourages proactive cryptocurrency regulation. Today, unregistered exchanges are bound to face criminal charges along with financial penalties. So make sure that the ones you choose are legally registered.