Before opening market positions cryptocurrency trader it is important to answer a number of questions. Of the responses to them formed a trading plan which must have every trader. It should be written on paper (or print in Word). It can protect the trader from the conclusion of the unfounded, unprofitable transactions.
Strict adherence to the trading plan will be the basis for competent trading. Rejection of it will lead to wasted lost of time on the monitor, excessive emotioneering, random actions and in 99% of cases the drain of the Deposit.
It is a clear trading plan for each transaction will be the «Holy Grail» hunted traders all over the world. Many of them have heard about a trading plan, which supposedly should follow, but only a few realize that it represents actually.
During the development of the work plan for the deal trader answers a series of questions. This allows to transfer the information from schedules and news, on the reflex level. In the implementation of the trade situation memory in certain moments takes and retrieves the desired fragment, and so generates a feeling of the market. For memorizing typical market situations takes time.
At first, the results may not be visible, so traders ignore this way of trading and turning to entry points and a number of special techniques. Progress will appear after 1-2 years of daily practice, and first results can be expected through at least 5-6 months. Few who are willing to wait for success for so long, although a lot of money in trading you can earn that experience. Let’s consider the stages of work on the TG.
The idea primary. It should be confirmed or not. For a trader the tooltip should show the current situation on the market. You don’t need to come up with «ceiling» and «sucked from the finger» only for analysts.
Question: why I langau, Shorty or go flat?
The answer should not be here «And suddenly get…». This is a gross mistake that can only lead to a drain. It is important to remember that the position out of the market is also acceptable. Perhaps even more acceptable than the position in the market, and certainly more acceptable than «trade blind».
Before the opening of the transaction you need to test your idea to see what it can confirm.
Question: When to enter the market?
Many cryptocurrency traders try to predict where the market will go. This is a gross error that makes not analyze, and to choose between two opposites, which leads to a drain of the Deposit.
Experienced trader do not need to know the direction where the market will go, it is enough to conduct every transaction on their own trading plan.
Each idea has some conditions for implementation. If the major operator is not present and the report reflects data show an uncertain pattern, the market has entered a position of the range, it’s absolutely unimportant to buy or sell, you need to open a position in the direction that will show the market itself.
After opening the transaction, it is important to determine the level of risk that arises when testing trading ideas. You need to determine the position at which to open the opposite transaction. This is the point of stop loss.
Question: How much are you willing to pay for your idea? How much is it?
It is desirable that between the stop and the opening price of the transaction was as many different obstacles — levels of support and resistance.
For the last step of a trading plan transaction it is important to find out the next level of volume, the level of support and the conditions for closing the position.
Question: What is the potential of this movement? If the idea is confirmed whether to enter the market with this risk?
The question strikes or no market for this particular level of wrong. To close a position must be the real cause, the condition that will demonstrate the market. To withdraw from the deal «just so», for no reason, because «it’s hard to sit», because it’s scary, it seems that the transaction volume is large, the market has gone too high, it is a capital mistake.
Trading plan for the cryptocurrency market
Preparation of trading plan to work on the cryptocurrency market when the similarity with the traditional market as a whole has a number of differences in detail.
«An important commercial formation, the specific conditions for entering a position and understanding at what point of time you need to go. It is better not to open new positions after lunch it will be either about figure or position is not to work out. All this, including the timing, should be fixed,» — says the analyst of cryptococcal MINE mark Sorokin.
Know trading formation
The importance here is gaining knowledge of the trading formations. Most often it is nedopetye of tips and nizino, or the formation of a double bottom, breaking daily lows (highs). It is important to capture in the form of drawings. In case, if long-term accumulation, we should expect the exit from the outset and the price is fixed and you can join the movement.
Choose benchmarks by objectives
When opening a position, a trader places a rough guideline of market movement:
- The previous accumulation, which formed the previous move up or down;
- Price fixing at the exit from the outset, this is an important point for the start of the trade to which the market often and where returns can be the entry point;
- Output in long flat.
In the latter case, preference is given to laterals with a duration of three days. It is sufficient, with which to work in the future. While price is not out of range, it is impossible to tell definitely where the market will go.
If trade opening is not a priority, and need to sell, lot can be split, for example, 1/10 of the average standard, or to close part of the position, if possible. Even if the market is a plus, but we can expect the correction, is fixed 50% position. Therefore, the lot is moved to breakeven.
Keep track of time
Cryptocurrency on the market the priority is given to the morning hours in UTC. Convenient and afternoon period at the beginning of the American trading session.
Properly mark with stop orders
You need to properly assess trade risks for each specific transaction. In the traditional market, this figure does not exceed 1% for cryptocurrency — 3-5%. If the risks above, the transaction should be abandoned.
Understand market psychology
In cryptotrading there are many moments of mental preparation. Many circumstances that affect the decision of the trader on the deal.
«Whenever you have the conditions on the input, there are doubts, to open or not,» — said the expert.
Write down important
Important points worth to fix, so they were always before my eyes, and constantly reread. It is possible to write in notebooks, smartphones for these purposes less convenient.