Discipline is key for crypto traders, analyst says

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When day trading is volatile in the cryptocurrency market, discipline is key, a market analyst said.

Research on “how to invest in crypto” has increased 1350% over the past 12 months and DailyFX said it has designed a guide to help day traders navigate the cryptocurrency market with control and confidence.

Nicholas Cawley, strategist at DailyFx, said “It is extremely important to know why you are trading cryptocurrencies and what you are looking to get out of it.”

One of the main draws for short term or day traders is the volatility of cryptocurrency as it gives them the ability to enter and exit the market.

“Stick to your goals and don’t let the market intimidate you into trading when you don’t want to,” Cawley said.

There have been many examples of cryptocurrency exchanges.

Some did less well than others: Squid cryptocurrency suddenly closed, with customers losing some or all of their money. But others, including Bitcoin and Ethereum, contain it to capture the imagination of investors.

Cawley said that’s where the opportunity lies.

“One of the main ways traders lose money is by losing discipline and chasing losing trades or ‘doubling’ positions that go against them,” he said.

“It’s the market that controls you and takes your money right in front of you.”

Traders should choose their market carefully and ensure that liquidity, reliability and, if possible, market regulation are high on the list before entering a trade.

When entering a trade, traders are advised to identify their entry price, stop loss level, and target price.

Don’t enter a no-stop, no-fault trade, DailyFx said. Better yet if your provider can offer you a guaranteed stop-loss – normally for a small premium – you should consider it carefully.

Market volatility can force prices directly through a stop-loss – a slip – which can leave traders at the mercy of their supplier for their eventual fill.

Margin trading, if offered, increases volatility, and unless traders are absolutely clear that they are able to use it properly, leave it.

Traders should also examine Contracts for Difference (CFDs) very carefully before using them. The market has sufficient volatility and will continue to provide opportunities to trade profitably.

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