This episode is the continuation of the 12 Cryptocurrency Trading Rules – Part 1

Number 14: There will always be another trade.

There will always be another trade coming. If you miss one coin or one rally, do not worry, because there will inevitably be another one at some point.

With rallies come connections and with connections come rallies. Canfield notes that there are very few rallies that haven’t been pulled back at some point, and vice versa. So another set-up is on its way after one finishes. Don’t fret about a trade you skipped over; look forward to the next one. 

Number 15: Buy at the Bottom of a Correction.

When a coin is trending, it is much easier to purchase the pullback of the rally than while in the rally to buy mid-range. Most of the time, this strategy results in an influx of stop losses. 

Canfield advises that it is harder to lose money when you buy at the bottom of a correction as compared from buying at the middle or top of a rally.  

Number 16: Don’t Put All Your Eggs In One Basket

An age-old adage when referring to financial investments, it also applies to the management of cryptocurrencies. A diversified portfolio is better than an investment in a single security. 

Even though a coin presently looks favorable and promising, on the chance that it devalues and tanks, then you lose everything, and without other currencies to cushion your loss. 

Make sure that you are not all-in on one investment because the market is volatile, and at any point that investment could crash and burn. 

Number 17: Trade like an algorithm. 

Try to stay unemotional. Build up a trading plan and stick to it. 

Don’t overtrade. Never overcompensate. If you feel that the trade does not align with your rules, then don’t worry about it. Stick to your plan. 

Number 18: Keep a 1% Risk-per-Trade Percentage. 

Devise a plan to keep a low risk-per-trade percentage, preferably around 1%. For example, if you are planning to trade $10,000, then you must not lose more than $100.

That does not mean you cannot have a decent sized position, though. But keep the risk as low as possible, because if you strike a couple of unlucky trades in a row, then you are not going to blow through your whole account.

Be more like a tortoise than a hare. You want to build it up slowly but surely, rather than fast but haphazardly. 

Number 19: Take Profits Out of the Market.

Why enter into trading in the first place when you are not going to take profits out?

You never know what is going to happen, so take out some profits from your trading endeavors. You never know when the crypto bubble is going to pop, so once you make a profit, pull it out. 

Number 20: A Beginner Trader Must Focus on One or Two Coins Only

For 3 to 6 months at a time, a newbie trader must focus on one to two coins only, and trade them both up and down. Learn how to ‘long’ and ‘short’ your currency.

When you focus on one to two coins only, you become a master of those coins, which makes it much easier since you know the ins and outs, such as key moving averages, time frames, the Fibonacci levels it reacts to, and many more. 

As you improve, you may slowly add coins to your crypto folio. 

Number 21: Day traders, Follow This. 

Intraday traders will do themselves a lot of favor if they trade coins with values above their 200-day moving average on the daily chart.

When a coin is on the uptrend, then most likely it is above the 200-day moving average. 

Buying a trending coin is much better than buying a down-trending coin, just off of the fact that the bounces are going to be much higher, resulting in a higher target hit and success rate. 

Download Jacob Canfield’s Crypto Trading Cheat Sheet on cryptotraderpodcast.com and subscribe to Jacob Canfield on youtube for more trading lessons from a seasoned bitcoin trader.