The risks of this strategy are that you cannot guess with the trend, do not get confirmation of the rumor, or simply miss the first and third phases of the wave. There is also a great risk of completely confusing the phases of the wave. For example, it might seem that it’s not too late to follow the trend, but in fact, sales are about to begin on the market. When rumors turn out to be false, blindly following them can lead to significant losses. At the first sign of market reluctance to trust rumors more, you should stop following this strategy. This is how Trustedbrokerz works perfectly now.
Do not reinvest all profits
Trading is work, and labor must be rewarded. Income is the best motivator for productive work. Therefore, in order for trading to become an exciting experience and always have a desire to learn something new, try a fresh strategy or a new indicator, you need to periodically withdraw some of the profit into fiat and spend it on pleasant things.
Do not capitalize on all profit, but only a certain part of it. If money does not bring pleasure, then the process itself can quickly get bored, especially with the first failures. In business, profit is more important than the process itself, no matter how exciting it may be. Get your profit.
Do not regret the lost profit
If you closed a deal capturing 20-30% of the profit while your friend made x10 do not regret it and do not envy. Those who go to the whole patty completely do not comply with the principles of risk management. Such traders could very likely make x10, but only in the opposite direction for example, if they entered the trade late, just before the trend reversal.
Trading is not a quick enrichment scheme. This is work, not a game. A trader should struggle with his own greed and accustom himself to the fact that profit on open orders should be planned in advance. Be that as it may, avoid the Lost Profit Syndrome (FOMO) and don’t follow the advice of social media advisers.
Do not trade with leverage
At least at first, do not resort to margin trading in cryptocurrencies. Bitcoin is still volatile. Altcoins are even more prone to strong price fluctuations. That is why the cryptocurrency market attracts so many people due to the high volatility, you can quickly get significant profits, and without the use of borrowed funds, as well as the associated commissions and risks.
Margin trading in cryptocurrencies involves huge risks. The essence of such a trade is that a trader borrows capital at a certain percentage to increase his leverage. An incorrect decision can lead to significant losses if the price moves sharply in an unfavorable direction, the platform will first ask you to increase the security deposit, and then it will liquidate the order with fixing significant losses for the trader. The interest rate on borrowed funds also plays a role these fees are automatically charged at the moment of closing the position.
Due to the insufficient liquidity of the market, candles on the cryptocurrency margin chart are often full of long shadows. Each of these shadows is a potential quick profit or margin call. Whether the game is worth the candle is up to you. Leverage in the hands of a layperson can lead to disastrous consequences. It is very dangerous to use this tool in conditions of price instability or when trading low-liquidity coins.