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How to Beat Trading Losses in a Cryptocurrency Market Slump

Losing money is painful, and since it can disrupt your way of life, many people try to avoid it. As volatile as the crypto market is, losses can be inevitable, but you can master the market.

The reality of financial markets is that there will always be highs and lows, just like other segments of life. Amid the lingering bear market that cryptocurrencies have languished in for several months now, some nuggets can help. For many people who entered the trading scene at the onset of the price slump, finding a breather so far might have been far-fetched.

In all honesty, that the market has largely traded in dips is not a death-knell just yet. The traditional stock market has taken a hit in the last year, yet, activities have continued on the platforms. Why then must anyone think differently of cryptocurrency markets?

As a cryptocurrency trader, it is important to own your space and be geared to make the best of the opportunities available. Have you suffered losses of late? You can ride the market once more. Here are five tips you can use:

1. The Chill Pill

There is no one who just suffered a setback that can be said to be in the best state of mind. This is true irrespective of the kind of loss that might have resulted. Whether it is financial, emotional, or material, the recommendation is to pull back.

Taking some time off the routine will help your mind get back to an optimal state. Losses bring disenchantment even to the strongest among men. The aftermath of a financial loss should be such that makes you leave the trading scene for a while.

The immediate justification for a pull-back is to prevent you from making trading decisions that will get you deeper into the mire of losses. While you observe a chill, your mind will be reinvigorated, and you can begin to take hold of the reins once more.

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2. Assess and Review What Went Wrong

In the period following the hiatus you take from trading, you also need to begin to get ready for a return. That you suffered losses does not mean that you should bolt from trading. No matter how painful it all might be, the time calls for you to begin to assess what went wrong.

Sometimes, it is the wisest thing to lay out the sheets. What did you do wrong? Could you have used a safeguard? Did you rush in head first? The answers to all of these questions form the assessment process. You must be able to put your fingers on what went wrong.

The truth is that even the biggest and most renowned traders suffer losses too, but they have learned to use safeguards. No financial trader can altogether avoid losses, and this is the reason using the reverse scenario must not be neglected. What if my projections fail? What if there is no payback? Can the trading platform be trusted? Is the reputation of my broker worth the trust?

Painting the reverse picture in your present circumstance is a great hedge in many turns in life. If you did not do this before your losses occurred, then you should recognize that you missed the plot.

3. Build Your Resource

An important nugget that Warren Buffet always points at is knowing your turf. Never trade crypto because you saw an advert by the best crypto exchange. Have you learned the basics? The crypto scene is huge, and there are segments to understand. The altcoins are a different ball game in comparison to the leading coins like Bitcoin.

Your duty is to research and build a resource that you can master about the target of your trade. If you choose to follow ICOs or STOs, make sure you understand the dynamics. Find a niche you can know through and through. The biggest moneymakers in the financial markets dominate a turf. They don’t trade everything and all things.

Part of crypto trading is knowing that significant losses may occur with a small change that topples the market. Knowing this, it’s foolhardy not to have a grip on your trades.

4. It’s Not Over ‘Til…

As the saying goes, it’s not over ’til it’s over. As long as you are able to recognize where you went wrong, you need to gear up and start again.

It is a clear fact that an understanding of the market can earn you millions with a surge in market prices. Despite the pull of the bears, many people are still making money on the scene. Knowing what to leverage and the tools to hedge is a smart way to ride the market.

>> Crypto News: Elon Musk Talks Bitcoin and Binance Expands

You need to brace up and face the future as only the brave and courageous take the spoils. As blockchain adoption deepens across the globe, many opportunities are emerging on the crypto scene that cannot be ignored. That is why you must give time to adequately research and fact find.

5. A New Start

Having cleaned out the loss and opened your mind to a new lease of life, you are set to start trading again. With all the lessons you have learned, you can now proceed like the sage and trade with confidence.

You need to know that no matter how careful or smart you become, losses will still occur. If you have learned hedging techniques and not to follow the rave, you have a chance to make some decent money. You are set to get the best returns when you know where to look and pick your trades.

Last words

For a determined trader, losses cannot be the end of life. Riding the highs and lows of crypto markets is the leeway to making money. While some see the bear market and stop trading, others seek out the goldmine and explore the same.

You can bounce back and trade profitably after a season of losses if you put the lessons here to work.

Featured image: DepositPhotos © iqoncept

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Crypto Day Trading | How you’re Going to Lose your Money Quick

Over the past few years the idea of becoming a ‘crypto day trader’ has gained in popularity.

There are countless YouTube videos all claiming to teach viewers the “real secret” to the high-flying, trading lifestyle. How you can spend an hour or two in front of your laptop every day and pocket upwards of $500 in profit on a daily basis.

Before we look at the validity of such a claim, let us look at the facts.

Cryptocurrency is a tradable asset, and it shares a lot of its characteristics with traditional trading markets such as Forex and stocks.

It is possible to make high returns from trading cryptocurrency, but there are high risks attached as well.

If you don’t know what you’re doing, you can easily lose all your money very quickly.

The lack of Government regulation in the crypto market also removes many of the so-called fail-safes that are present in other forms of trading and gambling.

Many refer to crypto trading as the wild west of the investment world, and to a certain degree they are right, but besides the slow creep of Governmental regulation, we also see many exchanges taking steps to regulate themselves.

One case in point is European exchange ETERBASE, known as the first regulation-compliant cryptocurrency exchange in Europe. Be it data protection, AML, KYC, GDPR, they have it covered, and this is looking like the way forward for any exchange that wishes to be taken seriously.

Many crypto exchanges, including some of the more popular platforms such as RightBTC offer beginners guides intended to help those new to the world of crypto trading get started in the right way.

Take advantage of these official guides, as they are usually more reliable than the stuff you’ll find from self-proclaimed successful traders on YouTube.

However, even if you’re trading on the most reputable, respectable exchange out there, a fundamental lack of knowledge will still see you lose a lot of money, fast.

Get Rich Quick

Anyone who decides to start trading crypto under the impression that its a get rich quick scheme is almost certain to lose all of their funds pretty quickly.

Crypto is NOT a get rich quick scheme.

For those who know how to read the markets, there is an opportunity to make a lot of money from crypto, that is true, but there’s also a very good chance that you could lose a lot of money as well.

The bottom line is quite simple. Never invest more than you can comfortably afford to lose.

No one wants to lose money, but it’s certainly going to be a whole lot easier if you lose a spare $500 you had sitting around than it would be if you lose $500 that was supposed to go towards paying your rent or energy bills that month.

The very thing that attracts people to crypto investing is what can drain your funds quickly. Volatility.

Shorting

Unless you really know what you’re doing this is a dangerous tactic to use, and will more than likely see you lose a lot of your money.

Many day traders think that they can succeed where other, “less serious” traders have failed simply because they consider themselves to be day traders and someone who tracks the market very closely.

This typically makes no difference, as the inexperienced trader will many times not pull the plug until they’ve lost a lot of money.

Remember, there is virtually no cap on the growth of any particular asset, so the risk of a loss is, in theory, infinite.

Unlike owning an asset which is failing, where your maximum loss is 100% of that particular assets value, with shorting, an asset can double or even treble in value, taking your loss with it.

Many inexperienced traders take part in this type of tactic and leave it far too late before they realize they’re in over their heads.

Margin Trading

By its very definition margin trading breaks the number one rule all traders should follow, which is not to invest more than you can afford to lose.

Most margin traders are simply being greedy and are essentially borrowing to invest, which never ends well.

Always obey the golden rule, which is only to invest what you can comfortably afford to lose.

A margin traders worst nightmare is a margin call, which is when a broker basically places a demand that an investor deposits the funds required to bring their account up to the minimum maintenance levels once again.

If the said investor cannot cover his losses, then the trade is closed, and your initial investment is history.

Margin trading is high risk even for the most experienced of day traders, so avoid it entirely unless you know the game inside out.

In conclusion, if you’re looking for a get rich quick scheme, don’t look at day trading. If you’re operating with limited funds that you cannot afford to lose, then don’t get involved in day trading.

The other side of the coin is that day trading can be fun, and you can make money, but you need to be sensible and avoid getting greedy.

Take some time to learn the ropes, trade small, pick up good habits, and you’ll be fine.

Featured Image: DepositPhotos/ dimarik

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Cryptocurrency Retirement Funds | SEC Warns Against Crypto IRAs

If you were planning on using Bitcoin to retire, you might want to think again. Why? Well, because the SEC has recently warned against cryptocurrency retirement funds.

Here’s why.

Cryptocurrency Retirement Funds

As people approach retirement, many are nervous about where they are sitting financially. For these reasons, people are turning to self-directed IRAs, which are savings accounts that allow for alternative investments.

When it comes to self-directed IRAs, typical investments include company stocks and precious metals. However, thanks to the crypto boom, virtual currencies have been added as an option.

But the SEC doesn’t appear to support the addition. According to the commission, just because people can use their retirement funds to invest in cryptocurrencies doesn’t mean they should. There are still a number of risks.

What Did the SEC Say?

The Office of Investor Education, which is a branch of the SEC, issued an investor alert this month. It said the attraction of virtual assets has the potential to be used by fraudsters.

Specifically, the SEC said that now that there are cryptocurrency retirement funds, it’s important to know about the risks and “fraud involved with these kinds of investments that may not be registered.”

Fraud, Fraud, and More Fraud

Are we surprised to see that the SEC is warning investors of the potential for crypto fraud? I’m certainly not. It’s perhaps one of the most common arguments against cryptocurrencies.

It’s not solely to do with cryptocurrency retirement funds, either. Whether you’re crypto investing or crypto trading, there is always going to be the possibility of fraud and crypto scams.

The Takeaway

It’s not as if the SEC made retirement funds investing in cryptocurrencies illegal (like Saudi Arabia has done with crypto trading), so at the end of the day, it’s up to the individual whether they want to continue or not.

That said, bear in mind what the Office of Investor Education said this month.

Stay alert, find a good custodian, understand the rules of self-directed IRAs, and do your homework before giving the green light for an investment!

>> TRON (TRX), IOTA (MIOTA), and Ethereum (ETH) Lose Big

Featured Image: Depositphotos/© FrameAngel

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Crypto Trading Through Algocratization | Making Crypto Accessible

Cryptocurrency trading has always been fundamentally different from traditional finance in lots of ways.

It’s more inclusive, easier to make big and quick gains, has lower barriers to entry, and doesn’t require huge startup costs.

Maybe these are the reasons why crypto has been so fiercely and constantly undermined by the elitist financial class ever since it’s been big enough to catch their attention.

Crypto represents a marketplace where you don’t have to be a millionaire to get started and achieve huge success.

This article tells the story of a man who started with an investment of just $3,000 and made enough money to retire and travel the world in enormous luxury forever.

This market has the potential to redefine the way we think about trading. But even so, it isn’t as equal as it could be. There are still many opportunities for the wealthy and well-connected to secure big advantages.

That means there’s still some work to be done. It’s important to preserve crypto’s values, make things fairer, and ensure that newcomers to crypto aren’t excluded because they don’t have enough money or influence.

First up, let’s take a look at why less established traders might be finding it harder to break into crypto.

 

Excluded from Tech by Tech

One of the biggest things preventing ordinary traders from having real success with crypto is algorithms. More specifically, how difficult good trading algorithms are to build and access.

In traditional, Wall Street finance, algorithms are a staple of the profession. They’re widely used by trading firms and those in the know because they bring massive advantages to the table.

Algorithms take care of the mundane, repetitive parts of trading, the bits humans can’t stand. They can monitor the markets constantly, buy or sell stock when the price reaches a certain point, and easily automate a lot of the necessary but monotonous elements of finance.

They also help reduce the risk of human error. People are famously prone to making big mistakes when it comes to trading. Fear, anxiety, and impulsivity can drive otherwise cool-headed traders to make disastrous blunders costing enormous sums of money. That doesn’t exist with AI.

And in cryptocurrency trading, algorithms are even more useful. That’s because the crypto markets operate on a 24/7 basis, meaning it’s literally impossible for a single human to monitor them effectively.

To make matters worse, cryptocurrencies are also notoriously volatile. Big crashes or staggering growth can happen pretty much overnight, and it’s easy for a person to miss out on danger and opportunity alike.

So for the beginner crypto trader, algorithms are a really important piece of the puzzle. Not having access to this technology puts you at a disadvantage from the offset.

So why isn’t every crypto trader using them? The answer is simple: cost. Unless you have the coding skill to put together your own algorithm, you’re forced to pay someone else to do it for you, and that kind of service doesn’t come cheap.

As always, it’s the wealthy and the well-connected that come out on top, while ordinary traders are left trailing and unable to make use of this valuable weapon.

In order to make crypto more accessible and allow anyone to have a good chance of success regardless of their wealth or status, we need to make algorithms much more easily available. The good news is that several companies are doing just that.

 

Algorithms for Everyone

Among the companies trying to make algorithms more accessible is Capitalise.

Through their platform where users can build their own algorithms affordably and easily without any coding knowledge required.

In the Algobuilder platform, users simply type instructions in plain English and the interface takes care of the rest. It even gives suggestions and guides users through popular steps to help build a typically effective algorithm.

Crypto Trading Through Algocratization

If you manage to create a successful model, you’ll be able to share it with other users in the network. Capitalise even want to build a kind of social network, where traders will be able to help one another and draw on each other’s expertise.

Projects like this represent a more equal, community-minded approach to crypto trading, where users are encouraged to support each other. It’s a push towards a more inclusive crypto trading market, where participation isn’t restricted to wealthy and established traders.

Featured Image: depositphotos/ faithie

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