An Asset Class Rich In Trading Opportunities
Traders love volatility, regardless of the direction. Thanks to futures trading, traders can profit from both pumps and dumps. However, it can be a dangerous idea to open short positions in a bull market. Without warning, altcoins can pump double digits while you are still enjoying your morning coffee. This market is as fast as it is dangerous. However, fortune favors the brave, right? Without risk there are no gains and bravery must be matched with competence.
A competent trader will enter dangerous waters. However, he does so with a set of rules. This is what separates the brave from the foolish. Even still, a playbook is not a guarantee of a successful trade. However, one would be careless to enter a trade without one. It’s similar to entering the battlefield without a weapon. Chances are, you won’t last very long. I have mentioned my screening process for micro-caps in an earlier article.
There is however a difference when it comes to trading. A micro-cap investment is more of a medium to long-term idea, whereas a trade could last hours or even days. The objective is different and so is the screening process. Essentially, an effective trader will have a screening process, even if it is a subconscious one. Unless a trade meets certain criteria it is more of a gamble than anything else.
A Common Mistake
For many altcoin traders, a decent correction is a prime opportunity to open a trade. This can often be true. However, analyzing the price action and on-chain data is imperative to gain a degree of certainty regarding a particular trade. Note, that I refer to a degree of certainty. There are no certainties regarding financial markets. There is only the probability of a successful trade.
Trading is about identifying the probabilities and searching for additional confluence in the charts and other elements that affect the direction of markets and particular assets. There has to be a set of rules that are adhered to. Trading is a form of discipline. Begin to soften in this regard and things start to fall apart. It will sometimes mean missing out on a trade. However, it’s a necessary sacrifice for long-term survival.
I wish I could say otherwise. However, establishing a trading playbook that works consistently takes time. We all want to start closing profitable trades as soon as possible. However, if that were the case, everyone would quit their jobs and begin trading. Unfortunately, it’s not that simple. It takes time and is a process of trial and error. We all have to pay our school fees.
Unique trading styles will create a unique set of rules. There is no one-size-fits-all all. A simple adjustment such as what time frame a trader chooses to utilize can create chaos in an existing approach, but which is for a different timeframe. There are so many variables and adjustments. Trading can become a science, and even an art form if you take it that far.
Final Thoughts
Trading without a personalized playbook is very much like gambling. Individuals who wish to take trading seriously need to spend a lot of time developing a set of rules and principles to follow and adhere to. It’s imperative! One will always experience lucky wins. However, these are often short-lived. Consistent profits come down to disciplined and knowledgeable practices. All the best, happy trading and I will catch you in the next one!
Disclaimer
First of all, I am not a financial advisor. All information provided on this website is strictly my own opinion and not financial advice. I do make use of affiliate links. Purchasing or interacting with any third-party company could result in me receiving a commission. In some instances, utilizing an affiliate link can also result in a bonus or discount.
This article was first published on Sapphire Crypto.
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