UPDATE : Mandatory Two Factor Authentication on all OspreyFX Accounts - Read more

How to Become a Successful Crypto Trader

How to Become a Successful Crypto Trader

*OspreyFX would like to state that traders should research extensively before following any information given hereby. Any assumptions made in this article are provided solely for entertainment purposes and not for traders to guide or alter their positions. Please read our Terms & Conditions and Risk Disclosure for more information.

Finally, the time has come for you to learn more about crypto trading and start your journey into the world of digital assets. Trading is easy. However, achieving positive results often requires more focus and knowledge. To become successful, before investing money, you should invest time to understand the complexities, challenges, and technical angles of crypto trading. While it is no secret that digital coins took the financial sector by storm, in-depth knowledge is more difficult to obtain. And it is necessary to help crypto traders develop consistent trading plans and march towards sustainable gains. In this article, we wanted to reveal the most important things you need to grasp in order to trade crypto more profitably.

How to Day Trade Crypto

Investors in digital assets usually prefer to hold their coin positions for extended periods of time. Their strategy is a long-term one. Whereas day traders of cryptocurrencies choose to find lucrative trading in shorter-term positions. Indeed, here is why day trading crypto is just as profitable:

  • Crypto trading is more volatile than stock trading.
  • Trading occurs 24 hours per day, 7 days a week.
  • You can do big trades with low overhead.
  • Multiple trading opportunities emerge within a 24 hour period.

Volatility is a great advantage of digital currencies. That’s because it provides many profitable trading opportunities each day. Just like traditional currencies, when traders use technical indicators, it makes it easier to identify incoming potential price increases. Such indicators include:

  • Volume
  • Relative Strength
  • Oscillators
  • Moving Averages

Thus, it is important for beginners and seasoned traders alike to keep an eye on technical indicators and developing trends. A crypto-specific trading strategy utilizes the indicator On Balance Volume (OBV). It is considered to be the indicator for day traders.

What is the OBV Indicator?

The On Balance Volume indicator can be found on most trading platforms like MT4. Reading the information from the OBV indicator is simple.

The OBV basically analyses the total money flow in and out of an instrument. The indicator uses a combination of volume and price activity. Accordingly, it can give you the total amount of money going in and out of the market.

Ideally, you want to see the OBV moving in the same direction as the digital asset price. Theoretically, if a cryptocurrency is trading up and the OBV is trading down, it’s an indication that traders are selling into the rally. While the reverse is also true, if a cryptocurrency is trading down and the OBV is trading up, it means traders are buying in. As you gain experience, you will learn to incorporate this data into your trading strategies.

Enhance Your Trading Strategies

Trading, in general, involves a certain amount of risk-taking as well as effectively managing that risk. So too does crypto trading. In fact, there are many ways these risks can be reduced and controlled. The most important component here is strategy. Master the art of creating effective strategies with these 6 top tips:

  • Diversification – When you trade, don’t invest everything in one digital asset. Diversify your trades by combining several cryptocurrencies. This will help reduce the potential risk associated with a specific coin.
  • Minimize Your Costs – Choose a trustworthy exchange offering competitive fees. This way when you open multiple positions on a daily basis, it won’t drastically affect your Return On Investment.
  • Know Your Trading Times – Being a trader means you don’t have a fixed 9 to 5 schedule! This also means you should plan out your day and trading times according to the asset of your choice as well as your strategy. Remember, cryptos trade 24 hours a day.
  • Follow the News – Always pay close attention to the news in general and cryptocurrency news in particular. Staying ahead of the market is important when you are preparing your strategy, and making quick decisions on trades. Set up news alerts, subscribe to newsletters, and be aware of how fast-paced the digital currency sphere is.
  • Leverage Technical Analysis – Make use of solid technical indicators such as OBV to help you justify each of your trades.
  • Use Stop Losses – It should go without saying, make sure to set stop-loss orders on every trade.

How To Become A Successful Crypto Trader

Things to Keep in Mind

Get a Secure Bitcoin Wallet

The first thing you need to get started trading bitcoin is to open a bitcoin wallet. A wallet is used to secure bitcoins from risks, hackers, or scammers. Also, a wallet is used for facilitating transactions. Each wallet has a private and public key. Traders mustn’t, and don’t need to, share these keys with anyone. Therefore, it is crucial to select a reputable and safe wallet to become a successful crypto trader.

Get Some Experience

For any type of trading, when you are a newcomer, the best advice you can get is to avoid jumping in the market straightaway. Instead, it is very helpful to start with practice. Learn everything you can about the digital currency you are interested in trading. And familiarize yourself with the trading platform. This way, you won’t have to face a stressful situation because of a lack of know-how.

Learn Market Analysis

Making fast, efficient, and informed decisions when trading crypto is definitely something you need to master if you want to generate profits. Always aim to make better decisions. That’s why traders should learn how to leverage all the tools and resources available to make a proper market analysis. Stay on top of your crypto game, subscribe to the right news, education, and get the best tools out there, to help you make better price predictions. Once you learn and perfect your market analysis, you will be able to take fast and wise decisions when needed.

In Conclusion

Finally, in addition to placing a high importance on your choice of a bitcoin wallet, always consider the other parameters of crypto trading. These include exchange for investments, reputable trading platforms, staying up to date, and continuous learning. Keep in mind that crypto trading wisdom is often acquired by personal experience, trial and error, and observation.

Want to Trade Cryptocurrencies?

Whenever a client trades cryptocurrencies on the OspreyFX trading platform, they are in fact trading on the price movement of the chosen digital coin, rather than physically purchasing the currency. Become Part of the Digital Currency Movement. 

24/7 Crypto Trading

Trade Forex, Crypto and Stocks with up to 1:500 Leverage on a True ECN Forex Broker.
Sign Up