Hi, My name is Faisal and I am an active trader on the Tradealike mobile platform. Thought of writing few lines related to how I got started, and if any of my fellow traders can benefit from the lessons I learned.
Starting off as a Forex trader about 11 years ago it was the first lesson that I got from my friend about trading. Then again hearing it from a friend, mentor or a teacher is one thing & experiencing it personally a totally different ball game. The adrenaline rush, the excitement & the opportunity to make money gets to your head & you end up making the mistake that I made quite a few times myself before slowly getting a handle on it.
The one thing that I learnt the hard way, as a novice trader was that there will always be another opportunity waiting for you if you are patient & disciplined enough. There may be subtle differences depending on what kind of security you are trading but the underlying truth remains the same.
Years passed by & I eventually transformed from being an avid Forex trader to a Stocks & more recently Crypto currency trader (long term). You must be thinking how do I manage to trade all these concurrently — well I follow a few rules to manage my trading & not fall into the FOMO (Fear of missing out) trap. Patience is a virtue my friends, which serves you well.
• Know when to trade
• Devise a plan & follow it
• Stay disciplined
• Reap the Rewards
I know you must be thinking how you can continue to do this on a daily basis since it can become overwhelming with your feet dipped in so many places. I am not going to lie to you, there are days when I tend to deviate a little — after all we are all human! But you have to stick to your basics if you want to stay in the game for the long term.
Although the rules apply to pretty much trading of any security it couldn’t be truer than crypto currencies where the trading interest of people has sky rocketed recently. The immense volatility & appreciation (and depreciation for that matter) associated with it has made some people very rich & others grappling to get on to the steaming train!
Unfortunately for the majority it’s just another get rich quick scheme, which has made them into an anxious lot compulsively checking their phones, tablets & computers for the crypto prices. And in the absence of a trading plan it gets worse.
Where volatility brings lots of moves up in the price of crypto currencies, there have been pullbacks of 30% or more on multiple occasions. Bitcoin alone has crashed roughly once per quarter since 2013 as depicted in the graphic below, once by a whopping 70%! So what do you do?
Let’s follow the steps: Cryptos trade 24/7 so there is no fixed or good time to trade for them since the volatility is not based on other financial markets but external factors like regulation news, acceptance etc. Being a technical trader I have never worried myself with the fundamental factors like this.
My goal has been clear from Day 1 of crypto trading — HODL (an internet meme or slang used to refer to holding the Cryptos). I am not a day trader like FX, nor a swing trader like stocks but a HODLER! I had a clear time frame in mind when I bought my first crypto investment last year & I am sticking to it. I do check the prices a few times during the day but only to see that I am moving towards my ultimate goal. I am not losing any sleep over it, I am not worried about the daily moves or the news of them being regulated etc. I only invested the amount I was willing to lose.
I am not saying that you can’t day trade crypto currencies, but then you should be ready to digest the volatility & following to the plan becomes even more important. My suggestion — know what you can risk to lose, follow the technical levels & don’t be greedy (book your profits)!
To help my novice trading fellows I post technical studies on crypto currencies, Forex pairs (USD Majors) & stocks on a daily basis. You can follow me on the Tradealike App to get real-time alerts.
Originally published at medium.com on January 14, 2018.