If it was possible to turn $200 into $1 million in three months, everybody would be doing it!
Crypto day trading sounds pretty exciting for a beginner. Wake up, place a few trades, earn some money and go about the rest of your day doing what you want to be doing. Well, trading offers the possibility of financial freedom and an amazing lifestyle but it also comes with a lot of risk.
Bitcoin trading is not a get rich quick scheme
One thing that is definitely common to all traders who are losing money in the markets is that they have unrealistic expectations. If you have $500 to trade with, there is no way on earth you are going to be able to live off your day trading. You might have been promised very high returns on very small investment amounts when you first heard about trading. You were told that you need some small capital to make a lot of money. Fund your account with $500 dollars and you’ll be able to gain 2-3 thousand dollars per week. Is this possible? Well. . . Not quite.
The only way that is possible while day trading the cryptocurrency market is to trade on small margin, staking on high leverage, be correct in all your price movement predictions, trade constantly and put back your profits into trades. This is an ideal situation that is not likely to happen. You cannot simply join the crypto market today, put in a small investment, put in very little effort and expect high profit levels. You have to take into consideration what you can realistically expect to make each month or week, given the amount of money you have to trade with.
Trading takes patience and requires consistency and not a gambling mentality. Anyone who approaches the trading world as some get rich quick scheme is very likely to fail and loose a significant portion of their capital within a very short period of time. Any real successful bitcoin day trader will tell you that trading is one of the most difficult things they have ever done. Bitcoin trading is simple but it will never be easy.
If it was possible to turn $200 into $1 million in three months, everybody would be doing it! When you are a beginner in trading you will lose at first. We all did. Consider this as an investment in yourself, the cost of training for your new business. Realizing that crypto trading will not make you a millionaire overnight is the first step. You have to have realistic expectations to become a successful bitcoin trader.
Experience is one of the most important factors behind successful cryptocurrency traders and experience is purely an outcome of time. Experience teaches some critical lessons:
- Learning from mistakes
- Improved knowledge, skills and understanding
- Improved knowledge of your own strengths and weaknesses
- Pattern recognition
- Conditioning of behaviors and responses
For every crypto trader, getting to the stage where you have acquired sufficient market experience and gained the required level of competence is a primary goal. The length of this period will be different for different people. We are all unique with our own particular set of circumstances. We are however, talking years here – and not days. This is a serious endeavor as all truly profitable goals must be.
One of the most important strategies a trader can adopt is to do everything possible to make sure that they stay in the game long enough to get good at it. This comes hand in hand with the first truth. We talked before about get rich quick schemes. One common feature of get rich quick schemes is that they will be marketed as investment opportunities that require no special skills and no formal education and still make you millions of money. No, it doesn’t work this way.
You will need to learn how to accurately read price charts, how to read, translate and generate trade signals, how to analyze the markets and how to accurately spot price trends in order to be successful. There are no shortcuts to bitcoin trading. It takes lots and lots of practice and experience to master. There is no substitute for hard work, deliberate practice and diligence.
Solid money management is required to achieve consistency
Most people who approach trading discard money management because it is less attractive than indicators, systems and practical trading strategies. Nevertheless, this is the core foundation of trading success. Without solid money management even the best trading system will cause losses.
Money management is probably the most important and most overlooked part of building a successful career in crypto trading. The fact that most traders lose money in the markets is not really surprising if you consider that most traders also have no money management plans. The basics of money management are derived from another simple trading truth; the outcome of any single trade is unknown. Each outcome – profit or loss – has a certain probability for occurring. The streaks of losing trades will occur even if your trading system is profitable. The purpose of money management is to make you survive the losing streaks and able to recover quickly.
Money management is a crucial element of trading the financial markets especially in times of volatility. It is a defensive concept that protects your funds so you can trade another day and underpins profitable performance. Anything can happen at any time in the markets and using a sensible money management technique ensures that the trader will be able to trade again no matter what happens.
A major reason why traders will fail even when using a profitable trading system is because the money management they are using simply does not give their system an edge long enough to play out over time. What set successful traders apart from those who fail over the long term is their money management skills. The basic aim is to manage risk by limiting market exposure at any given time to acceptable levels.
Your success or failure is 100% your responsibility
Bitcoin day traders tend to take the credit for success and blame someone or something for failure. When you earn money it was because of your hard work and brilliance, when you lost money it was because of a bad fill, a slow computer, an unexpected news story, bad quotes or a slow crypto market.
If you want bitcoin trading to be your career, your business, you need the truth. Your success or failure is 100% your responsibility. Think back to a time when you had a losing trade or made an error with your trade execution or had a bad trading day. Who or what was responsible for the result that you got? The market? The trading platform you were using? The weather?
One of the most important factors in becoming a high-performing trader and achieving and sustaining trading success is that you are responsible for your trading results. The results that you get in your trading are created by you. Understanding that the level of your trading success and the results you get is absolutely under your control is fundamental to becoming a high-performance trader and achieving high levels of consistent success.
It is easy to find other cause for your poor performance; to create stories that shift the focus away from yourself and onto external factors. If you’re doing this, you practically take yourself out of the learning and development loop. By not taking responsibility for your actions, you don’t enable yourself to reflect on what you did and what you could do differently next time. If you take responsibility then you will learn from your mistakes and eventually eradicate them. If you blame anything outside of yourself then you give your power away to that thing and you will repeat your mistakes. Losses are inevitable. Accept that, learn and move on to the next trade.
Crypto trading is a game of uncertainty and adversity
Trading the bitcoin and crypto market is full of uncertainty. The market conditions can change from day to day and trading strategies that have worked so well for so long can suddenly appear to stop working. Trading is a game that is won by those who can best deal with frustration, disappointment and adversity. Since trading has harsh realities full of losses, missed opportunities, draw downs and unforeseen events; those who can deal with these things will perform the best.
Crypto trading will always have ups and downs. The reality is that unless you can see into the future, you won’t be able to predict every market move. You will have losing trades and if you can’t accept that, then you’ll be unable to adapt to the ever changing conditions of the crypto market.