Crypto trading tips that actually work are really hard to find today. Most of what’s out on the internet are just a bunch of click baits to lure in readers. Today I’m going to share with you what I’ve learned so far over my years of investing in the markets. I’ve written down 15 crypto tips for traders that are easy to follow and that will work if you stick to them.
The trick is to learn only one at the same time. If you try to implement them all in one go, you will most likely explode with frustration because it takes time.
It takes time to build a solid mental framework for crypto. You should not expect yourself to learn these tips in an instant. But if you are committed to learning them, it will make all the difference for you.
The trick to trading cryptocurrencies profitably is to use your strengths as a trader and try to avoid your weak sides. This is where we put rules into practice. Rules come from tips that you hear from a friend or read online. When you create a rule, it’s for two reasons:
Maximize your potential
Minimize the damage
When you start your journey you are bound to make a lot of mistakes that will make you lose money. The trick is to realize what you are doing wrong and stop yourself from doing that again. It takes time and it’s very difficult, to be honest with yourself about any mistakes you might be making. This is one of the reasons it’s so hard to become a good trader. Most people are not comfortable with criticizing themselves.
This is where you need to be different. You need to be able to objectively look at the day or the week and see what went wrong.
Sometimes we make the most ridiculous mistakes, but that’s ok. The trick is to realize we made a mistake, write down what happened, and also why it happened.
This will become the start of your new development as a trade. Once you get used to looking at your own mistakes and take responsibility for your actions, the rest gets a lot easier.
Let’s take a look at my top 15 crypto trading tips to help you become a more profitable crypto trader.
Top 15 Crypto trading tips that work
1. Only trade your own setups
You have probably heard this one before, but what does it mean? For a beginner trader, this doesn’t make much sense.
“I am trading my own setups if I’m sitting in front of the charts.”
When you have been trading your cryptocurrency for a while, you start to learn the behavior of the coin. This behavior will create a pattern every day and every week. The more you study your coin, the more patterns you will find that repeats over and over again.
With good practice, you will learn what behavior and what setups are your favorite setups. These are the setups that will be profitable most of the time or at least make you money.
This will take some time to develop for every trader, so be patient.
When you study your cryptocurrencies and there are no patterns to trade, it will get boring. Days will pass without any good setups lining up and you start to get frustrated because you want to make money.
While doing nothing feels like you are not trying to make money.
This will make you even more frustrated and you might end up entering the market without the signal of your own setups.
When this happens, you will most likely end up in a bitter stop loss while throwing your capital in the arms of the broker.
So, when you are scouting for the next good trade. Give the market time, good trades always come around.
Only trade your own setups.
When they come it’s obvious.
Great traders never have to look for good trades, if you have to look for a trade, there probably is no trade.
2. Use the correct stop loss
This crypto tip is also a common one but many traders struggle to use the correct stop loss.
If you don’t use a platform with a stop-loss order, read our guide on crypto exchanges with stop loss first.
“What is the correct stop loss for crypto trading?”
The answer is much easier than you might think.
Before entering your stop loss you need to know two things:
- How much money can I risk on any one trade?
- What is the average range / volatility of the current coin?
To find out how much you are willing to risk per trade, simply take 1% or 2% of your total capital. This is how much you should risk per trade to stay safe.
You can also divide your current capital by 10 and then divide this result vid 10 again. This will give you your 1% risk.
The second thing you need to know is the average movement, range, or volatility of the cryptocurrency you are currently trading. But why is this so important?
Most traders, around 70% – 90% get stopped out by normal rotations of the market. Regular up and down movements occur every day.
In general, crypto traders use a stop loss that doesn’t allow the market to freely move in the direction it’s heading. Instead, most traders use a stop loss that’s too tight and they get stopped out in minutes after putting on the trade, sometimes seconds after.
To avoid this you need to zoom out a little bit and take a look at what the average movement of the market is.
You can also use an indicator called Average True Range, or ATR for short. This tool will help you analyze the average range of the market.
What you do next is to put your stop loss at a safe distance outside of the standard rotations. Don’t put it too far out because your stop loss will be too wide and you will lose size. Just enough to not get caught by the market.
The more you practice the better your stop losses will be.
Also, many traders are saying that if they put the stop loss at this distance, their position size will be very small.
In the beginning, as a trader, your capital and position sizes will be small. That’s normal and you have to work your way up slowly.
So, use this tip every time before you enter the market. It will save you money and frustration.
3. Trade what you see
This tip goes hand in hand with how to read crypto charts.
Before you can start making money with cryptocurrency, you need to be able to read crypto charts very well. The trick to “trade what you see” is very simple and you can learn this today.
The difference between trading what you see and what you believe or what you heard from a friend is very small.
When you are looking at the cryptocurrency you are trading, you will start to learn how it trades. With time you will start to learn the story behind the price patterns, but this is more advanced.
Many traders do not listen to the price charts very well. If they did, they would do much better.
What I mean when I say listen to the charts I refer to this.
The charts will tell you a story about what’s going on. If there is negativity or positivity in the market. And also how positive or how negative the market is.
For many traders, it’s very difficult to get to the point where they can listen to the market and trade with the market. It takes many years to get to this level, but if you practice a lot, you will get there
Sometimes when there are very few opportunities in the crypto market, traders get frustrated and sometimes very sloppy with their decisions. This is when traders start to look for other signs of entry into the market.
It’s very dangerous because now the trader starts to listen to his friends, the news, or Twitter.
Even if the market is telling the trader that there is no trade today, or this week, the trader has the urge to enter the market. This is human nature telling the trader to “DO SOMETHING”.
It’s not normal for a person to do nothing while at work, even though this is the case most of the time for traders.
So, when you are analyzing your charts and your cryptocurrencies, you need to trade what you see, not what you want to see.
If you can’t see the trade, there is no need to ask a friend or look for good trades on Twitter, because they are not yours.
If there is no trade today, wait a little.
Be patient and trade only what you see.
4. Don’t read the news
This crypto trading tip is something I learned the hard way.
I was reading a news source online about how the crypto market was about to explode. This was of course signed by some analyst.
This was so interesting to read and it really felt like the argument for the market to explode was spot on. I could not believe for a second that the market would do anything else than explode.
What ended up happening was the market tanked over 40% and I lost a chunk of my capital to the market makers on Bitmex.
Now I’m going to tell you why it’s so dangerous to read the news.
First I want to tell you how hard it is to predict the market correctly.
Out of all the professional traders on Wall Street, big institutions, and money managing firms, the win ratio of the best traders is around 50%.
This means that every second trade they expect to lose.
So, by listening to the best traders in the world you should only expect to earn money 50% of the time. I didn’t know this was true until I did some research. In fact, the number is even lower for most of the traders, this 50% statistic only applies to the best traders.
Back to the news story.
The people working for newspapers or online news sources have one job and one job only.
To create very readable content.
Absolutely no one on a news magazine has enough of a trading background to accurately predict any market. No less the cryptocurrency market.
So the next time you see a news article about the market, bitcoin, or any cryptocurrency, don’t read it.
It will give you no value at all. The only thing it will do is create an illusion that there is knowledge behind the writing.
So, if you want to make money trading cryptocurrencies, never read the news.
5. Don’t follow other traders ideas
If some random guy stepped up to you on the street and said “give me 100$ now and I will return 150$ tomorrow”, would you trust him?
Probably not, but why is it so easy for traders to take other trader’s advice with their own hard-earned money?
If you are serious about becoming a crypto day trader or swing trader you need to be able to listen to your own judgment and follow your own guts.
The best decisions are only made by yourself because you know why it’s a good decision.
When you listen to other traders online they know why this trade might work out or why it won’t. But you have no idea how to use this information.
They leave you with the final result of their own analysis and it’s up to you to handle it from there.
It’s almost like someone creating a machine with a lot of different parts that run the machine and you are asked to maneuver it.
It would be pretty hard to even understand why the machine runs as it does and what to do when things don’t work out.
The same goes for ideas that come from other traders.
I must say though, it took me years to realize this so I don’t assume you will learn this overnight. As you progress in your trading development you will start to open your eyes and understand why only your own ideas will work for you.
So, the next time you hear some advice from another trader, realize how many years it took him to learn the skills to come up with that idea. Then see how impossible it would be for you to adopt the idea and make every right move in the market.
Only follow your own ideas.
6. Don’t trade just to trade
What is the biggest hurdle to becoming a successful crypto trader?
It’s the same hurdle every trader is fighting within any market. The hurdle of human emotions.
When you start your trading journey you have no idea what to expect, and most new traders do not know why it is so difficult.
The biggest obstacle to pass before you can become a profitable crypto trader is to understand and control your human impulses.
Nothing about trading is normal, think about this.
You work for 5 to 10 hours per day and you might end up losing 500$ or even more.
This risk combined with the uncertainty of the market makes it a very unsafe professional practice.
What makes it even more “dangerous” for most people is that the market doesn’t allow you to trade every day. Sometimes not even every week.
The market might be in a very low volatile period and there is nothing to trade, at all.
This is when most traders feel like they are making something wrong by only sitting on their hands for 5 days.
In fact, traders will get very frustrated and trade based on these emotions. They simply have to trade to tell themselves that they are doing something.
This is when it becomes very risky when you start trading only to silence the impulses that arise from doing nothing.
There is no analysis of these trades and they are forced onto the market with imaginary setups based on subjective thoughts about the market.
“The market has to turn, it has to start moving now”
“It’s been dead for one week, it’s ready to move”
“This is too cheap, I can’t let this pass”
These are some very normal thoughts you might think while doing nothing for a week, or two. The trick is to not listen to anything else than the market. If there is nothing to trade, there is nothing to trade.
You are better off reading a book about cryptocurrencies.
Learn to control your human emotions and impulses. That’s what trading is about.
Don’t trade just to trade.
7. Write down your trading setups
You will not understand why this is one of the best crypto trading tips until you try it. If you don’t try to write down your best setups you will not understand why it’s so powerful.
The only way to understand is to do it.
If you write down your top 5 setups or if you only have 1, that’s okay, you will start to see them much clearer.
Write down what has to happen in the market, what kind of behavior you need to see and which price patterns need to occur for your setups.
When you write it down in a document you cement the idea behind the setup. You will start to see the setup much more clear in the market and you will also start to see when there are no setups as well.
Your setups will become more second nature to you and you will recognize the setups much faster and earlier.
Another thing that will happen is that you will start to form new setups because you become so good at describing your current setups.
But of course, you will not understand this until you start to actually write down your own setups in detail, as good as you can.
If you want to take one step closer to making money with cryptocurrency, start writing down your setups.
8. Analyze your trading mistakes
How many mistakes have you made this trading week?
If you don’t know you are falling behind. You need to be able to explain what kind of mistakes you’ve made and also describe why you made them.
Mistakes come in many different shapes.
- You can trade too big
- You can trade too often
- Not trade at all
- Listen to a friends advice
- Read the news
- Trade because you want to make money
- Trade then you are tired
- Take a wild chance in the market
- Trade with hope
The list goes on and on.
The trick is to recognize that you made a mistake and accept it. When you truly accept that YOU made a mistake, only then can the process begin to reverse the mistakes.
Mistakes are like levels.
When you reach a level your job is to understand it and go through it.
What most crypto traders struggle with is analyzing the mistakes and answer the most important question.
“Why did I make that mistake?”
When you figure out what mistake you made and why you made it, only then can you start reaching new levels?
There is always something inside you that causes a mistake. You need to figure out what triggered the mistake.
- Were you frustrated?
- Did you want to make money right now?
- Was it because every one else is making money?
- Did you just have to be in the market?
- Did you feel like to gamble?
- Were you tired?
- Do you think trading is easy?
- Are you not taking trading seriously?
This list goes on and on as well.
Whatever triggered you to click Buy or Sell is up to you to find out.
Dig within yourself and if you can be honest with yourself the reason will show.
If you find the answer you can start to fix the mistakes by recognizing you are about to make a mistake before you make it.
This is pretty amazing when you learn how to stop your own mistakes. It’s also very profitable.
So, if you want to learn how to make money consistently as a crypto trader, analyze your mistakes.
9. Don’t fight the market
How many times have you tried to short a top that wasn’t a top, the market just kept on grinding up?
This happens to every trader.
It’s very frustrating and it feels like you are targetted by some evil crypto god whose only job is to punish you.
Don’t worry, I have the cure for this and it’s easier than you might think.
The reason why you can’t seem to get the short positions right or why you can’t ever buy a bottom in the market is because you are trading with a subjective idea.
For some reason, you just happen to think that the market is too expensive or too low and it has to turn. Literally, every trader has had these thoughts so you are not alone.
When I was learning how to trade I was so frustrated with this so I started to ask myself what was going on?
Why am I fighting the market over and over again when I can’t beat it?
The truth is that you are not fighting the market, you just don’t know what a positive or negative market is.
If you knew what a positive market behavior looks like or what a negative market behavior looks like you would not have this problem.
So, my first advice would be to practice extra hard to understand your own market first.
If you need to, take a few weeks off from trading and only focus on understanding your market. How is it behaving when it’s positive and when it’s negative?
When you learn this, you will stop shorting what you think is a top and instead buy the dip that will come in a few days.
You will also stop buying what seemed like a bottom before, you will wait until the market bounces so you can short sell it.
Don’t fight your market.
Learn how it behaves instead.
10. Learn to take profits
It sucks to give back money to the market, especially when you have made all the right decisions and you are in the money on the trade.
How many times have you seen your good 10% or 20% turn into a loss of -25%?
The reason you can’t seem to learn how to take profits in crypto is that you are greedy.
It’s that simple.
You also think that this is the last profitable trade you will ever be in so you have to squeeze the last penny out of the market because this will never happen again.
That is not true.
The market is literally full of opportunities.
To change this behavior of yours you need to change your mindset about your trades.
First, realize that there will be many profitable trades in the future. This should make you a little bit more relaxed.
Then, understand that you can’t hit mega winners every time you put on a trade.
To really be a good trader you need to understand when to hold and when to fold a trade.
And this takes time.
Don’t be in a hurry to become a master at this because you need practice. So focus your attention on taking profits at a fixed % on the next trade.
Ask yourself before you enter the market.
“How much can I expect from this market?”
Is it 5%, 15% or 25%?
When you have your estimated number, lock it in for the future and make a promise to yourself to profits when this target hits.
If you can do this you will take a huge step forward in your development.
More advanced versions of how to take profits will come with experience so keep practicing.
Remember to plan your trade and take profits off the table.
11. Leave your ego outside
Cryptocurrency trading is lonely, especially if you are serious and want to make real money.
Have you ever thought about how much money everyone else seems to make out of the market every year? And how many cool cars all the crypto traders on Twitter have.
Let me tell you one thing.
Most of it is fake and not true.
You need to understand that most traders on Twitter are not making the money they say they are making from trading. They probably have another side business that provides for them.
Trading is hard, it takes real effort to succeed.
If you want to make money trading cryptocurrencies you need to forget about everyone else and focus on yourself.
It’s all about you and what happens to everyone else doesn’t have anything to do with you. You should only look at your own path and your own progress.
That’s what matters.
You should focus on becoming a better trader every day. Take small steps towards your goals and grind.
It doesn’t matter how much money everyone else is making if you’re not serious enough with your progress.
What is more important to you?
That you compete with other traders or that you have a steady growth every day and every week?
You pick what’s most important to you and if you leave your ego outside you will speed up the process.
12. Lose small
If there is one rule that stands out by professional traders it’s to not lose your money. I will tell you why this is so important.
If you lose big on your trades you can’t have a positive expectation of your trading results.
Big losses cut your business.
Think of it the other way. What would happen if you started to win big very often? What would happen to your account size?
It would grow, definitely.
Now reverse that idea and you have the reality of big losses. It’s kind of scary but when you think about it this way you can really see the damage it does.
Also, as you get more experience, your profitable trades will take care of themselves. The only thing you have to do is to avoid big losses.
Imagine for every trade you put on, you aim for a big win. You will not close the position until you have a big fat profit to take home.
Now, combine that with avoiding any big losses. What will that result in?
If you have this mentality when you trade you will certainly not take any big losses.
But you will of course not take big winners every time. But what will happen is that once in a while you will hit a really good trade and the profit from that one trade will be enough to support your trading for months.
Remember, lose small and aim big.
13. Learn when not to trade
This is a tip I want to highlight. You don’t need to trade every day or every week.
Because there are not that many great setups in the market and if you keep trying to find them you will throw away good money at bad setups.
I would say that there are approximately two good setups every month in the crypto market. On average. Sometimes there are four and sometimes only one.
What you need to do is to learn what a good setup is and then realize when there is no setup to trade.
If you can do this, it will become boring to trade but more profitable.
The market needs time to accumulate before a good move and it also needs some time to unload supply before it turns back down.
It takes time for the market to turn, both ways.
When you see this it will become clear to you that you can’t be in the market all the time.
Also, if you are trying to enter the market every day you are aiming for too small movements. Some people can scalp the market but it’s not for most people.
If you see that you lose money too often, that you have no quality in your setups, and that you have no confidence behind the strategies, step away from the market and wait.
While you are not in the market, analyze what’s going on. Read the story the market is telling you and wait for your setup to come around.
When you are waiting for the next good setup, other traders are trading in and out of the market every day laying the foundation for your next big move.
If you learn when not to trade, you will also learn when to trade.
14. Don’t trade too big
It will take you a few years to realize that trading big is not going to make you money.
What will happen is you will stop yourself out too soon and too often. Your trades will become very difficult to stand and you will not feel comfortable.
The solution to this is to understand that bigger trades will not make you more money. They can make you more money if you enter the market with laser precision.
Most traders can’t do that and it’s nothing to strive for.
Instead what you should do is to take the slow game. Take a few steps back and cut your position size to a level you feel comfortable with.
You should trade a size where you don’t need to watch the market while you are in the trade.
You should be able to put on a trade and leave the computer for a couple of hours and then come back to see the results.
You will make far less money on each profitable trade, but you will make far more profitable trades, that’s for sure.
This is something you will not learn until you either learn it the long and hard way or before you actually try to implement it yourself.
You might say that this will never make you any money and that’s not true.
It will not make you money today or next week. But if you stay consistent and increase your position size only after good trades you will start to trade bigger sizes with time.
So, if you are the kind of trader that is taking on too much size, take a step back and accept that it’s not the way to go.
You only trade too big because you want to make money quickly, but that’s not going to happen in this business.
If you don’t believe me, I dare you to try one month of trading with only 10% of your position size.
Then take a look at your results at the end of the month.
15. Have a curious approach to your positions
For most traders this tip is new but I will explain why it’s so important.
When you enter the market with any position you will naturally have expectations, either good or bad.
What happens when you see the result of your position is, you get excited and happy or mad and frustrated.
These emotions will control your trading in ways you can’t even imagine. If you have a string of winners you will be very excited for the next trade and you will get overconfident that you will win again.
If you have a series of losses you will get shy and the conviction of your positions will be very low.
Here is how to fix this and how to have the correct view of your positions.
Whenever you are about to enter the market, long or short. Think about your position like something that is not at all connected to you and the only thing you want to know is:
- What will happen to this position?
This should go through your head with a very neutral bias before you enter the market.
You should not care if it’s a winner or a loser, you should only have a very curious attitude toward the position.
Almost like you don’t even care about what’s going to happen.
If you can learn how to keep this distance between yourself and your position you will be one step closer to making money as a cryptocurrency trader.
These are my personal top 15 crypto trading tips that will actually work for both beginner and advanced traders. I would suggest that you read through them all one time and after that, you select one or two to work on.
I would not recommend that you take on more than two at the same time because it will be too much.
Learning how to trade cryptocurrencies takes a long, but if you learn these tips you are well on your way.
If you are only interested in a few of the tips, use the content table to navigate through the article.