Cryptocurrency Trading Tips & Tricks

I used to do a decent amount of manual trading (on various exchanges). Below are some of the tips, tricks and strategies I’ve learned along the way. Note that these are primarily focused on manual trading but some can apply to trading with bots as well.

Long-Term Coin Fundamentals Don’t Affect Short-Term Trades You’re going to meet a lot of enthusiasts (for XRP, etc.) that will tell you to buy based on the coin’s specs, its future possibilities, partnerships, etc. In the long term (as in an entire year) this might matter, but on the exchange it doesn’t mean a darn thing.

Don’t be Fooled by Coin Hype You’re going to read a lot of hype from long-term holders trying to boost their coin’s value. For instance, Justin Sun and his TRON (TRX) advocates have been blogging forever about why it’s supposed to be amazing. Problem is TRX hovers at 4 cents, and rarely gains or loses more than 2%. Meanwhile NEO has an average daily swing of closer to 20%, and even ETH can swing 15% or higher on a good day. Base your decisions off past performance first, news second, hype as a very distant third, if at all.

Ignore The Mainstream Press but Do Know that ‘DAILY’ News Matters I see stories about crypto “crashing” on a daily basis, which in turn inspires FUD in traders, which in turn causes crashes. Ignorant journalists who’ve never actually seen an exchange are the ones writing these stories. The thing is, if it “crashes” on a daily basis and then bounces back up, it’s not really a crash. If you are trading you want that volatility, otherwise you can’t boost your gains on recovery. You literally hear BTC ‘crashing’ every week but if Bitcoin was going to die, by now it’d be long gone. Do remember that Daily News DOES Matter. When a big story comes out it does affect coin value. You can profit from news if you’re early with it. I’ve noticed about a 1 to 2 hour delay between the time most stories break and the value increases. Don’t ‘count’ on news to increase value though.

Be Careful with 3rd Party Trading Signals These groups give signals of coins that are ready to potentially move. That's their job. Your job is to get to know the coin and its movement along with the general market each day. You are the only one that can do this in real-time. Then if a coin acts well (i.e. volume is very heavy and the coin is moving easily out of the base) then that is the one to buy. Remember to buy as close to the trend-line as possible and the volume should come in at least 10 to 20 minutes after you buy (or even earlier) and if not by then, you know no one wants the coin and might as well check out early.

Don’t Chase Breakouts You’re in your exchange and suddenly you see one skyrocketing. Anyone’s natural impulse would be to buy the mooning coin. But what usually happens (sometimes within seconds) it crashes & takes you with it. Some of these fast breakouts and dumps are commonly referred to as Pump n’ Dumps. I personally have lost a considerable amount chasing breakouts. I’ve had to train myself to fight the impulse to buy when I see a fast-mover on its way up. You can learn how to read the signals and buy breakouts with 'semi-confidence', but it takes a lot of practice. Remember, when they peak fast, they crash even faster.

Pay Attention to Market Movements After the market has moved for a substantial period of time, your positions will become vulnerable to a sell off, which can happen so fast and hard you won't believe it. Learn to set new higher trend lines and learn reversal patterns to help your exit.

Trade Coins with Volume The higher the trading volume, the more predictable trends will be. When you’re looking at altcoins, try to find ones that have a significant trading volume. Keep in mind that low volume coins also have peaks & valleys, but if you don’t have a lot of people trading in it, then it only takes one major player deciding to do something strange to make it perform unpredictably.

Buy the Dips and Not the Peaks. The problem is knowing if it’s a dip or a larger downtrend. Most crypto has a natural peak & bottom typically on a daily basis. In the past I’ve found that some coins such as ETH tend to bottom between 1AM & 5AM Pacific Time, and they typically peak in early to late afternoon. If you time it right, you can hit the daily trend and make profit. Sometimes there’s an afternoon dip & evening high as well. Remember though, these trends can change without notice, and you can lose money if you’re not paying attention. Also remember that every coin tends to have its own trends. Don’t expect all coins to behave the same way as BTC or ETH does, especially if they’re low volume.

Don’t Rely Solely on Bots Most are running on 5 minute charts, which means they’re not as fast as you think they are. Their main advantage is being 100% focused on trading whereas you have a life to live.

Know When to Walk Away If you’ve made a couple of bad decisions in the day, your natural inclination is to keep trading & work your way back from it. However, that often leads to more bad decisions & more losses. There are other times when you’re fresh but the market stinks. There can be a temptation to dive in and make trades, but if nothing’s moving you can get yourself into trouble trying to chase small fluctuations that look like they might become trends. Sometimes nothing’s going on and you shouldn’t be trading in those conditions, it’s a recipe for losing money. Know when to quit for the day and walk away.

I’ll close by reminding everyone that If trading were easy everyone would be making millions. It's not; it takes a lot of hard work and long hours to fully understand. While I still do some manual trading, my lack of time has got my focus into Cryptohopper a Cryptocurrency Trading Bot. While not perfect by any means, it does allow you to somewhat automate your trading based on several strategies. I’ve been using the bot now for many months and will continue to do so. If you’re not familiar with Cryptohopper, checkout a write-up I did on it HERE. Also, if you want an in-depth user manual on how to setup and configure the Cryptohopper bot, I’ve written a 40-page user manual you can download HERE.