How to Consistently Profit from the Cryptocurrency Market

One of the most popular trading instruments these days is none other than cryptocurrencies. Bitcoin, the pioneer cryptocurrency, was launched in 2009 by Satoshi Nakamoto. No one had imagined at that time that it would turn out to be such a huge success and would spawn an entire industry. Cryptocurrencies are in high demand nowadays and there are more than 5,000 crypto coins that you will find in the market. People from all over the world have expressed an interested in trading cryptocurrencies because of their profit potential and the market has also become accessible.

However, it is important to remember that not everyone walks away with profits from the cryptocurrency market. It is known for its volatility, which can go both ways. This means you can either make high profits or you have to deal with substantial losses. The key is to learn how to control your losses and to consistently earn profits from the cryptocurrency market. Here are some of the ways you can accomplish this:

Manage your risks effectively

Also called money management, risk management is one of the most important elements that can ensure consistent profits in cryptocurrency trading. With risk management strategies, it is easy to protect investors from dangerous and large losses by restricting the amount they can lose each day to a specific percentage of their total account size. Generally, disciplined traders can cap their daily losses at anywhere between 2 and 5%. These risk management tools are provided by most reliable brokers, such as Wize Capital, and you can use any of them to keep your losses in check.

Make disciplined decisions

It is essential that cryptocurrency traders never allow their emotions to have an impact on their trading decisions. You need to come up with a trading strategy that can give results in a demo account and then implement it with disciplined precision in a live account as well. You should always stick to your selected entry and exit triggers, time cycles, profit targets as well as risk management guidelines in every single trade, even when you are using a demo account.

In fact, a demo account gives you the opportunity to make tweaks or any other changes necessary for perfecting your trading strategy. In this way, you will be able to earn consistent profits when you use this strategy through a live account. Making changes at the last minute due to emotional reactions is not a good idea as this will skew your win/loss ratio.

Look at the bigger picture

You cannot make your cryptocurrency trading decisions in a vacuum. Opt for a professional broker that can provide you with an economic calendar for keeping track of notable news releases that are expected within your trading period. Brokers like Wize Capital provide their clients with this essential trading tool. You can mark these important events on your charts. Such news releases can have an impact on the cryptocurrency market and cause trends to unexpectedly change momentum or direction.

You should always use multiple sources for information when making trading decisions. It is a good idea to consult several indicators at once as this will give you added confirmation. Moreover, you should also pay attention to price patterns and check the strength of the trend on different time frames for increasing your confirmation and boosting the profitability of every trade.

Know what is drawdown and profit

There is a bit of a drawdown in every crypto strategy, which means that no crypto trading strategy will make you a profit on every single trade. Every trader needs to train themselves to consider profitability in longer time frames, like weekly or monthly. You need to set your goals in terms of the overall profit you wish to earn. Any trading strategy that has a profit factor greater than one will turn out to be a profitable one because it will help you in earning more money than it loses over a span of time. Your cryptocurrency broker should be able to provide you with a detailed history of your trades, along with statistics, at any given moment to help you track your performance.

With these tips, it will be easier for traders to earn consistently through the cryptocurrency market and keep their losses under control.