The world of crypto CFD trading is expanding, with enthusiasts using CFDs to amplify results way above the baseline.
We are here to help you understand how to get started with crypto CFD trading as a beginner with some simple rules or guidelines that can help you better manage your cryptocurrency trading account.
Our 10 Rules For A Happy Crypto CFD Trading Account
CFD trading in general is growing, and there a vast number of tips to trading CFDs successfully that will also help you in the crypto markets. The learning curve is steep with CFDs, and as such, you would be well advised to take some time learning about all the fundamental basics of how CFD trading works, before moving on to actually trading the market. Once you have done that, feel free to delve deeper below into crypto CFD trading.
When trading cryptocurrency, particularly as CFDs, there are a few key things to keep in mind in order to be successful. Here are 10 crypto CFD trading rules that you should keep in mind :
1. Have a plan – Before you trade, you need to have a clear idea of what your goals are and how you plan on achieving them. Despite the occasional temptation to take shortcuts, do not open a single trade without a plan, it’s easy to get lost in the sea of information and make impulsive decisions that can end up costing you money. Within your plan, you should know your target entry, exit, and risk you are prepared to take on the trade.
2. Do your research – It’s important to have a solid understanding of the asset you’re trading and the market conditions. Without this knowledge, you’re more likely to make mistakes that can cost you money. Not all cryptocurrencies are created equal, and some crypto CFD assets will be significantly more volatile than others. Having a detailed working knowledge of the crypto CFD you will be trading, and the data points, or communities that you need to watch is vital if you are going to be successful long term trading crypto CFDs.
3. Use stop-loss orders – A stop-loss is an order to sell an asset when it reaches a certain price. This helps you limit your losses if the market moves against you. This is a rather universal trading rule, but in crypto CFD trading more than most assets, this could be deemed to be even more important. The volatility within the crypto market calls for even tighter controls on your risk; with stop losses being a great way to keep a tight rein.
4. Take profits – Once you’ve made a profit on a trade, it’s important to take some money off the table. This helps you lock in your gains and prevents you from losing money if the market turns against you. This rule may seem obvious, but you would be surprised at the number of traders we see that leave profits on the table because they did not follow their own plan in regards to target price. If you are one who struggles to exit a winning position, put in place trailing stop orders, that will allow your trade to run whilst it is moving upwards, but locks in profits if the markets take a turn.
5. Manage your risk – It’s important to always manage your risk when trading and a significant part of being successful at crypto CFD trading is staying in the game, and building your account over time for when the big moves do come in your favour. You can manage risk by never risking more than 1-2% of your account balance on any single trade. This way, even if you have a losing trade, your account won’t take a big hit and you live to trade another day.
6.Control your use of leverage with crypto CFD trading – When trading cryptocurrency CFDs, you will have the option to use leverage. This means that you can trade with more money than you have in your account. While this can help you make bigger profits, it also increases your risk. So, it’s important to only use as much leverage as you’re comfortable with and never more than you can afford to lose. Leverage control ties in with your risk management, and is a vital rule to pay attention to.
7. Be patient – One of the biggest mistakes new traders make is trying to force trades. Just because you see a promising opportunity doesn’t mean you have to take it. If you wait for the perfect setup, you may not find a trade every day, but when you do, you’ll be in a much better position to make a profit.
8. Have discipline – In order to be successful at trading, you need to have discipline. This means sticking to your plan and not letting emotions get in the way of your decisions. When markets are volatile, it can be tempting to make impulsive decisions. You’ll be in a much better position to make consistent profits if you stick to your plan and resist the urge to trade on emotion
9. Don’t overtrade – Another mistake that new traders make is trading too much. You might see a market that looks promising and feel the need to trade it, but don’t do that without following your own plan. If you find yourself making trades in more than 3 markets as a beginner, it’s likely that you’re overtrading. This can lead to impulsive decisions and ultimately, losses.
10. Have realistic expectations – When you first start trading, it’s easy to get caught up in the excitement and think that you’re going to make a fortune overnight. The reality is that most people don’t. In order to be successful, you need to have realistic expectations and understand that it takes time, effort, and discipline to make consistent profits.
Summary
These 10 crypto CFD trading rules, will put you in a much better position to make consistent profits over the long term, assuming you have a good trading strategy to go along with it!
Just remember that success doesn’t happen overnight, and it takes time, effort, discipline, and at times even a little luck to be successful. So, be patient, stick to your plan, know the markets you are trading, and don’t let emotions get in the way of your decisions.
If you can do all those things, you’ll be on your way to becoming a successful crypto CFD trader.
