From the outside crypto trading looks very similar to forex trading. Technically it is, the same mechanics are used for both, however, the type of people that can trade crypto rather than forex vary quite a bit. There are certain elements to trading crypto that are very different and so require a very different mindset in order to do it successfully. We are going to be looking at some of the qualities that the best crypto and bitcoin traders have and which ones are required if you want to successfully trade bitcoin.
Must Have Patience
When we look at the crypto and bitcoin markets, there can be times here pretty much nothing happens. There have been times where the price of bitcoin has gone months without really moving up and down. Now with bitcoin, you can still make money with a ranging market, scalping little bits here and there, but the real money that makes a bitcoin trader successful aren’t the large moves that it takes both up and down. The problems that these do not come up very often, one or two every year or so. Due to this, a bitcoin trader will need to have a lot of patience, they need to be able to sit back and wait before putting on any trades. In forex it can be painful waiting a week, imagine having to wait for a month or even 6 months before putting on a trade, this is why successful bitcoin traders need to have a lot of patience and self-control.
Have to Always Be Aware
When it comes to bitcoin or any sort of crypto, you need to stay aware when you are trading it or even thinking of taking it. We say this because the news that comes out about it is not as mainstream as it may be for things like the USD or GBP. You need to be aware of what is happening, the latest scandal, the latest news release, and the latest uptake from a major company. Being on top of all of this can help you to choose the right tries to take and to also avoid placing trades at a time where things may potentially go downhill, especially when a scandal or scam comes to light. Be aware, keep on top of the news and be sure that you are always checking rumours before placing trades, as even rumours can affect the bitcoin markets a lot more than they can things in the forex markets.
Need to Always Be Prepared
The markets can shift at any time, this is similar to the forex markets, but you often have a lot more of a warning on the forex markets than you do with the bitcoin markets. Bitcoin can change within minutes of news coming out and due to this, you need to be ready to go as soon as that news comes out in order to help protect your trades or to quickly put a trade on before the new movement has finished. So if you work a full-time job then you can miss a lot of opportunities. Of course, it is best to have a stable job, but the most successful traders often have jobs that allow them to jump on their phone at any time or they simply stay at home, waiting and being ready to make a trade.
Need to Accept Risks
There are a lot of risks when it comes to trading bitcoin, far more than there is with forex, and let’s be honest, there are a lot of risks when trading forex too. The reason why it is considered riskier than normal forex trading is the fact that it has an extreme amount of volatility, the markets can jump up and down thousands in just seconds. If you are not careful, then your account can go from being in profit to blowing in a matter of seconds. A good bitcoin trader will understand this, they will either have the money there and already consider it lost (which is a good rule of thumb anyway) or they have very strict risk management tools in place to protect the account. The risks are there and the risks are far higher than they are with regular forex traders, so if you do not like risk, you most likely won’t like trading bitcoin either.
Ability to Withstand Drops
Bitcoin can be an emotional rollercoaster, for both those trading and those holding onto it, it can have incredible rises, but on the other side of the coin are the incredible drops that it can also have. For many, seeing the value of bitcoin plummet while trading or holding can cause real emotional strain and can cause a lot of stress for the holder or trader. If You are planning on trading bitcoin then emotionally, you need to be prepared for these huge drops, you need to be aware that they will happen and you need to be able to withstand it, both financially and emotionally. So if you get stressed by losses or drops, then bitcoin trading may not be the best asset for you to trade.
An Eye for Details
We know that bitcoin has huge movements both up and down, but the markets often go sideways. When the price is going sideways you need to have an eye for details if you wish to be profitable. You need to start scalping the tiny movements up and down, in reality, those tiny movements could be hundreds or even thousands dollars when put into perspective with the overall price and movements. You need to be ready to place trades for these little movements, it can be very risky, as a breakout could happen at any time, but keeping an eye on the details like news, rumours, companies using bitcoin, and so forth will enable you to trade these sideways markets and still profit in the perceived slow times for bitcoin.
You Need Money
You need a lot more money to trade bitcoin than you do forex. This is basically because of the size of the assets that you are trading and the amount of volatility in the markets. So those really successful bitcoin traders will have a healthy account balance to begin with. Yes, you can trade with $100, but that entire balance will be at risk with each trade, not something that would be recommended at all. You Are looking to trade bitcoin successfully then you will most likely need a slightly larger balance than you do with forex.
Those are just some of the traits that successful bitcoin and crypto traders will need, it is a very different thing to trade bitcoin than it is the normal forex markets. The movements are far more volatile, accounts can blow very easily and so it is far more stressful. News events can have instant and huge effects on the market and you certainly need a lot more money to trade it successfully. If you are planning on trading bitcoin then you need to be aware of these things, you need to accept the risks and you need to be ready to trade at pretty much any time.