There are many skills that can improve your chances of success when you begin trading cryptocurrencies. These skills are common but most people will find that you need to focus on improving certain aspects of your strategy as you learn each trait. The great news is that anyone can improve these skills and become a better crypto trader. Here are the best skills for crypto traders in 2023.
Discipline
The first skill that you will need to master is discipline. It takes a lot of discipline to trade any asset successfully. The market is an unpredictable thing that can have you second-guessing your decisions the second you make them. Only disciplined traders will have the wear-with-all to survive the constant changes.
Discipline will also help you to stay steadfast in your long-term goals and strategies. For example, there are many ways to accumulate digital assets. One of the best ways is using a method called dollar cost averaging. When you DCA, you seek to make regular purchases of your asset over time. The fluctuations in price even out as you wait to find the lowest average cost over time.
This method of building up assets is very effective but requires a lot of discipline. If you start skipping by purchase dates, you’re going to throw off your average. The same goes for if you try and only buy when you think the timing is right. The chances are higher that you are not going to be able to predict the future. The best approach is to stick to your original plan.
Discipline will also help you when you make a decision. The best traders will have a present checklist of requirements before they enter a trade. They will also stick to the script. They will have preset entry and exit points that ensure they improve their ROIs without increasing their risk exposure.
Discernment
You are going to need to have the ability to discern between real opportunities and scammers or those promising the work. The sad fact is many new traders are so eager to secure some returns that they will enter into anything that sounds great. If it sounds too good to be true, 99% of the time it is. A better option is to take a measured approach.
Discernment is all about mastering the skills of judgment and insight. The first step is to be realistic about your goals. If you think you are going to get rich overnight, then you are probably going to gamble away your funding in no time. A more measured approach would enable you to step back and fully examine the merit of the project.
Discerning traders aren’t going to fall for sudden pumps and dumps. They have done their research and they understand that there are some traps that new traders fall into that can be avoided by removing emotion from the equation. The best traders rely on reason and experience. These two factors will take you much further than luck and guessing.
Research
Another vital trait you need to have is the ability to conduct research. The nature of the crypto market is that you need to be able to do independent research into any project you want to trade. This strategy is more time-consuming but it ensures that you don’t get caught up in a scam or fraudster
It doesn’t take much research to tell if a project is a scam. For one, they will always promise the world and even if they are delivering at first, the tap will run out. This is how Ponzi schemes work. The original participants get paid using new capital from traders entering the project.
There are some key details to seek out in any project. For one, check their whitepaper. Here you can find vital insight into the project’s technology, goals, and development team. It’s recommended you stick with a network that has technology that is already in use. This way you avoid trading projects that are all hype.
Once you master researching your projects, you’re going to find it much easier to find the gems in the market. You will also be able to follow specific developers to ensure you get quality projects in your portfolio moving forward. The main thing to understand is that you don’t need to rush and shouldn’t be scared to speak to the developers directly to add another layer of validity.
Adaptability
You are going to want to be adaptable if you want to succeed in the market. Adaptability comes down to not being too rigid in your methods and structure. The market is a fluid environment that requires you to think on your feet. If you are unable to adapt, you may find that you ride a sinking ship into oblivion or miss other prime opportunities when they arise.
Adaptable traders are better suited to the market for many reasons. For one they can leverage new technologies such as trading bots which can improve results. These options remove emotion and provide you with 24/7 monitoring capabilities. Other cool options can help improve your results without taking up your time such as social trading.
Social trading networks enable you to follow a lead trader for a subscription. Every trade they make, your account duplicates. This approach is ideal because you can learn and earn. It also allows you to follow a variety of different traders to expand your techniques and skills to new heights.
Adaptability also comes down to knowing what technology is the best option. For example, the introduction of haven assets like META 1 Coin changes the game. Now there are stable options that protect decentralization and prevent whale manipulation. The META 1 Coin is backed by a basket of gold-related assets and blocks non-humans such as trading firms from the market.
The token improves stability by leveraging a basket of gold-related assets. Additionally, there is value locking mechanisms that prevent the token from being tanked. Specifically, there’s an asset value protection that cross references all trades against the current asset value before approving the trade.
This feature is combined with a $5M token limit on individual traders. This limit ensures that there isn’t a single trader with the capability to influence the overall price of the token. The restriction came into play after a crypt-backed stablecoin called UST failed following a massive whale sell off of its underlying asset LUNA.
Consistency
Another characteristic shared by most traders is consistency. You need to set up a schedule and stick to it, if you want to be successful. Being consistent is about being on top of your trades and looking for trends. You need to stick to your plan if you want to achieve your goals.
It’s not a good thing when you are easily swayed and change your goals. This approach can lead to a fickled and shaky-handed approach to the market. You don’t want to be a speculative trader. It’s much better to be informed and steadfast in your decisions. Notably, you can leverage technology to improve your consistency.
Managing Risk
You should be good at managing risk if you plan to trade digital assets. The overall new nature of the tech and options can make some options riskier than others. There are very few places in the world with a regulatory framework for digital assets. As such, you may find that it’s on you in terms of losses due to fraud or scammers.
This Wild West feel has led many people to seek out regulatory-friendly options. Reversely, many love the open and innovative nature of the market currently. They seek to remain transparent and provide out-the-box solutions to users. You need to see where you fit in on this spectrum.
The best option is to diversify your holdings. You want some very stable assets like META 1 Coin and other that may fluctuate more like Bitcoin. By diversifying your holding you are buffered against major losses. You also improve your ROI potential greatly. It is recommended that you diversify your savings across other asset classes such as real estate as well.
Developing Trading Plans
Trading is all about planning. The best planners will have contingency plans in place as well. When you have a plan it’s easier to track your progress. It also makes it much easier to see if you are off course. You don’t want to fly blind because by the time you realize where you’re at, it could already be too late.
The best traders have a direct plan that they stick to. Having a plan and being consistent go hand in hand. For example, it is normal for day traders to have very strict margins when they trade. They may conduct hundreds of trades in a day with each securing a little more profit.
This strategy works because, at the end of the day, they tally up all their rewards. If they didn’t stick to the plan, it is going to be harder to see what areas could be improved and how to streamline their processes. In the end, having an organized trading plan is a recipe for success.
Self Evaluation
Another vital trait you need is the ability to evaluate yourself. This trait can’t be understated as many traders fail simply because they aren’t able to evaluate their scenario from the start. You need to know how much time, funding, and overall commitment you can put forth toward trading.
You need to be honest with yourself and take into account daily-to-day expenses. You never want to trade cryptocurrencies with money that you need to survive. Check-to-check trading will have you stressed out and edgy as the market can sway at any second. A better option is to stick with a self-appreciating asset like META 1 Coin.
Pattern recognition
Pattern recognition is a trait that was inherited from human ancestors. The ability to recognize patterns can be one of the greatest skills you can possess as a trader. There have been volumes of material and all types of trading tool indicators dedicated to this purpose. You want to be able to recognize certain market movements to predict what follows them.
Studies have shown that traders are more successful when they master indicators and charting tools. However, there is no 100% way they predict how the market will move and anyone that claims to have this capability is lying to you. The best traders will leverage indicators to seek out patterns and use them as guidance.
You can spend some time learning different market patterns such as candle stick patterns. These methods have proven to be effective and can help to improve trading across all markets. Of course, cryptos are their own asset that is going to react a little differently than other options depending on the market conditions.
Skepticism
Skepticism is often thought of as a negative trait but when referring to trading crypto, it can be a great advantage. You don’t want to be naive and think that everyone in the market has your best interest in mind. It’s better to be reserved and protect your holding until you have faith in the subject.
Skeptic traders aren’t going to get swept up in media hype or promises of wealth. They are looking for measured approaches to generating wealth. Their methodical approach is like that of that found in the children’s tale “The Tortuous and the Hair.” In the end, they win the race because they weren’t swayed off-course or ran dry. Skeptic traders are a necessary part of the market as they can help to cool down the hype.
The best traits for traders in 2023 Now that you can see what it takes to be a successful crypto trader in 2023, you are ready to hit the market. Remember, it’s always wise to have a balance of different types of assets in your portfolio. Also, its helpful to add a few safehaven assets to offset volatility and you are sure to see better results.