Some fundamental aspects of trading - Personal Opinion

about 2 years ago

Hello LeoFinance community, today I would like to share some personal opinions regarding the question:

What parameters to use to choose a cryptocurrency for trading?

This is not financial advice or anything like that, but rather to fulfill the function of information shared with people who surely have experience in this area of trading, and could add more interesting aspects.

I will start by saying that I have been trading cryptocurrencies for a little over a year now, and even though I am not an expert, I consider that I have learned some interesting things that could be useful to other people.

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There are no absolute truths in the world of trading, so anything I say that is valid today, may not be in context, with this I can say that everything is subject to change.

I start by saying that when I select a currency for trading, I usually try to make it a solid project, which allows me to feel safe, even if prices go down, because holding a currency from a solid project allows you to know that even if you only make holding of it, you can be calm in the long term.

Chart analysis is for me fundamental, as I am a technical analyst and not so much fundamental, so I look at charts, up to 6 months back to see the price movement, then I look at it in a month, a week and finish by looking at its movements in the last 7 days. I do day trading, although I am coupling a change to Swing trading, because although I enjoy it, I am looking for ways to be more away from the PC.

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In my case, I will rarely have operations of more than two coins, I do not like having to be aware of the prices of several at once, although I know it can be done, and I do not criticize those who do it, I prefer to focus my attention, my analysis on no more than two, because I feel that it could disperse the attention, and I do not like it.

Always attentive to the price of BTC, and the probabilities of it moving in a certain direction. We can not do cryptocurrency trading without seeing the main currency, this would be a big mistake, because to a large extent it is the one that determines where the whole market moves by the large volume of transactions that are made with it and above all, by the capitalization of its market.

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Using Stoploss, this point is important, because it implies always having a plan. Not only of entry but of exit in a trade, additional you don't say that we have in mind, for example, the amount we are willing to lose from our total capital. Because to a large extent Stoploss is about that.

But there is a detail here, if you have faith in the project, and you don't mind holding on to those coins for however long, in case it goes down, you sure wouldn't need to use stoploss. This is something that leads to the following.

We can not put 100% of the capital in a single operation, because in the event of a fall, and not using stoploss, you would be in the position of not having more capital to continue, unless you sell at a loss, and I do not think that is logical, or is it?

These are some aspects that I particularly consider when trading a currency pair, but there may be more things to consider, depending on the experience of each of us, and your plan, your psychology and what you are looking for.