Navigating the world of altcoin cryptocurrency trading requires strategic finesse and practical insights. To thrive in this unpredictable landscape, traders must understand the nuances of these lesser-known tokens.
- Embrace Strength Signals
When a cryptocurrency chart displays a bullish trend, there’s usually a solid reason behind it. Avoid disregarding bullish patterns just because the coin was cheaper earlier. While you can wait for a dip or opt for incremental buying (DCA), don’t completely ignore the positive momentum.
- Grasp Position Sizing
Tailor your position size according to the shitcoin’s market capitalization. As a guideline, follow the 100k market cap = 1 ETH principle for sizing your positions.
- Volume as an Interest Indicator
Think of volume as the attention directed towards a cookie jar. When identifying potential reversals during market declines, historical volume patterns hold significance. For new pairs, analyze the current volume and the speed at which price dips recover.
- Secure Profits
Given the rapid value fluctuations of shitcoins, it’s wise to secure profits, at least recovering your initial investment during the first 2-4x increase in value. You can sell a portion as the price climbs or when chart patterns suggest a trend change. Establish a clear profit-taking plan.
- Document Everything
Swift improvement requires meticulous record-keeping. Maintain a journal and spreadsheet to track trades. The spreadsheet organizes your trading history, while the journal captures emotions, trade rationales, and lessons learned.
- Accept Potential Losses
Initial losses are common as you start trading. Accept this reality and proceed cautiously. If a trade induces anxiety, it’s likely you’ve overcommitted in terms of size.
- Observe, Limit Trades
As a novice, avoid entering numerous trades simultaneously. Instead, prioritize observation of shitcoin price actions. This gradual approach nurtures experience and intuitive understanding.
- Embrace Missed Opportunities
Accept that you won’t catch every soaring coin. Let go of this expectation and avoid revenge trading to compensate for misses. Learning from poor past decisions is key.
- Weekends and Low Volume
On weekends, particularly Sundays, trading volume tends to decrease. Consider taking a break during these periods to account for the lower activity.
- Recognize Strengths
Don’t attempt to master all aspects of trading. Identify your strengths and concentrate on honing one effective strategy. Focus on excelling in a single approach.
- Leverage Fibonacci Retracements
Fibonacci retracements, although met with skepticism for shitcoins, provide valuable reference points for gauging retracement levels of projects.
- Essential Tools
Equip yourself with a sniper tool and a contract checker (using a fresh wallet is advised). To start, the TTF Bot serves as a reliable and free contract checker.
- Averaging Down
Although not foolproof, Dollar-Cost Averaging (DCA) enhances your odds by securing a better entry point. Over time, DCA can be instrumental in improving your overall performance.
- Withdraw Profits
When generating substantial profits, consider withdrawing a portion to enhance your quality of life. Many traders suffer losses when they continually reinvest profits into larger trades.
- Grasp Liquidity Dynamics
Factor in the liquidity of a token in relation to its market cap. Coins with higher liquidity demand more capital to influence prices. Larger liquidity also facilitates sizable trades with minimal slippage.