16 Trading Rules for the Crypto Day Trader

Have you ever been long a prominent crypto position and see it go away?

It was merely a slight decline — nothing to be concerned about.

Then you went to your account.

Those few droplets turned into a torrent of cash, carving a massive canyon through your bank account.

Or maybe you have done your study and have a trading strategy in mind. However, you let someone talk you out of it to see it skyrocket.

Every swing trader and day trader will get scars. And you’ll end up paying a lot of money for tuition. Trading laws and concepts are built on those scars and education.

Trading guidelines give direction during downturns and profitable times. They assist you in dealing with circumstances that you will encounter again.

You may be just getting started and haven’t established any ground rules yet.

It’s possible you don’t have enough scars or haven’t paid enough tuition.

So, if you’re searching for some crypto day trading or swing trading guidelines, have a look at these:

1) Make A Strategy for Trading Crypto

According to Mike Tyson, everyone has a strategy until they are smacked in the face. There is, however, a more straightforward method to be hit in the face.

Begin aggressively trading Crypto or Ether with no strategy in mind.

Trading strategy and outcomes are critical information, and they assist you determine what you did effectively and what you did poorly. These numbers will show you when you were fortunate and not. Or it might be a disaster.

It will also assist you in honing your Crypto trading judgments over time.

Different sorts of traders have various strategies.

You should know which trends to look for as a crypto day trader. It would be best if you were specific about how you intend to use them. Having a strategy that outlines what you’ll do helps you avoid making errors and makes you more resilient in high-stakes trading scenarios.

When you’re unclear or confused, go to your trading strategy. In all market situations, it’s your sensible self.

2) Make Your Own Decisions

Every trader has a tale of someone convincing them to abandon a plan. The article then describes how the concept took off and left them behind.

Of course, blaming the other person is a handy way to avoid taking responsibility.

The victim card is seen through the eyes of a trader.

The fact is that they failed to do their assignment. They were unable to devise a trading strategy, and they lacked conviction since they didn’t accomplish those two things.

Don’t be so easily talked out of your concept by some jerk on social media. And forget about day trading based on the latest news, and that’s a game for mugs.

Develop your mental process and think independently. Make your analysis, devise a strategy, then put it into action.

That’s how you build confidence and improve as a trader.

3) Take Control of Your Cryptocurrency Trading Outcomes

Owning your outcomes is closely tied to thinking for yourself.

The successes can’t be genius if the losses are due to fraudsters.

Traders who use this language to discuss their outcomes have a problem.

All of the outcomes are data. However, you can only benefit from this knowledge if you are prepared to own it. Good traders take responsibility for their actions, whether good or harmful.

The truth is known to your account, and your profits and losses are solely your responsibility.

4) Stay Away From Crypto Trading Advice

Have you ever had a “trader” instruct how, when, and what to trade? He claims to have built a stack, which gives him the right to “assist” you.

It occurs often.

There is always someone out there with a hot tip.

Buy this.

That’ll sell.

It’s on its way!

Don’t be left out!

When you take advice from others, you trust their judgment and reasoning. And the direction might be made without any review or thought. However, there is virtually always an ulterior motive, and every piece of free outside trade advice has a hidden agenda.

Why would someone share something so precious, for example?

How long are they?

Or are they discreetly presenting their case while urging you to purchase it?

Is it necessary for you to be their safety net? Hold their hand by being in it as well.

Are they looking for fame?

What do they want to get in return?

Or do they have access to information they shouldn’t have? Are they endangering you by sharing it with you?

And how do you know what to do next if you’re following their logic? Because they won’t be able to help you if anything goes wrong, and they won’t share your losses.

Traders that are in control of their outcomes do not accept tips.

5) Never Use Crypto to Pay for Anything

You can make objective, sensible conclusions when a deal follows a set method.

Objectivity is lost when you decide to exchange to pay for something. It is no longer a method. You’re too preoccupied with something else. It is making an impression. Now it’s all about ego.

It’s worse than that: it’s a state of dependency.

To get a new automobile, you’ll need to put your trade skills to use. You need a few more points for that boat, mansion, or luxury trip.

The market is now wholly emotional.

In every choice, neediness is an emotional excess that destroys outcomes.

Day trading Crypto to pay for items is one of the quickest ways to lose money.

6) Adjust Your Trade in the Case of A Personal Tragedy

You and I are emotional creatures, and occasionally life happens outside the market. And such circumstances might be upsetting at times.

You may be affected by the loss of a loved one.

Alternatively, have a breakup.

You may have a new baby at home, and your sleep is drastically reduced. Other stresses might be an injury, a vehicle accident, or anything else.

Scale down your trading if you’re in a highly heated emotional circumstance. Lessen your size or temporarily reduce your activities. Keep an eye on your trade notebook to check whether you’re still on track. Adjust activities to normal levels when the problem passes.

7) Crypto FOMO is an Absolute No-No

There is a genuine fear of missing out. But there’s a bigger problem. It has a great concept but fails to put it into action, only to see it take off as planned.

If something is moving, don’t pursue it. Stick to your approach and plan.

Crypto will be available the next day.

Return to the fundamentals. What does your investigation reveal? What’s the next logical step?

After that, make a choice.

The top must be purchased, and the bottom must be sold. That someone, though, does not have to be you.

8) Offer a Sacrifice to the Gods of Commerce

Trading may be difficult at times. You get the impression that the market is slapping you about, and you’re in the mixer when it occurs.

When you’re anxious about your job and don’t know what to do, you’ll feel like the mixer.

Indecision might indicate that you are unsure about market circumstances, a position, or are emotionally overwhelmed. Small deals are the way to get out of it.

Missed a significant Crypto upward move but didn’t want to purchase at the top?

To lessen the strain, buy a tiny quantity.

You are tempted to sell a losing investment because your stop-loss hasn’t been touched?

Sell a little piece as a sacrifice to the trade gods. Taking action with a short sale can clear your thoughts and return you to sensible thinking.

Small activities meant to decrease mental tension and restore internal order are the path out of the mixer.

9) A Day Transaction Should Never Be Considered an “Investment.”

Let’s imagine you’ve decided today to trade Crypto or Ether. Then, out of nowhere, the position does something unexpected. What exactly do you do?

Stick to your strategy and sell when your stop loss is reached?

Do you sell and review if you don’t have a plan?

Alternatively, do you keep it and refer to it as an “investment”?

Because you didn’t stick to your strategy, a transaction should never develop into an investment. Or, much worse, I didn’t have one, to begin with.

It doesn’t make it less than a loss if you don’t “book the loss.”

You create internal turmoil when a transaction “becomes” an investment. You’re well aware that you made a mistake, and you’re well aware that it’s a setback. As a result, you’ve become emotionally engaged in the position.

A deal that turns into an “investment” is a loss.

How can you tell whether your business is turning into an investment?

The desire to justify retaining it is the first clue. You’re displaying neediness if you’re desperately hunting for ways to “prove” you’re correct about a bad deal.

By studying before the transaction, you may avoid the urge to be “correct” and instead concentrate on your method.

10) Never Put More Money into a Lost Crypto Deal

You may now multiply the error if you have a deal turned into an “investment.” By contributing to your losing position, your situation might quickly deteriorate.

You might recast it as “dollar-cost averaging.” After all, if you loved it at x, you’ll enjoy it much more at a lower price. Right?


If it’s part of your entry plan, dollar-cost averaging is good. It’s not ideal if your stop loss was slashed, and you’re now “averaging down” since you didn’t sell.

Individual traders’ losses are typically compounded when they add to a loser, and it adds to the tension by adding an unneeded emotional load.

Adding to the load is not the answer to a losing transaction.

11) Let Crypto Handle the Highs and Lows

Coates examines traders’ psychology and emotional behavior under complex settings in his book The Hour Before Dog and Wolf.

You make money when the market is bullish and robust. Your confidence grows significantly as you earn more money. Position sizes enlarge as confidence grows and research becomes less structured, and your risk management becomes poor.

Your confidence is most when your emotional condition is high, when you’re at your most vulnerable.

On the other hand, losses result in a fall in activity and size. Depression is a possibility. And these bad habits may get out of hand. When you need to be courageous, you won’t simply cut down; you’ll quit completely.

Never are things so nice or awful.

To control your perception of the market’s ups and downs, use a method like your trading strategy. It will prevent you from being emotionally drained by linking your emotions to every deal.

It will also assist you in profiting by responding intelligently in contrast to others’ emotional excesses.

12) Don’t Choose Between Tops and Bottoms

Do you know anybody who has successfully traded Crypto at the peak or bottom of a trend? I completed the transaction, not simply speaking about it.

A need is created by selecting tops and bottoms and announcing them publicly. This requires consistency, and your performance will suffer as a consequence.

You will place yourself in a situation where you must be consistent if you make the call. And it means deferring your choice till your big call or risk being chastised on social media by your “friends.” Several crypto day traders have discussed this predicament and its negative effects.

Don’t be fooled by the desire to be correct about crypto market peaks and bottoms. Trying to purchase and sell bottoms and tops is a highly costly hobby.

Instead, stick to your strategy and consume meat discreetly while on the road.

13) Sell When You Have the Opportunity, Not When You Are Forced to

You may easily add and transfer big holdings in liquid marketplaces. Spreads are tight, and slippage is minimal when times are good. In these circumstances, assets like Crypto will float like water.

However, when disaster strikes, spreads increase, liquidity evaporates, and even tiny bets may become dangerous to sell. Even the most humble positions might suffer huge cutbacks if you are compelled to sell. This is particularly true when considering a substantial investment in an illiquid asset. You know, like that dreadful trinket you were given.

Consider how much the liquidity issue might be amplified in difficult situations while trading Crypto with leverage.

March 12, 2020, is an excellent illustration of bad circumstances, leverage, and what occurs when individuals sell because they have no choice. Long Term Capital Management in 1998 and the Great Financial Crisis in 2008 are both excellent instances.

In the context of shifting market circumstances, the size of your position is a crucial issue. Always.

14) Cryptocurrency Day Trading Success Tales

People like bragging about their accomplishments, and this can be contagious. It might also be risky to try to imitate.

You often compare yourself to tales that are only half real (or completely false). The real truth behind these events and assertions by numerous anonymous avatars is seldom revealed.

Keeping up with other cryptocurrency traders may be exhausting emotionally. Furthermore, these false tales will obstruct your long-term growth. It would help if you did the exact opposite. Toss your competition off by whining excessively about your defeats.

Ignore the tales and concentrate on your own game and strategy.

15) Don’t Spend More Than Your Resources on a Single Deal

The quantity of resources you utilize depends on the deal.

A systems trader may pick a resource allocation based on likelihood, with the greater the probability, the larger the allocation. Crypto day traders may set a predetermined dollar amount or number of Satoshis for every transaction. Swing traders may use a fixed proportion of assets.

That percentage might be rather high if you’re just getting started and have a tiny account (but it just plays money). Or even 100%.

Your risk tolerance will influence the amount you pick, and it will also depend on how you intend to handle such risks.

You do not need to use a specific trade amount or %. Just remember that if you lose all of your coins, you won’t be able to play the next day.

16) Minor Adjustments Improve Trading Outcomes

Your trading strategy will undoubtedly include times of underperformance, and there might be several causes for this. However, if the strategy has worked in the past, you may need a few minor tweaks to get back on track.

Making drastic adjustments to your trading strategy or starting from scratch may cause mental and emotional turmoil. And the more the adjustments, the less likely you are to figure out the issue.

Keep your trade iterations short and simple, and complete them one at a time. This will help you deal with emotional issues and get through tough times.

Make Your Own Trading Rules by Borrowing These

Trading rules are derived from market experience and consist of concepts and principles. Having basic trading guidelines is beneficial whether you are a Crypto day trader, an Ether swing trader, or a crypto dabbler.

The more time you spend trading crypto assets, the more you’ll see spots where different regulations apply.

They become shorthand for circumstances that you will encounter frequently.

Remember that any rule or concept you choose should be clear and applicable to your actions. In addition, it should keep you out of trouble.

Leave a Comment