Characteristics of a responsible trader

By Shephard | dTruth23 | 26 Apr 2022


 

To succeed in whatever you do, you need to be responsible. Responsibility entails the obligation for the proper custody, care, and safekeeping of funds entrusted to the supervision of an individual (The English dictionary). Crypto trading is not an exception to this fact because as a responsible trader, you are to take proper care of your trading funds since it is in your custody. This also gives you authority over these funds which means you have the full rights to take every necessary action to ensure success in terms of making profits or cutting down on losses. These actions include:

 

Maintain strategy: Miyamoto Musashi said and I quote, “the way is in the strategy”. Strategy is everything, stick to your own strategy because everyone have their own trading style. People develop trading strategy based on their trading style. A daily trader may not use the same strategy as a weekly or monthly trader because their goal is not same. However, some strategies are only suitable for daily, weekly or monthly trading because these strategies are derived from indicators and price action. Some indicators are short term while others are long term so master your strategy and stick to it.

 

Keep a journal: This is where you pen down your strategies both the ones that work and the ones that don’t, and why the latter didn’t work. You basically write down your experiences here, your strengths and weaknesses in trading and how you think or plan to improve on them. Words are easily forgotten but when you write them down, it sticks so keeping a journal will help you a lot in being a responsible trader.

 

Stay informed: There’s a say, “if you are informed then you are deformed” which is absolutely true. You need to know what is going on with the news every hour of every day because crypto is very volatile and any FUD caused by the news can liquidate you especially if you are trading Futures. A statement from the government or crypto influencer can affect the market significantly. So you need to know what is going on with the news to help you make a good entry and exit.

 

Take some time off: You don’t have to be in the market always, thanks to binance team for introducing the cooling-off period which can help you stay off the market for a while. Go on a vacation and enjoy your money, give yourself a treat sometimes because all work and no play is not good for anybody.

 

Minimize risks: There are so many ways to make money in crypto but going all in with a 100x leverage level in Futures is certainly not one of them. Even in Spot or Margined trading, going all in is not allowed. Use a little percent of your trading fund, between 2-5% as the case may be so that when the market goes south you won’t lose everything. Check out the previous article I wrote on basic calculations in binance Futures, is a concise guide on risk management with Futures trading.

 

Don’t make unnecessary moves: Crypto trading is not a gamble but a probability game. Gambling involves trail and error but probability has some level of certainty. A good knowledge of fundamental and technical analysis will guide you on that. Unnecessary moves can cost you, learn before you trade. Binance academy will a good start.

 

Cut down losses: Don’t wait till liquidation, once the market move against you by 1-2% or more just exit and wait for another entry. However, you can increase (if you are going Short) or decrease (if you’re going Long) your position to maintain the market and still exit with a profit but that takes special skills. Simply put, know when you are wrong and do not be stubborn to accept it. You can set a Stop Loss to take care of this.

 

Once you employ these characteristics, you will make good progress in your trading career.

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Shephard
Shephard

My name is Desmond Nwabuobi. Am open minded and I like crypto contents.


dTruth23
dTruth23

You learn the basics, my teachings are concise and profound.

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