The rookies often complain that the crypto market is rigged. They even blame their trading system and quit trading. But to make a regular profit, you need to revise your trading strategy once in a while. Since the market is dynamic, it is super important that you keep pace with the changes of the market in a strategic way. Though you will consider it as a hassle, it is the only way by which you can keep on making a profit from this market.
To fix the problems in your trading strategy, you have to follow standard rules in the investment business. Instead of taking aggressive decisions, always take the trades after revising your trading strategy. During your revision, find the faults in your trading system, so that you don’t have to deal with many complex issues. Let’s learn some amazing steps by which we can fix the problems in the crypto trading strategy.
Fundamental and technical factors
Most crypto traders never consider the importance of fundamental analysis. If they do, they tend to ignore the technical factors. But to earn money, you have to rely on technical and fundamental factors. You may think learning about the fundamental and technical details is a tough job. But if you trade the market in the demo environment, you should be able to learn both technical and fundamental analysis. And remember, fundamental factors are the most powerful catalyst. If you ignore the high-impact news, you are going to lose most of the time. To learn about the high and medium impact news so that you can scale your trade properly.
Risk to reward ratio
Before you take the trades in cryptocurrency, you have to check the risk to reward ratio. If it is less than 1:3, there is no reason to take the trades. You may say that the minimum risk to reward ratio for the trades can be 1:2. But if you take the trades with a 1:2 risk to reward ratio, the recovery factor will be hard. That’s why it is better to maintain a 1:3+ risk to reward ratio. For that, you might have to trade in a higher time frame. While doing the market analysis in the higher time frame, check the existing trend. Trade with the favor of the trend as it is by far the most effective way to make regular profit.
Do you know about the major chart pattern? If so, you may take the trades in a standard way. Never think you know everything about this market. Learn about the major chart as it will allow you to make a big profit. While doing the chart pattern analysis, emphasize the higher time frame data. At times you might have the urge to trade the reversal chart pattern. But reversal chart pattern is designed only for skilled traders. You have to learn about the price action trading strategy.
Avoid using too many indicators
Many rookies often use too many indicators to make a big profit. But the use of too many indicators is not going to make things easier. It will make the overall trading process harder. You may use one or two indicators but if you use more than that, it will be nearly impossible to track the price movement. Learn the use of the moving average and try to make a profit in the demo environment. And make sure you set a higher period or else the moving average will become very responsive.
Indicators should be considered as a trade filter tool only. Unless you have strong technical skills, the use of indicators is not going to make you more confident. Analyze the technical data and find the potential trade signals. Nice, you do that, check the quality of the trade signals by using the trade filter.