If you work in the crypto market or are considering starting a career in this area, you’ve probably heard that crypto trading is a practice that comes with a whole lot of risk. But does this activity really harm those involved? It’s common for beginners to seek tips and expert opinions on the best segment to start investing in - whether it is the most affordable, safest or offers the most return. However, some recommendations can be quite negative for those just starting out.

With so many controversial opinions and room for error, it can be difficult for beginners to distinguish what this practice is really about, and how it can be conducted safely. With that in mind, this article lays out the top factors to keep in mind in crypto trading to trade crypto responsibly.

Learn How the Crypto Market Works

First things first, it is impossible to start a new financial activity, especially as care-needed as crypto trading, without understanding how the market works. And this does not only apply to practices that involve the daily purchase and sale of crypto, but the entire mechanism that involves cryptocurrencies and how they function. After all, the trader will need a great deal of knowledge to be able to correctly interpret the signals of the exchange and how it operates, as well as understand when to act and when to wait. Not to mention news itself; project updates, rollouts, policies and more.

For this reason, when deciding to become a responsible crypto trader, the first step is to understand how the most volatile financial market in the world works, and what its characteristics are. Even more conservative investors, who are starting to invest regardless of trading, should look for more information about the area.

One of the best sources of information can be found on the Gate Learn section. You can find content from beginner to advanced levels about the main topics in crypto - we got it all covered for you. We have also separated other main information sources:

• Gate Learn;
• Coindesk: one of the main crypto news sources, with real-time market information;
• Cointelegraph: crypto news and analysis website on the latest developments in crypto;
• The Block Crypto: provides not only news, but on-chain data and reports related to the sector.

Study Technical Analysis

This one is a no-brainer; if you’re interested in crypto trading and want to execute it responsibly, then you must learn how to trade. After understanding the workings of the market as a whole, the next step is to understand how to perform practical technical analysis. Traders who are not educated in the field tend to make bad decisions far more frequently than educated ones, because they don’t have a proper read on the market.

Trading crypto successfully already demands, in itself, great professional knowledge, as it is an investment with greater risk and dynamism. The market is constantly moving, and small changes can make or break stocks in a matter of minutes. For this reason, it is important that the trader knows how to interpret these points during their analysis, so that the activity is profitable.

For example, identifying the cryptos with the highest chances of volatility throughout the day, understanding which chart points are important or even knowing which events will influence the market in that period. Without this technical vision, it becomes even more difficult to work with trading, which can lead to a negative opinion about the practice, such as thinking that day trading is boring.

Practice, Practice, Practice

One of the biggest flaws of novice investors who think crypto trading is a “start-and-go” endeavor is believing that their equity will multiply overnight. However, one of the main points of this field is that it needs tons, tons and tons of practice. This means that for the investor to become a successful crypto trader, it is necessary to train a lot on a day-to-day basis.

Only by performing several operations for a long time will it be possible to understand, in practice, how the market acts and how you should react to it. It also adds knowledge to the trader, who will identify the variables needed to get their forecasts and investments right.

It is one thing to memorize patterns, trading tools like Bollinger bands, market flows and volume correlations; it is a whole different deal to see it in practice, over and over. Do not be eager to jump on right away with your investments, and train your mind until your simulated results are profitable.

Avoid Crypto Influencers

Crypto is the fastest growing market in the history of finance, by an enormous gap from previous contenders. For that reason, it is truly a land of opportunity for high profits - which inevitably comes with many participants looking to take advantage of others. The most common ones are social media crypto influencers, selling beginners the idea that trading is easy and that they have found several “gems” in crypto that will definitely make you wealthy if you stick with their recommendations.

Does that mean crypto influencers are inherently bad? No, not at all, in fact there are many great ones. But in most cases they either:

a) Make money mostly with their social media channels, not trading;

b) Are sponsored by the projects they recommend;

c) Got lucky and do not really have much experience in the field to provide support for others.

Or maybe all the previous options.

It is exciting to think of making quick profits and finding up-and-coming crypto that may “go to the moon” in a few weeks or months. However, as a responsible crypto trader, you must know this absolute fact about finance - money does not come easy. If it looks easy, then you just have not practiced enough before to properly understand it.

Start With a Simple Strategy, and Follow It No Matter What

Crypto trading may appeal to you, but if you are still a beginner in this field, it is always better to start with simple trading strategies. Crypto swing trading and position trading, for example, allow the trade of crypto in the short and medium term, following some of the parameters of the riskier options like day trading, but with a longer time frame. Thus, for investors who are starting to venture into trading, they can be advantageous options, in addition to not committing as much capital and not presenting as many high risks.

Your mental integrity to the strategy is also one of the main factors responsible for considerable losses for novice investors, and considerable gains in the long run. Losing money is something that heavily affects people’s emotions - more than most things in life, really. Thus, many new crypto traders end up leaving the strategy behind when things are not going their way - moving from the “trader” staple to “supporters” of a project until it recovers. Thinking of yourself as maintaining a strategy is easy, but it is a different game when reality hits and you have to abandon a position. Yet, it is the right thing to do if it means following an organized path - which leads to the final step.

Crypto Trading Success Comes Only With Discipline

Crypto trading falls victim to when not to act, when to abandon a position despite your gut feeling or when to execute one. There is no room for emotions and rapid dec professional practices have, in that it is extremely easy to start but difficult to master. For trading responsibly, the biggest challenge new investors face is discipline. Discipline to know when to act, visions in crypto trading; only logic and patterns. However, the path to responsible crypto trading is an exciting one when investors are willing to take the time to learn and practice. Educate yourself, practice a lot, avoid daydreaming with market distractions, start simple and keep going - it is the only way forward.