The ultimate goal for any cryptotrader is to be a successful cryptotrader. But the road to success will be different for everyone.
However, we have compiled a list of 5 steps we think everyone will find useful toward gaining success with cryptos.
You might have heard of CPD or “Continuing Professional Development”. Careers such as lawyers, bookkeepers or accountants are required to follow their respective governing bodies rules for CPD or they risk losing their license.
Traders, however, don’t need this – but you will still benefit from it. We have taken this framework and applied it to crypto trading, let’s take a look.
Step 1: Assess
This is the step where you look at your skills and knowledge.
Ask yourself these questions: What do I know? What can I do? Which skills do I need to be a successful cryptotrader? What do I need to improve? Do I know anything about cryptocurrencies at all?
Write down three or four achievable goals. Simply writing down “I want to be a successful cryptotrader” won’t cut it.
You’ve heard about SMART goals before, this is where to use them!
Quick recap in case you don’t remember what a SMART goal is: Specific, Measurable, Achievable, Realistic and Time-bound. An example:
“My goal is to be able to identify trends on a crypto chart by 31st of July.” This goal is a smart goal because it is specific (identifying trends on a cryptochart), measurable (you can either identify them or you can’t), achievable (identifying trends is fairly simple to do), realistic (you can learn how to identify trends in a month), and time-bound (by the 31st of July).
“My goal is to be a successful cryptotrader”. This is not a SMART goal.
It is not specific, it is not measurable, and it is not time-bound. While it does qualify as a goal, this is more of a goal to guide you to where you want to be.
You could argue that you can measure success, but people will have a different definition of success. Therefore, we would argue that simply stating “I want to be successful” is not a measurable goal.
Step 2: Plan
Once you’ve assessed your situation, it’s time to start planning!
For you to take advantage of the awesome opportunities that crypto trading has to offer, you will need a plan. A plan will give you a structure.
And when something is as new and volatile as crypto trading, having a structure is essential. Not only will you need a plan for your CPD, you’re also going to want a trading plan. We’ll talk about that in the next section!
Ask yourself the following questions: When do I want to reach my goals? How am I going to reach my goal?
Do research on educators, tools, books or mentors that will help you in reaching your goals.
Good news is, you won’t have to look very far. Here on cryptos4noobs.com you will be able to find lots of information about cryptocurrencies, as well as trading cryptocurrencies!
Look into cryptobrokers and find one that suits you. We show you how you can find one here. Start building your trading capital.
Find a few different, reliable news sources for cryptocurrencies.
Step 3: Action
What’s the point of planning if you’re not actually going to go through with it? Read the books, sign up to the cryptobroker, enroll on that course, fill in your trading plan and your trading journal, read the news.
We’ve made it easier on you by creating a trading plan for you. All you have to do is fill it in – you can find it here. Make sure to watch the video that goes along with it!
Demo trading is free, so take advantage of this! Demo trading will give you the opportunity to test your strategy.
You could be spending 5 hours a day learning and reading, but if you do not put all of this knowledge into practise, it’s basically pointless.
If you don’t use a demo account, you will be risking your capital that you’ve built up during the previous step. This whole process is to set you up for success, not failure.
So sign up for that demo account! Practice, experiment, find what feels good for you. Without risking your capital!
If you are already a successful cryptorader, a demo-account is perfect to go crazy with some new ideas, maybe try some riskier stuff than what you are used to!
In this step, you also need to set a time-limit for when you want to evaluate/analyse how well you have been doing.
Step 4: Analysis
In the planning step you will have set a timeframe for when you want to reach your goal. When this time has passed, it’s time to evaluate your progress.
How is your demotrading going? If you are not profitable, go to your trading journal and analyse why.
It can be helpful to get a second opinion. Find a mentor or a teacher who can look over your plan and your journal and give you feedback. Another benefit of having a mentor or a teacher is that they can give you feedback on things aside from your trading journal.
They’ll be able to tell you things about yourself that you might not have noticed. Maybe you think your money management is great, but your teacher will be able to tell you that it needs some work. All successful people have people around them that they can go to for help.
It’s very important in this stage to look at both the good and the bad. If you only look at the bad, you might feel a bit discouraged. If you only look at the good, you will be missing out on a lot of valuable insights!
Step 5: Repeat all the previous steps
Yes, you read that right. You have to do this all over again! Here’s why.
You might be ready to start live trading. In the planning stage you should have started building your trading capital as well as finding your broker. Technically speaking, everything should be ready for you to go.
However, to be a successful cryptotrader you are going to have to constantly assess yourself, your skills, your knowledge and the cryptocurrency market itself. The crypto market is in a constant state of change, and new regulations can come into effect every day.
If you only go through these steps once, you might not find out about the new regulations. You might not realise that you are actually not profitable. How can you be a successful cryptotrader if you’re not profitable?
That is why these 5 steps will be a never ending cycle. The more experience you have with crypto trading, the less time you will be spending on each of these steps.
There’s only so many things you need to know about cryptos to be able to trade them, and you’re only going to need to find a cryptobroker once or twice. (Although keeping an eye out for a better cryptobroker is always a good thing).
This repeating cycle will become part of your trading routine, so eventually you won’t even notice you’re doing it anymore!