Profitable trading for beginners step by step
Finding a good trade can be difficult for traders who are new to trading. Often people see the trades but have not paid close attention to everything in their technical analysis. Thanks to these tips you will find out how to make more profitable crypto trades. After reading this blog I hope to have given you enough knowledge to make more profitable trades and reduce loss making trades.
If you are a new trader there is also a giveaway at the bottom of the page.
When do I make losing trades?
There are many reasons why you are not making profitable trades. Not all trades you make are profitable and they can't be. You should always look over a longer term of multiple trades. By that I mean that if you make 10 trades you don't have to win everything. You can even make a profit if you only make a 30% profit. Therefore, always look over multiple trades. Make 20 trades and then see if you have lost money or not.
A good trader can also have days when they make a loss. But their loss is made up on other days. That's how trading works on all markets of cryptocurrencies, Stocks, Forex, etc.
Reasons why I make losing trades
If you make a lot of losing trades or only losing trades it can be for many reasons. It's no cause for panic. Because if you are a new crypto currency trader you make beginner mistakes. Over time, your trades will get better. The errors that come through here are almost all fixable. The biggest mistake is to solve it by just continuing to trade because you only learn from experience.
Not enough knowledge of price action
The most common mistake is because traders don't have enough knowledge. You do not have enough experience and knowledge of the price action. If your stop loss is always just hit or has come to the opposite of your analysis, these are mistakes that every novice trader makes. Everyone has dealt with this.
You probably have no idea what you're doing wrong. To solve this problem is just to persevere. You solve this by gaining experience. Over time you will notice that it becomes less and less. This makes trading more fun. It is useful to look at what you are doing wrong. If you can find this to take into account, I have confidence that you will become a profitable trader.
Your trading analysis is bad
This is an error related to the previous problem. If you don't have enough knowledge, you don't really know how the price action works and when you can expect a breakout from the range. The solution to this is the same as above. If you keep trading you will learn to recognize the markets and patterns. This also gives you knowledge of how you can improve your own analyses.
Finding a trade can also become easier. Learning to trade is a matter of time. It's only hard at first. It just takes time experience comes naturally.
You place your stop loss in a liquidation zone
If you are having trouble with your trades playing out just as planned after your stop loss has just been hit, it is because you are placing the stop loss in a liquidation zone.
This can prevent you from increasing your stop loss. It is also useful to take your take profit with you. So try to think differently from the other traders. Because where you place your stop loss, volume is used. Therefore, try to place your entry where you would otherwise place your stop loss. You will notice that it goes a lot better.
Finding a good crypto trade with the right analysis step by step
Finding a good crypto trade is not difficult if you know what to do. We recommend that you first read this article about how trading really works. We are now going to make a step-by-step analysis with the basic steps of trading.
It's not difficult and we don't make it difficult for you either. Because you don't have to make complicated drawings in the chart.
All you need is a crypto exchange and a chart program. We recommend trading view because it is free and has all the tools you need.
Afterwards you will hopefully know where and how to find the best trades for make profit.
Set support and resistance levels.
Support and resistance levels are vertical lines at spots in the chart where price encounters and then reappears multiple times. These are lines on which the traders place orders. That is why it is important to know exactly how the support and resistance levels work.
Try to put down a few lines on the spots as shown in the example below.
The blue lines: Are the support and resistance levels. As you can see, the price often comes up against it.
The green circles: Are the points where the price action is running into and there is a good chance that it will go the other way. The more often the price action runs into it. the stronger the support and resistance becomes. If you go back a long time and put the levels there you will see that they are respected later on. You base the trades on this.
Find profitable orders step by step
The next step is to spot the right profitable crypto trades. We recommend using a minimum risk reward ratio of 3.0. Every trader also makes losing trades. If you always have 3.0% Risk reward, you only need to have made 33% of your trades profitable. This means that you can lose more than win.
You can find a trade to make an analysis. You can use the drawn levels as a conformation, see example below.
Why is this trade profitable and why did I take this trade?
As you can see in the photo Below, the trade has played out very well. And after my trade closed with a profit, the price went back.
What was the conformation of this trade?
I had seen that the price action has gone out of range from where all the orange circles are. There is a huge chance that the price of the level will fall and that is why I took the trade on the old support level, which then became resistance. This is a kind of breakout trade. A breakout is a kind of trading pattern. Which means comes out of a breakout.
As you can see I used a short order. I see from my analysis that the price has been out of range. and there is a good chance it will fall even further. That is why I have now placed an order on the top level with a Risk reward of 3.08%. Now that I've posted this I'll let it run out.
How do I find the best crypto trades?
To make and find a trade you have to find an interesting point in the markets. You need a conformation for it. A conformation is the reason you want to trade. This can be for several reasons:
A trade based on a breakout
If your crypto currency trade is based on a breakout, it means that the price action moves up a price range. To take this trade, the price moves out of the range and tests the price back at the old resistance or support which has then been swapped. If you then put your trade on it, there is a good chance that your trade will be filled and your analysis will be played out according to plan. See photo of an example of a break out trade in the bitcoin.
Always wait for a few candles before the breakout trade. This way you reduce the chance that it is a fakeout trade. Make sure the entry was below the previous resistance level. Click on the image to enlarge it. The take profit can move you to the upcoming level. This is how you maximize your profit. Keep in mind that the higher you put it, the less likely you are to sell it at that point.
This trade often occurs when the price action of the cryyto coin moves to another range. There are also good profits to be made here. A disadvantage is that finding this trade is more difficult for novice traders.
The price is running at a support and resistance level (Range trading)
Trading between 2 levels is easy and common. It is also called range trading. This is also easy to do for beginners as you don't need any extensive analysis or planning. When you see this, you see that the price goes up and down in a range. You will see 2 different trades, a short trade on bitcoin and a long trade on bitcoin. Why these trades it says has these conformations:
Short trade:This trade makes a profit when the price drops. The take profit is placed on the other side of the rank because there the price goes up again. To choose the stop loss you have to take other wicks into account. Always place it above it with a little extra slack. That's all you need for this type of trade. If the price goes out of the range, you could catch it with the breakout trade.
Long trade:
Exactly the same applies to the long trade. But with this trade it is just the opposite. You choose the take profit, stop loss and entry in exactly the same way. You can enlarge the image to click on it.
Another reason based on your analysis
There are many more reasons why you should take a trade. The crypto markets are open 24/7 and the price is always moving. That means that there is always something to trade. News can also affect your trade. You may see other comformations to take a trade. You may discover a trading pattern.
Extra explanation about a safe entry, take profit and stop loss
We just explained a trade and why and how we did it step by step. If you do not yet have much knowledge of how to use all the different order types correctly, we are happy to explain the risk and as much profit as possible. with the stop loss, entry and take profit. You need all these orders for a trade and they all influence each other and the risk of your trade.
Where is the entry placed?
You must place the entry safely in a place where you expect that your entry will just be hit. That is important because otherwise it is unnecessary risk and your Risk Reward will go down. You always place your entry at a support or resistance level. Do not place your entry too close to the current price or in a place where you know for sure that it will be filled. Because then the chance becomes greater than you will make a loss-making trade.
Where is the take profit placed?
You place the take profit at a point as far as possible from your entry. Doing this will increase your risk reward ratio of your trade. The key is to place it in a place where you also expect the price to go. Therefore, look for a price point in the chart where there is a lot of resistance. That is the area where other traders have orders and for them it is therefore the goal to get the price there. So find out how much you can maximize the take profit with as little risk as possible.
Where is the stop loss placed?
Placing the stop loss where should that be with crypto trading? The lives in trading are respected. You want to place your stop loss as safe as possible. Make sure you don't place it in a liquidation zone. That is the zone where many orders are placed. If you place it behind that you will see that your stop loss is hit less often and will make more profitable trades.
Always place your stop-loss outside the current levels of the range. With every trade, see why your stop loss is or is not hit. This is how you learn from yourself. A tip from us is to keep an order diary. Read more trading tips here to make more profitable trades.
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