One major problem that many new crypto traders have who are struggling to achieve profitability is that they are constantly searching for the holy grail of crypto trading strategies, thinking that it will change their lives without doing much work.
You may now wonder how to achieve profitability when your current crypto trading delivers negative results. The key to understanding this is to start thinking about your process and how to optimize it rather than the strategy itself. With the help of Fat Pig Signals Crypto Signals, you can boost your performance tremendously. Since it's mostly not just about trading, but also about leaving emotions out, giving away responsibility "a little bit," and there are more ways to profit in the crypto market.
Instead of looking for a winning strategy, you need to figure out how to turn your current plan into a winning strategy. This is often one of the main differences between amateurs and professional traders.
Your Trading Journal is the Key
Do you record all your trades in a proper journal where you meticulously record everything relevant to the trade? That's the number one requirement. Without a trading journal, you are simply helpless when analyzing your trades.
The essential requirements for a good trading journal include:
- Entry price, stop loss and take profit levels.
- The strategy used and triggers for entering the trade
- Confluence factors
- Describe your thoughts and emotional state when you entered the trade
- Is there anything you don't like about the trade?
- Position size and risk management
- A snapshot of the chart
If you keep a trading diary with all this information, you can quickly go back and find out what worked for you and what needs to be changed. Remember that a profitable trading strategy is not "found" but built step by step. For example, Fat Pig Signals has been rebuilding its trading strategy for over five years now and always manages to top their performance using the "Yellow Ball"!
Remember that you should usually record at least 50-100 live trades in your diary to get a statistically valid answer on whether your current trading system is working or not.
With this in mind, it becomes clear that there is no way to build or improve a trading strategy if you keep changing it. The reason is simply that you don't have enough trades to determine whether or not the strategy is profitable in the long run, nor do you have enough data to know what needs to be changed to make it worthwhile.
Don't Change the Strategy if You are Losing Money
You must be aware that markets are constantly changing for your long-term trading success. There will be periods when your strategy works exceptionally well, followed by periods of poor results. This is inevitable and happens to everyone.
What is essential then is what you do during the phases when the results are not good. Know then to expect weeks/months/years (depending on your trading timeframe) of negative or break-even results at regular intervals. An excellent example of this is the Bitcoin Cycle, which has lasted circa four years each in the past, including Bull and Bear Markets.
During these periods of disappointing returns, you must stick with your system. Unfortunately, far too many traders have changed their strategy to find that it would have become profitable again shortly afterward.
However, the reality is that it is tough for people to maintain a trading strategy for extended periods, especially if it lasts for months. There is a concept called emotional capital in trading psychology, and long bear markets deplete emotional capital.
Emotional capital is just as necessary as trading capital in your account when it comes to trading. If you run out of either, you will fail as a trader. Therefore, you need to have confidence in your trading strategy, crypto signals, and the entire trading process. You need to know what to expect and know yourself well enough to assess how much and how long you can emotionally handle a downside.