Elastos (ELA) current price is $3.220

$Cryptocurrency Trading: Stop Losses VS Mental Stop Losses You might have heard that some professional traders don’t use stop losses. This might be all well and true; however you must also realize that they also have multiple years of experience under their belt dealing with those stressful situations that come with having no stop loss. On the other hand, seems like everywhere you look, you also see a ton of advice from other traders telling you they you should never trade without stop losses. With all the conflicting advice, which one do you choose? As you can imagine, there’s benefits and drawbacks to both. Depending on your trading style (if you have one yet) and experience, this will vary from person to person. Personally, I tend to lean more towards using stop losses than not. I’ve found myself losing a lot more money from not implementing these handy “safety netsâ€?. Believe me; I’ve had my fair share of trades without a “safety netâ€? and none of them turned out very well. With that said, this doesn’t mean that you shouldn’t explore your own trading style and see which one works best for you. Cryptocurrency Stop Losses For those of you that are brand new to trading, I’ll quickly define a stop loss for you. Stop losses are orders that a trader places at a specific price which automatically executes a buy or sell at a certain price point. If you’re “long on a tradeâ€?, you would utilize a sell stop loss at a level below your buy-in price. This is what the majority of us will be using when we trade. If you’re shorting a trade (margin trading) then you would set your stop loss as a sell order above your buy-in price. One of the main purposes of setting a stop loss is to allow yourself to remove all emotions from your trading decisions. It also serves a secondary purpose of not having to worry about constantly watching over your position like a hungry jackal. Setting a stop loss will allow you to actually enjoy your life and walk away from the charts without your trade completely tanking. In order to thoroughly make a decision on whether to use a stop loss or not, you should seriously consider the advantages and disadvantages of using them. If you decide against using a stop loss, I highly recommend you test this strategy out on a demo account or with a very small amount of currency. What are the Advantages of Using a Stop Loss? In many cases, traders don’t want to close a trade because they somehow think that the market will eventually reverse in their favor . The problem with this train of thought is, markets don’t typically move towards an individual traders favor, no matter how powerful you think your Jedi mind tricks are. On the other hand, stop losses allow you to just “set it and forget itâ€?. This gives you the freedom to walk away from your charts, have a life, work on other business matters, enjoy a hobby, exercise…. you get the point. Without using stop losses, you’re essentially staring at charts all day or setting alerts which will still have you glued to your smartphone until your trade ends. Another more apparent benefit to using stop losses is the fact that it eliminates “trading disciplineâ€? which you might have not cultivated yet, no matter how mentally tough you think you are. It can take the willpower and mental fortitude of a triathlete in order to cut a loss once your trade has gone completely sour. Keep in mind; you need to be confident in your trading strategy in order to stick to your original plan. Setting stop losses and take profits will help you stick to your original game plan as intended. Overview of Stop Losses: - Grants you freedom from watching charts all day or staying glued to your smartphone. - Strips you of the mind games that you’ll be putting yourself through with mental stop losses. - Much more practical to use for traders who have less than a few years of experience trading. - Overall….less stressful. Using Mental Stop Losses A mental stop loss is referred to as a stop loss that you “rememberâ€? to set before the trade opens, but is not manually set on your cryptocurrency exchange. This type of stop loss only abides by the rules you set for it during the trade. Mental stop losses will really test your “trading disciplineâ€?. When those dips get deeper, that panic button starts to look more and more enticing. I can guarantee you one thing. However strong you think you are before you place your trade, will be dwindled down to a small fraction mental strength once that dip accumulates “panic statusâ€?. PRO TIP: What I’ve typically found is, once a major dip has occurred, a quick rebound in price will follow. The real question to this scenario is, will this rally lead you back into those delicious profits, take you to a breakeven point, or merely soften the original loss with a smaller one? My advice to you is, take a look at the charts history and see what happened with previous dips. Which of the three options mentioned above did the previous dips most often follow? Also set trailing stop losses as candles move upwards. I’ll typically move my stop loss right beneath the previous candle in case of a sharp reversal. Analyzing Your Charts & Order Books Cryptocurrency trading is an extremely volatile market. It’s been known to trigger stop losses on more than a few occasions. A short-term fluctuation could easily trigger a premature stop loss. This is why I highly recommend you set stop losses on a “per chart basisâ€?. Each chart has their own story to read as well as a range of fluctuations that you need to analyze. Some charts tend to fluctuate 2 to 3%, others will fluctuate 10 to 15%. Always take a look at your charts history (several days if you’re scalping) to see what sort of fluctuations the candlesticks on that particular chart reveal. Does it more often than not, dip 10% and then rally for more prominent gains right after? Does it consolidate for several hours before it increases in price action? You can answer all these questions and more by analyzing the charts history Analyzing the Order Book for Guidance Another item you want to check before setting a stop loss is the order book. Order books show a list of orders from any given exchange which records the interest of buyers and sellers in the market at any particular time. By analyzing the buy and sell walls of your chosen cryptocurrency’s order book, you can get a good indication as to where to place your stop loss. Make sure you place your stop loss a few percentage points or satoshis behind a high buy wall, when trading a long position. This strategy, paired with historical chart data, as well as looking for a strong support to place the stop loss under, will allow you to formulate a more sustainable stop loss location. If you implement these crucial variables into your crypto stop loss strategy, you’ll have a much lower chance of triggering a stop loss at the wrong time. There are going to be occasions where stop losses are triggered, no matter how strategic you are. Just remember, there’s no such thing as a perfect strategy. All you can hope to do with any trading strategy is , minimize your losses and maximize your gains. However, I promise you one thing, you’ll win a lot more of your trades than not if you stick to this very simple, yet effective strategy. Overview of Mental Stop Losses - Great way to eliminate triggering premature stop losses before a major rally. - If a charts history and order book are not followed, manual stop losses can potentially have you taking many losses on your trades. - If you decide to utilize mental stop losses, practice with a demo account or smaller amounts of currency first. Conclusion Realize that each chart has its own story to tell. Some may fluctuate wildly while others maintain a more consistent and stable support. Although mental stop losses have their time and place, I highly advise anyone who has less than a few years of consistent trading experience to stay far away from them. Look at it like this… Your time is more valuable than the money you trade. If a dip continues deep into a bear market, you’ll only have two choices from there. Take a greater loss than you had originally intended or be left holding bags until that particular coin reverses and potentially reaches your buy zone again. Waiting for your coin to recover can cost you a lot of time. While holding those heavy bags, you’ll end up losing a lot of time you could be utilizing on winning trades if you just had a stop loss in place. Don’t trade your time for money. Get in, get out, and move onto another trade. Good luck and happy trading!$

Elastos (ELA) current price is $3.220

10 Elastos (ELA)
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32.20USD

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Elastos (ELA) current price is $3.220

10 Elastos (ELA)=32.20USD

More Info About Coin

Twitter News Feed

Related Posts:

Subscribe to Our Social Media Daily Crypto MemesFollow, Like, and Share Our Memes With The World

Pin It on Pinterest

10 Elastos (ELA)
=
32.20USD

Subscribe to Our Social Media Daily Crypto Memes
Follow, Like, and Share Our Memes With The World