Paper trading crypto, when you are first starting in the world of cryptocurrencies, it can be difficult to know where to begin. Should you buy Bitcoin? Ethereum? Litecoin? How do you even start trading? One way to learn about the market is through paper trading. This means that you trade cryptocurrencies without using real money. You can use a demo account or a virtual currency like Bitcoin or Ethereum. This allows you to learn how the market works and make mistakes without losing any money. In this blog post, we will discuss how to paper trade cryptocurrencies and why it is a valuable learning tool!

The benefits of paper trading

When you paper trade, you are essentially tracking the market on paper. This means that your emotions are not involved in the trade. It is very different from having your hard earned money on the line.

You can learn about the market and how it works without the added stress of risking real money. Paper trading also allows you to test out different strategies and see what works for you. It’s best if you pick 1 strategy and test that strategy only, if it works, great. If not you can change it.

For example, you can learn how to interpret charts properly and find support and resistance. You can also learn about trend lines, moving averages, and candlesticks. Volume is also an important aspect of trading that you can learn about through paper trading. Check out this chart below

There is more to trading than just charts

One of the benefits of paper trading is that it teaches you discipline. When you are first starting, it is easy to get caught up in the excitement of the game. However, when you are paper trading, you must have a solid set of rules that you will not change during that test lot, of say 100 examples.

This discipline will help you when you start trading with real money. In the practice phase, you will learn how to handle a loss and a win and what you should do in each situation.

So many people that don’t paper trade don’t handle a loss very well, or a win. Check out this example, less than 1 year later it was less than the entry price of $4,922 after a huge gain of 176%.

Without paper trading how would anyone know when to lock in that 176% gain or get out well before the 4000 low?

8 rules to stick by during the testing phase

When you are paper trading, it is important to have a set of rules that you will not break. This will help you learn discipline and stick to your strategy. Changing strategy during any test lot means if did not get a chance to prove if the rules worked. When you decide on your rules, the rules should be tested 100 times. Every strategy I have developed had a string of losses and its string of wins, you will need to test 100 trades to get a real answer to find out if the rules worked consistently or not.

Here are 8 rules to stick by when paper trading: Feel free to add some or change some before you start but don’t change during the 100 test.

If you want my 5 rules on my first and most profitable entry, check out the list here

Here are 8 rules

  1. Have a set of entry rules that you will not change during the paper trading test, say 100 entries. Also, develop a set of exit rules that you will not change during the paper trading test.
  2. don’t over trade this means don’t put all your money into one trade or don’t trade too frequently. Divide your account by 10 equal lots. So, if you have $1000 then each lot would be worth $100
  3. keep a trade journal and track your progress. This will help you see what is working and what is not.
  4. Be patient and wait for the perfect setup. This can be difficult, but it is important to stick to your rules, patience is key.
  5. have a win-loss ratio of at least 50%. This means that for every two trades, you should have one winner and one loser. The idea here is that you let your winners run and add to them, cut the losers as soon as you decide it’s not working. This will help you grow your account with this mindset.
  6. have a stop loss in place which means that you set a limit to how much you are willing to lose on any one trade say 1% risk.
  7. do your research properly before entering a trade make sure you have ticked off all the rules before you buy each entry. Take it seriously.
  8. have a solid plan and know what your goals are with paper trading before starting. One goal could be to stick with your plan for 100 trades.

At first, just start and finish the 100 entries to see the results.

When to move from paper trading to backtesting

Now that you know the benefits of paper trading and created some rules to stick by, you can start backtesting the market before you commit real money.

Be patient, impatient traders always give their money to the patient traders.

The key is to understand that paper trading is a learning process. You should only move to backtest when you are confident in your strategy and you have a solid plan that has given you a solid result over 100 trades or more.

Backtesting on a platform

I do all my analysis on Tradingview I have found it to be the best and most widely used. Many platforms buy the charts from Tradingview and on-sell them. Tradingview is the real deal.

Let me show you the benefits of backtesting in this short video on how to backtest using replay on Tradingview, it’s awesome.

This tool alone will speed up the learning curve to becoming a consistently profitable trader sooner.

Then I go to Bitfinex to buy and sell. In the early days, many exchanges had glitches and scams and some closed their door and shut shop.

When I found many big players like institutions traded big money on Bitfinex I thought they obviously knew much more than I did so I looked into it and soon after I joined. I have been happy since. I have other accounts with other trading platforms only so I can trade the lesser coins that don’t make the Bitfinex grade.

Paper trading should only be done when you are just learning about charts or developing your strategy, to learn chart structure and the finer details in the charts. Paper trade 100 entries and then review the results.

After you do 100 test trades you can then review your results and delete the rules that didn’t help and adopt new ones, then do the test again.

Don’t overtrade or trade to frequently, this will deplete your account quickly.

Do your research before each entry, and make sure you have all the information you need. If you are not confident it’s not the right entry, best to wait till an entry shows up that you are confident in or the market will take your money. You should get a feeling of excitement before you trade, if you feel unsure stop, don’t trade, wait for a real entry.

Set a stop loss for each paper trade, this will help you stay in the game. The goal is to lose the smallest amount possible when you are wrong. This will happen about 50% of the time at first or less, so don’t let a loss get out of control. Take your loss on the chin and move on, we all have losses.

Start small, don’t try to make a million dollars on your first paper trade. Learning takes time so be patient and have fun.

When you feel confident with your decision move in and open a position.

5 tips to help you along the way

  1. Be patient with yourself, this is a process that takes time. Many people want to be profitable traders from the get-go and it just doesn’t work like that.
  2. Start small, commit to paper trading 100 entries, then 200. Then when you are confident move to backtesting on a platform like Tradingview for replay mode.
  3. Take your time to learn, if you do it right the rewards will be awesome.
  4. Don’t forget to have fun, this is after all why we are doing it. To make money from trading so we can live better lives and enjoy ourselves more.
  5. I hope this has helped in some way. If you want to learn more you can contact me for a free strategy session to see what strategy works best for you. check out this link to talk to me directly.

What are your thoughts on paper trading? Let me know in the comments.

Bitcoin confirming the breakout today, 7/10 chance.

This is Bitcoins best strength since its peak 97 days ago.

Hey traders, looking at this chart we can see some nice green volume starting to dominate these lows. Bitcoin and cryptocurrency as a group have moved up with strength overnight. This does not mean we are in the clear blue sky ahead. It just confirmed an uptrend according to the rules in my book. We will see over the next days or weeks.

From here we can see that we didn’t get a huge burst of volume on the break out last night, but we can see that buying volume has dominated the selling volumes after the low, and the pullback after the 50ma break had declined volume indicating weakness in the sell-off.

I have been around and bought some other cryptocurrencies that were showing awesome strength such as VET, ENG, FLOW and now waiting for momentum to pick up to the upside. I have only risked 1% of my trading account on each entry with my stops below the swing slow. No trade is worth risking the farm, losses do happen, take them quickly.

Cryptocurrency Trading For All, This Is A Simple 4 Rules Approach.

Cryptocurrency Candlestick Trading

Trading shouldn’t be hard, it’s actually quite easy. As beginners, we tend to put so much pressure on ourselves to get it right. I know I did for the first 5 years. I also swapped guru’s all the time, big mistake. Best to just follow one trader till you know that system so well you don’t need that teacher anymore. I recorded a video right here that will explain the breakout and the Zcash move, also the up and coming breakouts for NEO and Monero (XMR).

Cup with handle break above the high on above average volume.

Check out the video on the breakout

Here is a quick video that may help with navigating the market. These simple rules have helped me trade the markets with predictability, most importantly to keep my money safe. Check out the video right here