An Ultimate guide on Checklist Before Entering Any Crypto Trade

Posted by bitdeal on August 3rd, 2022

The following four-step checklist is an example of what you can do to determine whether the setups you’ve identified offer good profit potential for the risk you’re willing to take.
Step 1: Identify Trade Setup
You should understand the conditions needed for a favorable outcome before entering a trade based on your trading preferences.
Whether you prefer to trade candlestick patterns, chart patterns, trendlines, or even technical indicators doesn't matter. What matters is that you have a technical reason why you want to enter a trade – and that technical reason is the trade setup you have identified.
Step 2: Assess Trade Triggers
After identifying a proper trade setup, you need a trigger that indicates it’s the right time to open a long or short position on a given cryptocurrency.
Some traders prefer to enter a trade upon the break of resistance, while others like to wait for a pullback into support. These events can be considered triggers that separate high-probability trading opportunities from the usual price fluctuations in the cryptocurrency market.
Step 3: Determine Position Size
Regardless of your portfolio's size, you still need to exercise proper risk management to avoid considerable losses.
Most traders clearly understand their account size, which helps them determine how much capital can be allocated to a particular trade. Likewise, you should decide what percentage of your available capital you’re willing to risk on a single trade.
Step 4: Set Up TP/SL
Every trade requires an exit point, so setting up take-profit and stop-loss orders is one of the most important ways to mitigate risks and keep your emotions in check.
Take-profit orders are usually placed in conjunction with stop-loss orders, so you don’t have to worry about executing a trade or second-guessing your decisions. Binance Futures lets users place TP/SL orders simultaneously to help traders insulate their decision-making from emotional influences.
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Citation : Binance

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