I had an interview an famous crypto/forex trading expert Stanley Druckenmiller 2 months ago. He shared his experience in becoming a crypto/forex trader. He is also my mentor in crypto/forex.
Step 1: Educate Yourself
Crypto/forex is a difficult industry with a very high knowledge content. Therefore, you need to spend a lot of time to learn crypto/forex.
Basic knowledge when learning about forex/crypto trading:
- Understanding the basics of forex and crypto trading.
- Basic knowledge of each trading platform.
- Technical analysis tools such as candlestick charts, trend lines, and indicators.
- Develop a solid understanding of fundamental analysis and how economic events impact the market.
- Practice risk management techniques to protect your capital.
- Stay updated with the latest news and trends in the forex and crypto markets.
Currently there are many documents about Crypto/forex, but you can refer to basic knowledge on Youtube or courses on Udemy.
Step 2: Choose a Crypto/Forex Trading Platform
To begin trading cryptocurrencies or forex pairs, you need access to a reliable trading platform. For crypto trading, select a reputable cryptocurrency exchange that offers a wide range of digital assets and robust security measures.
Notes when choosing forex/crypto trading platform:
- Regulation: Ensure the platform is regulated by a reputable financial authority.
- Security: Know how to protect your funds and personal information.
- Choose a platform that is easy to navigate and understand.
- Trading Tools: Check if the platform offers essential tools like charts, technical indicators, and risk management features.
- Customer Support: Make sure there is reliable customer support available to address any queries or issues promptly.
- Payment Options: Consider platforms that offer multiple payment options for convenient deposits and withdrawals.
(Binance coin marketplace)
Step 3: Building a Diverse Portfolio
Stanley Druckenmiller shares the following tips for creating a Diverse Portfolio:
- Research and invest in a variety of cryptocurrencies, including major ones like Bitcoin and Ethereum, as well as promising altcoins.
- Diversify your portfolio by allocating funds to different sectors within the crypto market, such as decentralized finance (DeFi), non-fungible tokens (NFTs), and blockchain platforms.
- Consider investing in stablecoins to reduce volatility and provide stability to your portfolio.
- Stay updated with the latest news and trends in the crypto industry to identify potential investment opportunities.
- Utilize dollar-cost averaging strategy by regularly investing a fixed amount of money into your portfolio, regardless of market conditions.
- Take advantage of cryptocurrency exchanges that offer a wide range of coins for trading.
- Consider investing in cryptocurrency index funds or exchange-traded funds (ETFs) for a diversified exposure to multiple cryptocurrencies.
4. Learn Technical Analysis and Charting Tools:
Technical Analysis and Charting Tools are very important parts of crypto/forex that you must learn. Basic tools include:
- TradingView: A popular platform for technical analysis and charting, offering a wide range of indicators and drawing tools.
- Coinigy: Provides advanced charting features, real-time data, and integration with multiple cryptocurrency exchanges.
- CryptoCompare: Offers comprehensive market data, including historical prices, charts, and analysis tools.
- CoinMarketCap: While primarily a cryptocurrency market data website, it also provides basic charting functionality for traders.
- Binance: One of the largest cryptocurrency exchanges that offers its own charting tools for traders on the platform.
- Bitfinex: Provides advanced trading features along with customizable charting tools for technical analysis.
- Kraken: A reputable exchange that includes basic charting capabilities within its trading interface.
- TradingLite: A lightweight web-based platform with intuitive charting tools suitable for both beginners and experienced traders.
- Coinigy V2 Mobile App: Allows traders to access their charts and perform technical analysis on the go through their mobile devices.
5. Create an Account
Once you have selected your preferred trading platform or broker, create an account by providing the required personal information. Ensure that you fulfill any verification procedures mandated by the platform or broker to comply with regulatory requirements.
(Coinbase coin marketplace)
6. Fund Your Account
After successfully creating an account,, it’s time to fund the account. Depending on the platform or broker you have chosen, there may be different deposit methods such as bank transfer or credit/debit card.
Stanley Druckenmiller has a recommendation that any minimum deposit requirements and considerations start with an amount you can risk as you learn the rules.
7. Develop a Trading Plan
Stanley Druckenmiller advises us that building a clearly defined trading plan is essential for success in both the cryptocurrency and forex markets.
At this step Stanley Druckenmiller shares that we should determine your risk tolerance and set clear goals for each trade.
In addition, you must also consider factors such as entry/exit points based on technical analysis indicators, stop-loss orders to limit possible losses, and profit-taking strategies.
8. Start Trading
Stanley Druckenmiller recommends that you start with small trades then you can gradually increase the level of placing orders as you gain confidence and experience.
Remember that trading cryptocurrencies and forex carries inherent risks, so that Stanley Druckenmiller advises us never investing more than you can afford to lose. You need to continuously train yourself, practice disciplined risk management and seek guidance from experienced traders or financial advisors if needed.
By diligently following these steps, Stanley Druckenmiller suggests that we will be able to gradually become an experienced and successful forex/crypto trader.
9. Manage Risk
Managing risk is an essential part of successful crypto trading. This means carefully considering your risk tolerance and setting stop-loss orders to minimize losses.
Risk notes in crypto trading:
- Volatility: Crypto markets are highly volatile, with prices fluctuating rapidly.
- Lack of regulation: The crypto market is largely unregulated, leaving investors vulnerable to scams and fraud.
- Security risks: Cryptocurrency exchanges and wallets can be vulnerable to hacking and theft.
- Market manipulation: Due to the lack of regulation, crypto markets are susceptible to manipulation by large players.
- Limited liquidity: Some cryptocurrencies may have limited liquidity, making it difficult to buy or sell large amounts without impacting the price.
- Technological risks: Blockchain technology is still evolving, and there are potential vulnerabilities that could be exploited by hackers.
- Lack of transparency: Information about cryptocurrencies can be limited or misleading, making it challenging for investors to make informed decisions.
10. Monitor Your Investments
Finally, Stanley Druckenmiller advises that we must regularly monitor our crypto/forex investments and adjust our trading plans.
The crypto/forex market fluctuates daily so you need to closely monitor your investments at least 3 times a day.
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