Are you someone who wants to begin with crypto trading but don’t know the right way or strategy for investing in the crypto tokens out there? If this is the case with you, then you have definitely come to the right place. Even the most experienced traders have difficulty managing their play against the extreme volatility presented by cryptocurrencies and their swift action within the marketplace in a matter of seconds.
It is possible that the cryptocurrency that you are eyeing or want to trade is going to behave eccentrically for a few days, thus winning your confidence in it but only when you put your money down does it start to respond in an anomalous way. It might deter all the way to the ground, and with it, your hopes and dreams of becoming a successful crypto trader.
You can’t trust any cryptocurrency for a definite amount of time, and that is something that we will tell you for free. The stocks and forex market don’t behave the same as the crypto market does because these are extremely significant markets and have been around for a considerable amount of time.
Their roots are somewhat nested deep into the financial realm, and the regulatory skies are clearer for them as compared to the crypto market that still has multiple regulatory concerns in various countries even still. But that doesn’t mean that you can’t outsmart the crypto market even if for a marginal time period because you sure can, and the following are five best ways or strategies to do so;
Make Plans Before Investing Money
If you truly want to convert your riches into a handsome profit, then make a pact with yourself that you are not going to withdraw your money before a period of two years has been completed. It is all about holding over to your position under unfavorable conditions, aligning it to nurture and grow, and only chipping away the whole thing when able conditions return.
Suppose that you have put a decent amount of money into a crypto portfolio buying multiple cryptocurrencies and have made up your mind that you won’t touch the whole thing before two years, but you are now suddenly in need of some money, so what should you do? First of all, you should be looking into other means of getting by; if you have some other kind of savings other than those that you have invested into cryptocurrency, then try to use those.
But if but all means you have to take a chunk from the original investment that you have put aside for cryptocurrency investment, then don’t sell your position completely but only a chunk of crypto that is your requirement at the time. This way, you would still have some left and invested into the crypto market; this is better than having no profit in the afterglow of events whatsoever. Apart from this, we should consider the turnings of the market into account.
There are always going to be times when dedicated crypto is doing extremely well, and after a few months, its activity has plummeted to the ground. So what you should be doing with it is the question, should you be waiting for the better times to come, or should you chip in all of it and move out while you have still got the time? According to the professionals, the best way to approach this situation is to wait it out for a period of two years because usually, if a coin has some potential, then it would showcase its true colors within a 2 year period, thus securing your investment as well as the profit that you would have been able to earn on it.
Always Calculate Dollar Cost Average
Crypto investment is a game of nerves; you have to hold on to your urges and desires and think logically while the rest of the traders simply can’t. These are a common recurrence even with the most professional traders that they have a fear of missing out or an opportunity that has presented itself for a short period of time.
Once such an opportunity arises where everyone is making a solid profit in a dedicated cryptocurrency, and you are presented with the same deal, how could you stand there and watch it happen when you could also be a part of it? The dollar cost average is a strategy that you must allocate a certain amount of dollar/money into a potential crypto portfolio in a specific time frame despite the current movements of the market.
Even if the market is plummeting at the moment, you don’t chip into this imminent danger and stick with your dollar cost average that you allocated for yourself before the crisis appeared, and even if the market is booming, you do not change your dollar cost average. Decide on a specific number and make it a habit of investing the same amount every month at a dedicated day and time so that you are never manipulated by the fear of missing out even if a once in a lifetime crypto opportunity arises before you as you would have already secured yourself a position in there.
You might even have to fight the urge of getting yourself acquainted with multiple positions out there in a very tight time frame because remember that the adoption rate for crypto is still in its infancy, and it might require some time before it catches up to the desired level.
Avoid Using Too Many Indicators
Every analysis that is performed regardless of the financial etiquette requires the analyst to take into account a number of indicators and stick with these to develop the analysis. If you are conducting analysis in the field of chemistry or crypto market, remember not to meddle with too many indicators at the same time; otherwise, it is going to interfere with the experiment analysis that you want to conduct, and it will result in changing the values and your chance at a dedicated trade within the market.
There are various indicators in the crypto industry, such as the Fibonacci-retracement levels along with moving average, and the other such indexes as well. If you take all of these into account at the same time, then know that there are simply endless possibilities regarding these indicators and their tracking, which is why you need to steer clear of too many of these and only stick with the basics according to crypto that you want to conduct the analysis on or the situation that is presented before you.
Any professional trader at the top of their game will tell you the same thing that it is important to read the market more carefully and intimately rather than getting these indicators right. Some even like to track certain correlations within the conventional market systems, while many others focus only on studying the crypto charts. You can’t say that a dedicated process is right or wrong or to which degree it is more right or wrong because there is no hard and fast rule when it comes to negating the moves of the crypto market.
You either go with your gut or the analysis that you have performed with the indicators that you did choose for the task, but if you want to track six or seven of these indicators at the same time and then hope that you would get the final results right and you are definitely living in fairyland and must snap out of it at once to become an active part of the crypto trading community. Every financial market out there is extremely dynamic in its own doing, but for the crypto market, this statement is extremely accurate and on point, because it is one of those markets that change with the blink of an eye, and you won’t even notice what hit you and from where.
Be Ready to Step Aside
Suppose that a ship is sinking and you are holding its anchor now being as smart as you are, you know that the anchor is the first part that is going to sink, and you are asked by the lifeguards out there in the open sea to let go of the anchor. What do you do?
Definitely, you should let go of the anchor, take the hand of a lifeguard, and step onto a lifeboat, thus resulting in the survival of your life and putting an end to the nightmare that was you sinking in the open ocean. Now implement the same scenario, but instead of the ocean, it is the crypto market, and instead of the anchor, it is a position that has gone bad, and you must quit it and quit it now. There are going to be times when you do things incorrectly and make bad decisions despite banding together with the best indicators out there regarding financial analysis of the market, but it is just bad luck in the end.
Every trader, no matter how professional they are and what they do, might read the signs wrong, and you must not fret about that because as soon as you realize that you have got into a bad trade, you must try your best to get out of it and to recoup your losses. When you have got a bad deal, you must look at it first try to make some sense of it, you have to realize that you have got a bad deal, and it doesn’t mean that your trading skills have rusted and you need to step out of the game if needed.
The mental recurrence that these recurring and consistent losses have on a trader is extremely negative, and it might cloud your judgment in the long run if you have not taken some time off to clear your head. Remember, it is extremely important for you to do the clearing because if you don’t and you continue with the trading, you won’t be able to get even a single trade right, and where does it lead you at the end? More losses and more bad positions within the crypto market will happen.
Try to cope with it in any way that you know and don’t come back or get into crypto trading before you know for sure that you have made it alright with you and are now over those losses and bad breaks that you have had to experience in the past. At the end of the day, a genius trader is someone who is not the smartest or even a gifted one; it is someone who survives in this game the longest, and by survival, it is meant to prove your mettle and perseverance through consistency.
Always Invest in Winning Positions
There are some traders who would settle for less in the face of getting a handsome return over their earlier investment; it means that they would chip away the whole stock of crypto that they have initially bought, saying good riddance, and be done with it. This is not the most intimate way of doing business with the crypto market because you need to be subtle, and you need to be determined that you are not settling for less and is taking away a big scoop of profit at the end.
The volatility factor of the crypto market is intense, which means that even a 30% increase in your final winnings is not going to cover for all the losses that you have made along the way and the overall facet of expenses that you have cashed in or have bled all this time. That is why rather than chipping away your winning positions; you need to buy more because let’s face it, these are winning positions, and you are extremely certain of these flourishing in the future; why not just get more and more of these? What is the worst could happen?
This doesn’t mean that you should get extremely greedy and continue buying even in the face of a certain defeat, as the data at hand would suggest, but it is said that you should take your chance and if the sentiment and market data allow for it then, by all means, continue adding more to your position. But when you see that market is going to take a turn, simply let go of your winnings, see the demand and cash your profit out, as simple as that.
Simply by being a little brave and carrying a small amount of risk, you could double your profit or even head up all the way to 300% or 500% of the gains in a bullish run. These are some of the returns that you would be able to get from the market; that is why it is best if you are not afraid and play the game in a more logical way rather than sticking yourself with stones and mere cents when you can have the whole dollar.
Be Ready to Break Rules
If there existed a definitive set of rules for traders to turn up huge profits within the crypto market and remain well within the winnings side, then many crypto professionals might have found that road map by now. But as we haven’t meant that this thing simply doesn’t exist. If you are continuing with a dedicated strategy and you do not see any handsome returns whatsoever, then it is suggested that you should wise up and change your strategy.
There are no rigid rules when it comes to adopting a dedicated crypto strategy; some things work, some things don’t and some things work for the extent of a certain period. After that, you need to play the game a little differently change your rules to see if the next strategy is going to bring you the fruit that you so passionately yearns for.
It is not wrong to seek advice from crypto professionals and influencers, but that doesn’t mean that you need to follow that advice blindly because if you do, then you are only blowing a hole in your foot and that by no comparison is a good thing at all. Traders and people who take part in crypto market deals might have a specific depiction of risk and adding positions even after running into setbacks, and that is why you must think of your own capacity to invest in certain crypto positions and devise a proper strategy around it.
There is no need to break your back over a strategy that has proven helpful to some other trader and not you directly because in doing so, you are simply robbing yourself of the chance to do more and be more. The Crypto market is going to present you with a lot of opportunities along the line, and you must not lose heart if a certain opportunity did slip from your hands or you weren’t able to cash it out the way it was meant to be.
Continue with your own strategy at hand rather than giving any thought to what others are doing and how much their strategies are bringing them in terms of revenue. Keep your head cool and think logically, and you would most definitely be able to ace the crypto market.
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