The basic strategies and mistakes to avoid. The keywords, comparison with stock markets and windmill hunting.
"I was so excited when I bought the first Bitcoin and now I'm scared. I did not expect such a retreat. I'm afraid I'll lose the rest of my money. " "I do not understand what is happening, all I see is the price to go down and my money to run out. Whatever I wanted and did, I will leave to save the worst. "
If you've been thinking about this lately, it's obvious that you're on the wrong track . You have entered the field of crypto with incomplete knowledge and no stock market strategy. This mistake is always made by novice investors, wherever they are active. Whether it's stocks, or currencies, or bonds.
What are the key strategies in crypto? Whatever they are in every stock market. The scalp , the buy and hold , the voltage search . There are other ways, but let's stay with them.
For the scalp, we will not talk much. It has so many disadvantages, from psychological to practical, that it makes no sense to deal with it. So far no one was able to send in the perfect solution, which is not strange. Especially in crypto, those who follow them, even if they do not lose from their transactions, will lose the big upward wave. They will be so familiar with the quick moves that even if they manage to buy at the right time, they will sell very quickly and lose the party.
But worst of all, those who attempt it destroy their mental health. They are overwhelmed by passion and have lost the meaning of investing. They have escaped their purpose, to be free from financial stress, to gain economic independence. How will they achieve this if they are constantly stressed?
We invest to have a second income, which will give us time to be with our loved ones. To live a comfortable, not deprived life.
Buy and hold (hodl in crypto slang), despite what you hear, is not the right strategy in crypto. It certainly sounds appealing to the beginner or relative beginner, because it is a completely lazy and passive strategy. It requires a minimum of involvement. In addition, it sounds impressive. If you had put a small fortune on Microsoft in 1980, even your grandchildren would have lived comfortably. Correctly; True, some stocks did break down. However, much more was lost. They disappeared into oblivion. This way a lot of money has been lost. Is there a risk even if I invest in "safe" stocks? The answer can be given to you by anyone who applied this tactic to the flagship, until recently, of the Greek stock exchange, the National Bank. You will find many.
If we want to invest in this way, it means that our purchase price will be more or less at a random price. This is not the main disadvantage of this strategy, however. It does not have an emergency exit . Either in the good scenario, where with the purchase you start to rise, or in the bad, where it starts to decline.
Who hasn't been tempted by the prospect of putting a small fortune on Bitcoin in 2010? Very good in theory, but in practice few did . In any case, this opportunity is now a thing of the past.
Take a look at the Bitcoin chart here. In retrospect, we all say that I had entered when he had a few cents or even a few dollars. And where to sell? Here it is, at 20,000 (red arrow). Unfortunately, it's not that easy in practice, is it? For example, in 2017, Bitcoin started at $ 1,000 (yellow arrow). What price-target to put? 20% more? 50%; 100%; If you applied it, you would have written off a catastrophic failure. It reached $ 20,000. And after; Say you didn't sell and you saw it at the top. To leave it without a plan, free, to go again 3,300 (green arrow)? You will hit your head on the wall again. Price has the bad habit of not just going in one direction. It goes in the opposite direction. What will you achieve in this case? Apart from the money you have lost, you will not sleep,
And then, under the state of panic, make the decision based on emotion. Either you will do muayen, or you will sell, or you will stay frozen without doing anything. Whatever you choose, it will be wrong. Why; Because you won't think coldly. It will not be a logical but an emotional reaction.
The third way, the search for trend, helps you keep your cool. Don't be fooled by Bitcoin fluctuations. Allow him space to move. The one who follows the trend has no target price. Sky is the limit. But there is a system with a predetermined way out. The difference is huge with the target price!
The advantage is that we manage to liquidate before it causes us serious damage. We don't mean with frequent trades. When we see it falling, starting to sell in order to buy back a few dollars below is not a solution. Often trade with sharp fluctuations is a double-edged sword. Don't be deluded. The crypto will not continue to move like the train of terror. When you expect to multiply your money, it makes sense to expect a significant percentage of concessions , without risk. There is no such stock market. Or, if there is, please tell him to me too.
But until he is found, personally, I have no intention of leaving my position at the mercy of fate. No one knows what may happen tomorrow, but it can be prepared. That is why the strategy of the trend is preferable and not of "I keep what happens".
But which strategy of all to look for in a trend to follow? That is the crucial question. For example, it is not possible to follow a tactic that does not take into account that if we exclude the 10 best days of each year, Bitcoin has an annual negative return. If you don't know this, I'm very afraid you're chasing windmills.
