For instance, suppose you’re day trading Bitcoin and have a rule that you’ll close your position if its price hits 10% over the price for which you bought it. Bitcoin hits that marker so, like a good day trader, you follow your rule strictly and sell. But then, unexpectedly the price just keeps going up as the market continues to recognize Bitcoin’s value. By focusing on day trading, you missed out on greater potential profits.
Technical analysis is not the be-all end-all of trading. It’s a tool to help you. Studying charts for hours trying to find patterns is not what’s going to make you money. Zooming in from a 15-minute chart to a 5-minute chart to find a pattern that’s not there is probably going to lose you money. Technical analysis works a good amount of the time, but don’t blindly follow it. If signals point to a trade that you don’t feel right about, it’s best to trust your gut and live to fight another day.
Altcoins and Bitcoins tend to react to each other. Sometimes they do the opposite of each other and sometimes they do exactly the same thing. It is not rare to see Bitcoin go down while alts go up (and vice versa). This is because almost everyone who has alts has Bitcoin, so they tend to move out of Bitcoin when it goes down and move into alts (and vice versa). Almost just as often as this is the case it isn’t the case. Many times, all coins will go up or down together (generally following Bitcoin’s lead). This dance often results in Bitcoin outperforming altcoins, however every x months we will see an alt boom where alts outpace Bitcoin quickly. If you can time that, great. Try to spot it coming and there is big money to be made. Meanwhile, alts can be tricky to just HODL, as they tend to lose value against fiat and BTC in the off season. Learn more about the relationship between Bitcoin and Alts. In a word, alts are generally more volatile than Bitcoin.
Dad advice: Aim to buy low, sell high; try not to buy high, sell low. Look at the price trend, if we are at the highest point it has been in the past 24 hours (days, weeks, etc), that is inherently riskier than buying at a short term low. It can make sense to buy as the price starts to break out, but buying after a breakout at a new high while filled with excitement is a little “irrationally exuberant.” This is to say aim to “buy the dips” and often “the best time to buy is when there’s blood in the streets… even if it is your own.” Conversely, the worst time to buy is often (but not always) right after the price has shot up and everyone is manic. If you do buy high, and it ends up dropping shortly after, consider HODLing (to “HODL” is to Hold On for Dear Life as the price goes down. It is what you do when you buy high and then neglect to set a stop or if you are going long and can’t or don’t want to cash out yet). Buying the dips and holding can be dangerous in a bear market, and it can put pressure on you to sell low if you overextend, but its still often better than FOMO buying the top. Sometimes it can be wise to sell for a loss or to buy when the price is at a local high, but knowing when this is the case requires a rather high skill level. Thus, although rules sometimes are best broken, start by aiming to buy low and sell high.Two last points 1. Knowing when to take a loss is hard, buying the dips and holding is easy. 2. The dips WILL happen, you must be patient and ward off FOMO!
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Sure, many lose a lot of money during the panic of a cryptocurrency crash or sell off. But, those that know what they are doing have the range of tools needed to make big profits during this time. Here are five of the best ways to turn a profit during cryptocurrency market turbulence, and how you can easily leverage all of them at once in order to make the most out of the current market opportunities.
If you are going long, consider building an average position (for example via dollar cost averaging or value averaging). There is no better way to avoid making a poorly timed trade than buying incrementally instead of all at once and thereby buying an asset at its “average” price over time. If you don’t have a really solid grasp of technical indicators and the way the volatile crypto markets work, consider averaging out of positions as well. Averaging isn’t just financially conservative, it is important psychologically. Taking too big of a position at once can be emotionally difficult to deal with (and can thus lead to bad decision making) given the historic volatility of the cryptocurrency market.
Backed by trusted investors and used by millions of customers globally, Coinbase is one of the most popular and well-known brokers and trading platforms in the world. The Coinbase platform makes it easy to securely buy, use, store and trade digital currency. Users can purchase bitcoins, Ether and now Litecoin from Coinbase through a digital wallet available on Android & iPhone or through trading with other users on the company’s Global Digital Asset Exchange (GDAX) subsidiary. GDAX currently operates in the US, Europe, UK, Canada, Australia, and Singapore. GDAX does not currently charge any transfer fees for moving funds between your Coinbase account and GDAX account. For now, the selection of tradable currencies will, however, depend on the country you live in. Check out the Coinbase FAQ and GDAX FAQ
Dollar cost averaging one’s purchases of Bitcoin reduces risk in sudden changes. This reduces the sting of or sudden pricing changes, reducing reliance on a single point of entry. By increasing your Bitcoin investment over time, you reduce the desire to buy or sell often. If there’s anything we’ve learned from the long run is that Bitcoin is here to stay (knock on wood). Stick to your gut, but don’t ignore others.
"People always think they are going to go in and buy when it's the dip," he says. "Say bitcoin is trading at $10,000, then a lot of selling occurs and causes panic and some investors reenter at $7,000. Then bitcoin bounces at $8,000, but goes back down to $6,000 and people buy back in thinking it's going back up and they are making money hand over fist."
There are some people who believe that Bitcoin is the only blockchain based protocol which has value and that all others will fail. These people are known as Bitcoin maximalists and their belief is based on economics, specifically Austrian economics, and that the technology which is great for Bitcoin is not useful for anything else. I am more open minded and believe that there are other applications of the technology which will create sustainable ecosystems but I could be proved wrong here. It is important to spend time doing your own research and building up your own view on where the technology may be used.
I am sorry because I am unable to give you a personal recommendation as we are a comparison website and general information service. Your decision would entirely depend on your needs. You will also need to put in the time to learn how each platform works, where each feature is and how to utilize it. Kindly spend some time with it and continue doing your research. You may find a list of trading platforms on the page you’re viewing. You may click the green “Go to site” button and/or the links for you to read more pertinent information about each option.
The problem with this approach is that once you sell, you’ve actually lost money (you don’t lose until you sell), and while in some cases, cutting your losses does make sense, most coins will bounce back in days, if not hours, and then the same people, seeing a surge, buy back at higher prices, only to repeat the cycle. Buying high and selling low is a one-way ticket to going broke.
Understand blockchain – You don’t need to understand the technical complexities, but a basic understanding will help you respond to news and announcements that may help you predict future price movements. It is essentially a continuously growing list of secure records (blocks). Cryptography secures the interactions and then stores them publicly. They serve as a public ledger, cutting out intermediaries such as banks.
Always pay attention to Bitcoin. Most altcoins (every cryptocurrency except Bitcoin) are pegged more closely to Bitcoin than Asian currencies were to the USD during the Asian Financial Crisis. If Bitcoin price pump drastically, altcoins price can go down as people try to exit altcoins to ride the BTC profits; inversely, if Bitcoin prices dump drastically, altcoin prices can go down, too, as people exit altcoins to exchange back into fiat. The best times for altcoin growth appear when Bitcoin shows organic growth or decline, or remains stagnant in price.