- Many new entrants to the crypto trading world complain that the price of a token always goes down after they buy
- They curse their luck, when in fact a bad entry point or hasty sell is to blame
- Here are three key ways to reduce your chances of an immediate loss when crypto trading
“The price always goes down when I buy” is a common complaint from those in the crypto trading world who feel they have a Midas touch. Many who see their picks go immediately into the red put this down to bad luck, but there are three key behaviours that give luck a very big helping hand. Kick these into touch and you should be seeing more green than red in your crypto trading very soon.
Monitor Recent Activity
Before you consider buying into a coin, the first thing you should do is check out its recent performance. A coin that has been on a rampage might have very little gas left in the tank and will likely be due a correction, so buying at that point is asking for trouble. Conversely, a coin that looks to have bottomed out will have much more chance of upside, although perhaps not immediately.
If you’re buying an alt coin, you’re doing so in the knowledge that a strong Bitcoin move in either direction could also mess with your plans. To this end, make sure you take notice of Bitcoin’s recent movements and market sentiment, which will give you an idea of its likelihood of movement in the near future. A stagnant Bitcoin is the best situation for alts, so look for evidence of this if your crypto trading strategy is alt-heavy.
Social Media Exposure
Are you considering buying a token because it has been hyped as the next 10x on crypto Twitter? Stop! The people who shill their bags on social media do so because they bought in much earlier (when you should have been) and are actively trying to get people like you to fomo into the coin so they can dump on you for a healthy profit.
If you see a coin being heavily touted and it has not yet moved much then it may be worth investigating, but basing a crypto trading strategy around picking up coins that have already moved after a Twitter shilling is much more likely to end with your holding being in the red.
Many people know the famous adage that if you have made a loss on Bitcoin you haven’t held for long enough. The same applies to alt coins (in a bull market) when crypto trading. No sensible trader buys a token and kicks up a fuss when it drops 5% the same day. When the price is so close to your entry there is naturally the chance that the volatility inherent in the crypto trading market will knock your coin into the red temporarily, but given time a solid pick will rise up and away from your entry point, reducing the chance of it turning red.
Constantly checking your crypto trading portfolio once you’ve bought is a sure way to make bad, hasty decisions. How many times have you sold a coin for a loss only to see it surpass your sale point and then your former entry point weeks or even days later? More often than not in crypto trading a coin will come back – just give it time.
Crypto Trading Strategies Can Mitigate Against Luck
When it comes to crypto trading, there is a reason that so many are unsuccessful. As we saw in 2017, many in the space have never traded before and do not know how to navigate the ups and downs of a single trade, let alone manage a diverse portfolio.
Too many jump into trades on the back of what they see on social media and sell at the first sign of a dip, cursing their luck and compounding their losses until they are all out of cash. As we have just seen however, luck can be mitigated against to some degree, and the more you can replace luck with strategy in your crypto trading using the tips above, the more successful you will be.