As a crypto trader, it mustn’t be said but I’m going to say it anyway, “As long as the market runs green, we don’t really care about the code. Period.”
The past couple of weeks would’ve almost been funny if Bitcoin hadn’t left the 10k league of assets. It would have been a correction, a supernormal one that usually occurs when the market is overbought. But the drastic drop after all the negative comments by we know who were circulating all over the internet.
Nevertheless, Bitcoin doesn’t care what Presidents, decision-makers or anybody really says, it works purely on the basis of peer-to-peer demand and supply. It’s as good as you and I managing the Bitcoin network, the sentiments drive this market, nothing but us – the investors, hodlers, and traders make the difference.
This article is an opinion editorial for every crypto-enthusiast out there which will help you to trade in the current crypto market with the right mindset.
“Every once in a while, the market does something so stupid it takes your breath away.”
– Jim Cramer, Founder TheStreet.com
Understanding that Market fluctuates – it’s not always Green day
The major reason why traditional market traders stay away from cryptocurrencies is due to the volatility of these assets. The way it rapidly changes its trends and pretends to be cool after a severe dump.
In Benjamin Graham’s book, The Intelligent Investor, that inspired Warren Buffet, [based on the traditional stock market] he says:
‘Never buy a stock immediately after a substantial rise or sell one immediately after a substantial drop’.
What can the traders of the crypto community do if the substantial rise and drop happens within seconds and way too often than it does in stocks? Answer:- Nothing. That’s what the stock guys do and it really works!
Nothing. But follow what the mathematics defines an envelope of values; by using the highest high or the lowest low of the last ‘n’ periods.
For example, if we read the 3-month chart of a crypto, let’s just say Bitcoin [BTC], the lowest low is $3200 [6 months chart] while the highest high is $5200 [6 months chart] and the current price is $4600. And a crash of let’s just say $600 takes place in an hour, BTC drops to the trading price of $4000. What am I going to really do?
Absolutely nothing! It hasn’t left the support level, it didn’t break the $3200 margin.
It just experienced a heavy crash due to a number of reasons such as an institutional investor shifting or selling a part of its BTC for XYZ reasons or a whale selling its BTC to buy-back at a much lower price of $4000 than its earlier trading price of $4600.
Selling your crypto right after the dump without any calculation is as good as dumping your money in trash because you couldn’t let it stay in a piggy bank.
[Now, this is only applicable if you have invested in the right kind of cryptocurrencies, backed by technologies whose advancement will actually make a difference in the world in the coming years because no poop coin will make you money. It’s the real disruptive technology that grows and gives you the results.]
Don’t speculate, you either day trade or hodl
“October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August, and February.”
– Mark Twain
There’s a huge difference between investors, traders, and speculators. The speculator’s primary interest lies in “anticipating and profiting from market fluctuations”. The investor’s interest lies in acquiring and holding suitable securities at suitable prices to buy at low levels and sell at high after gaining sufficient profits. On the other hand, traders are much like investors except they work short-time as they buy/sell assets as soon as they notice a difference in its pricing.
Right now the internet is filled with Bitcoin’s declining prices and speculations of what might happen next. This the point where you decide what you are – an investor, a trader or a mere speculator.