Crypto market analysts strongly recommend that in order to profit from crypto assets, investors must “buy low” and “sell high.” However, I have yet to see any of these “experts” explain what they consider “low” and what they consider “high.”
I don't consider myself an expert in the crypto market, nor do I have advanced technical knowledge on the subject, so I tried to develop an investment strategy that would optimize my profits and minimize my losses, but I came up against the lack of clear definitions of some financial market jargon, such as “high” and “low”, among others.
In view of this, I developed my own definitions, which are the foundations of my investment strategy in virtual assets, aiming to maximize profits and minimize losses.
Let's start with the basic definitions that I adopt (I don't know if they are the most correct, but they are the ones I use in my strategy):
1 - Stable without bias: when there is no price variation (0.00%);
2 - Stable with an upward bias: when the positive price variation is between +0.01% and +3.00%;
3 - Stable with downward bias: when the negative price variation is between -0.01% and -3.00%;
4 - High: when the positive price variation is greater than +3.00%;
5 - Low: when the negative price variation is greater than -3.00%;
6 - Uptrend: when the price rises + 6.00%;
7 - Downtrend: when the price falls more than -6.00%;
8 – Reference price: is the price adopted as a reference to check whether a cryptocurrency is Stable (with an upward or downward bias or without bias), High or Low.
As a rule, I buy when an asset, with a good project (I study the whitepaper, look for the latest news about crypto and check the general market sentiment) is on a downtrend (it has already fallen more than 6% in relation to its last price), since the probability of reversing the downtrend, in my opinion, is much greater than continuing to fall and, even if it falls a little more, the possibility of a recovery in the near future (3 months or less) is high (precisely because it has a good project and good acceptance in the market).
In the case of selling, I try to sell when the crypto is UP by at least 4.00% per month (example: if I am holding the crypto for two months, I only sell if the UP is equal to or greater than 8%), using my purchase price as the Reference Price (despite having already sold, due to urgent need, even at a loss), regardless of whether the crypto, in the market's view, is up or down at the time of sale (example: if the cryptocurrency is up, in the market's view, by 30% in the last 30 days, but the current market price is 5.0% below my purchase price, this cryptocurrency, in relation to my purchase price, is still down by 5.00%, therefore not being the appropriate time to sell it).
The establishment of the basic definitions that I adopt, and that I am now sharing with the Binance community (this is not financial advice), were fundamental for me to outline my investment strategy in the crypto market, maximizing my profits and minimizing my losses (it being true that losses will always exist, to a greater or lesser degree, regardless of the strategy used).
Right after this post, within my personal investment strategy, I will buy $TIA and $PUNDIX .
Good profits to all.
