๐น๏ธ YOU Dont WANNA MISS These 3 IMPORTANT TIPS ๐ฑ๐จ
Regardless of where you are on your crypto journey, you want to have a plan. In fact, you NEED to have a plan.
A brief intro in case you are just starting out in crypto
๐ HODL - this stands for 'hold on for dear life' and typically is an ideology of the die hard cryptologico cryptonian who believes in their coin to the death and you cannot pry their tokens from their cold dead body if you try. While the HODL is an intentional investment strategy, it also lacks a few important key features in strategy. For instance, at some point there should be an actual plan to lock in profit, pass the HODL on to generations to come, or attach a way to utilize the coin's rising value in place of fiat. These are big challenges to the HODLer. In addition to a true blue HODL, there is the HODL by force, where someone is 'stuck' with their HODL bags, or coins that drop so fast and furious Vin Diesel comes ready to run over the market price with a tuner car. The unintentional HODLer often finds a sense of community among others going through the same thing, because crypto markets come and go in cycles, so if a person is going AltCoin crazy, there is a good chance some time in the near future, they will be joining thousands of others who are down in the dumps at the question to whether their bags will ever revive.
โ Investing - while similar to the HODL, is a long duration with a target. Investments are designed to have a forward view of the gradual long term value of an asset, but there is a strategy behind investments. A person may long or short an investment depending on their research, but typically you can stack up investments much like the HODL, but the end game truly is about taking profit, either in one big pay off after a target sell, or choosing key landmarks to grab some profit while allowing some of the asset to mature. Investments in traditional finance often include incentives like dividends that help a person feel good about holding long term, and even to consider rolling those dividends into new shares, or coins.
๐ Swing Trading - this is the next longest duration a person might trade, and this is very fast paced for most people in crypto. Swing trading is essentially studying the market with a plan to set up a trade that one believes is a good low buy on day one, in order to sell at peak day two. A swing trade is meant to take 2 days, 3 days max.ย
Day Trading - This is the fastest pace category for trading, where the person intends to grab profit intra-day... the same day.ย
I can take this even one step further, to label the fastest form of day trading, as scalping, where a person is literally just watching the market momentum for a chance to quickly swoop in and grab a tiny profit and go.
Each of these trading plans come with a myriad of interesting options. I will break these down in future posts because I like to do so. For here, consider this an overview across all categories.
The HODLer and Investor can both do something that they will benefit from, which is to DCA, or Dollar Cost Average.
This is essentially a strategy to buy at regular intervals, a set amount of their asset, regardless of the current price. You can imagine that in crypto there is a plus and minus to the real die-hard set-it-and-forget-it DCA model. In crypto, we like to call it "staking sats". The person doesn't sell, but does regularly add to their asset over time.ย
Statistics are a fascinating thing, and theoretical math has some mysteries that I will never grow tired of. In this case, the fact that averaging simply works just absolutely fascinates me. Much like the wisdom of the crowd and other statistical truisms that just don't seem possible, dollar cost averaging proves to be a way to gain value while investing without the stress of watching the market regularly, and it typically means a person will sometimes intentionally buy the dip, other times buy right at the peak, and yet other times anywhere in between. Over years it all averages out to a decent average market value.
๐ฅ๐ฅ 10 trading learnings to keep in mind when trading
๐น๏ธ Always wait for the daily closing of the candle to determine the next movements.
๐น๏ธ Lows are determined by rising candles, while highs are determined by falling candles.
๐น๏ธ A penetrating bullish candle closure on a formed low, the return can be between 30% - 50% of the candle.
๐น๏ธ A rising candlestick closure with little volume in a formed low, the return can be between 100% - 140% of the candle.
๐น๏ธ Diagonals should be drawn above each high and low formed during the move.
๐น๏ธ When the trend accelerates, the price will not touch the support diagonally and will form a new trend angle to be plotted, if the new support is broken, we should expect a retracement to the previous trend angle.
๐น๏ธ Patterns can also be imperfect in their shapes, however, a proper count of highs and lows allows you to keep reading the price.
๐น๏ธ A high formed by a long wick is a sign of a high taken offer, the price can start to form a rising wedge or fall drastically.
๐น๏ธ A minimum formed by a long wick is a sign of a strong area of demand taken, the price can start to form a falling wedge or rise dramatically.
๐น๏ธ If the high range of a pattern is exceeded by the closing of a candle, the price will continue to rise to a new zone of supply, if the subsequent retreat remains above that range, the chances of continuing upwards are very high.
3 useful tips when deciding to do an operation: ย
โ Never forget that the odds of a long trade being a winner increase when your entry is as close to the demand zone as possible.
โ Don't make your entry immediately when the price reaches a demand zone, always expect the price to form an HL above the previous low, if the price action does not show a reversal pattern, the price will not go up.
โ Never forget to place your stop losses, they allow you to save time and adjust your loss tolerance based on the risk level of the current scenario.
