During different market cycles, many emotions spread to traders and there is an urgent need to form certain strategies to ensure achieving the greatest possible benefit and reducing the percentage of loss as much as possible.
First, let me tell you a little about market cycles. What are they?
Financial markets in all their fields go through regular price cycles and you can find them anywhere in Forex or even the vital markets near you, so you can sense this matter anywhere.
Price stages or market cycles are cycles that you can see on any chart or graph, whatever it may be, and they are represented by an upward price trend, which is also called an upward trend, and the other direction is completely opposite to the latter and is represented by a downward price trend, which analysts call a downtrend, and there is a third direction, which is sideways trading.
How does an uptrend form?
The price starts at a certain point and continues to rise, i.e. it achieves a higher peak than the peak with each correction wave followed by an increase. An example of this is when $BTC started to rise from a price of 15k and achieved a new peak at 73k, where it formed an upward trend. The price fluctuates from time to time, up or down, but it is still in the same trend because it did not penetrate the peak or the bottom.
The downtrend is formed like the uptrend, but the price is down, as the price starts from the top down until it forms the new bottom, which may be higher than the previous bottom, but this is the bottom of the downtrend or the current downward wave.
The sideways trend is when the trading level or price is in a specific range that does not penetrate the top or bottom and remains for a short period of time until it forms a bottom lower than the bottom, and thus we have started a downtrend or a top higher than the top, and thus we have started an uptrend.
So, once you understand the market cycles, it will help you to know where to enter and what the market trends will be. Is the current correction just a correction or has the market started to change course? In addition to the above, understanding the market condition helps to build more informed decisions and investment vision. When you see the overall situation from an investment perspective and determine the market direction, you will not panic when you see a slight change.
Here is a piece of advice for you, my dear, that financial market experts and experienced traders always say, and it is a rule for them (buy with fear and sell with greed).
Here are the important points that we advise you to follow, and most of the experts prefer these strategies.
1. Enter with the market cycle and not against it: When the market is in a state of sideways trading or stagnation, for example, wait until a signal appears that the bull market has begun, as we mentioned before, when the chart begins to form a higher peak than the previous one.
2. Always set your goals: Do not buy unless you have set your goal. Do not let fear or greed control you (the market does not know feelings, my friend).
3. Follow the indicators: There are many indicators that help you distinguish the market condition, including the fear and greed index, which provides you with insight into the market, which contributes to creating greater opportunities for you.
4. Set a stop loss: Always set a stop loss just as you set your target. You must set a point to exit with the current loss to avoid a bigger loss and gain a better opportunity to buy again at a lower price.
5. Understand and learn financial market analysis: Entering without the basics of trading is like driving at night without lights, you don’t know if you are still on the road or have deviated (I advise you to review Binance Academy).
6. Consult experts: It is okay to ask for help from expert traders as understanding the advice is important to make smoother decisions, CryptoMENA for example.
7. Book your profits: As we mentioned earlier, you can set your goals and book profits at each goal. This reduces severe stress and gives more security to your psyche when you see a little green in your portfolio while the market is in a state of correction.
8. The last and most important piece of advice: You should always enter with an amount that you can afford to lose partially or completely. This gives you greater confidence, which helps you stay for as long as possible in difficult times so that you do not exit with a loss and lose your positions and prices. Then you will regret having sold, when you see that the market has achieved your goals.
