With a little planning and study, triple and quadruple-digit cryptocurrency earnings may be feasible in any market.
Investing in digital assets is considered as a lucrative possibility by many, with tales of early adopters retiring millionaires and newcomers making a 300 percent profit or more on their bitcoin holdings.
Despite this, cryptocurrency remains one of the most volatile asset classes, with large price fluctuations ranging from the highest highs to the lowest lows. As a result, it’s usual for rookie investors to try to timing the market, particularly if they’ve already made a few good bets.
Unfortunately, this is risky thinking because, like with traditional asset classes, predicting when a rise or slump will happen is impossible. Few could have expected the present global market, which has created a great buying opportunity given that top cap tokens are trading at a huge discount to prior all-time highs.
The fact that the cryptocurrency market is open 24 hours a day adds to the complexity, making it an even more scary setting for new investors to traverse. As a result, there is no reliable method for timing the bitcoin market, and the idea is strongly discouraged.
Patience and strategy, rather than timing an entry point, become increasingly important for investors trying to develop wealth over the long term. Cryptocurrency, like traditional assets, follows predictable cycles, with prices constantly compounding.
As a result, long-term investors that place a heavy emphasis on strategy are far more likely to prosper than short-term traders. Timing the market, as the cliché goes, often loses out to time spent in the market.
As a result, investors are encouraged to shift their investment strategies away from chance and toward more responsible ones. Consider that, despite the fact that crypto trades are available 24 hours a day, diligent daily research will reveal trends, and the inclusion of strategy will reduce risk.
Making use of a strategy
Investing only what a trader is ready to lose and resisting the irresistible sway of fear and greed are two fundamental factors that enable a successful trading approach. These efforts are frequently only simple in theory, necessitating the use of a partially or fully automated trading platform to assist with execution.
Users are urged, for example, to employ a dollar-cost averaging (DCA) technique rather than attempting to time a market dip to develop their bitcoin portfolio while reducing stress.
Warren Buffet’s preferred technique is to buy into a position by spreading payments out over time and adjusting the buying price. Typically, investors may select a recurrent amount to be paid out, effectively averaging out the asset’s cost over time and reducing the risk of paying too much or missing a price decline. Many modern investment programs try to automate this process by allowing users to choose a trading frequency (hourly, daily, monthly, etc.) and price limit that the automated platform will follow.
Grid trading is a strategy that follows a similar technique. When orders are placed above and below a specified price, this is known as grid trading.
Traders can place buy orders at every $2,000 below the market price of Bitcoin (BTC) and sell orders at every $2,000 above the market price in practice. An automated software will use these movements to purchase cheap and sell high as assets fluctuate within that range. This method eliminates the need to time the market and allows investors to profit from sideways markets when prices move within a fixed range.
Reducing the impact
Matrixport has created a set of tools to help new traders bridge the knowledge gap and make cryptocurrency trading more intelligent. Matrixport is currently one of Asia’s fastest-growing digital asset financial services platforms, with products including an Auto-Invest tool for users to use DCA, grid strategy functionality, and options-based Buy-Below-Market (BBM) and Sell-Above-Market (SAM) offerings.
BBM and SAM were the first of their kind in the business, allowing users to purchase and sell Bitcoin at lower or higher prices than the market price. Traditional wealth management accumulator and decumulator solutions were redesigned for cryptocurrency clients to inspire these offers. The benefit to investors is twofold: it allows them to control an otherwise unpredictable market while also removing the human emotion that causes panicky reactions to market drops. Although the original model’s minimum requirement was $1 million, the BBM/SAM feature has made the feature accessible to the average investor with a $100 minimum requirement.
Each pricing option can result in one of three consequences. In the case of BBM, this may mean the asset settling in range and using half of the user’s funds to buy it, the price settling on the lower bound of the range and being used to buy it, or the price settling over the range and the order being cancelled out. And wSAM is BBM’s inverse technique.
Investors will be able to fill in the holes in their smart trading methods by using tools such as BBM and SAM, among others. Matrixport boasts a smooth market transition for new investors as a cautious method that eliminates the need to time the market, albeit this does not eliminate all dangers.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.