Everyone is watching the bitcoin market as the prices of the currency skyrocket only to shuttle back down again. Many traders are using the natural swings in the crypto market to buy in low and sell high. A very profitable tactic if done correctly and with adequate capital invested combined with low trading fees.
Some of the major exchanges like coin base actually do charge quite high fees, coin mama is another exchange that charges high fees. That’s why if you do wish to make money trading bitcoin and other altcoins back and forth, you must first start out by selecting the correct exchange that will be able to make your trades at a rate that remains profitable to you.
For example Binance charges only very moderate fees and you are also entitled to buy the binance coin which will then give you even cheaper trading fees. For example when the binance coin first came out it allowed you to get 50% off your trading fees. Now one year later it is a 25% discount and next year it will half again, and continue halving each year for 5 years and after which there will no longer be a discount. Yet the coin itself is a great investment and has shown amazing returns.
After selecting your exchange and setting yourself up, you will likely want to keep a wallet. Many exchanges nowadays will allow you to maintain funds inside your account, and generally it is relatively safe provided that you can activate google authenticator or SMS to login to your account.
However if you are looking to trade in volumes and are holding certain coins, like bitcoin long, then you will likely want to get an offline storage device.
Once your wallet is setup and you have your backup keys as well as backups for your devices that you are trading and holding currency on, you can move to the next step.
Now comes the fun bit, really get to know the market. Every inch of it. How it response to different news and things coming up in the media. Both good and bad have an affect on prices in most cases.
Also retrace the markets so you can look far back to the beginning of crypto more than ten years ago now. By looking back you can see how the market has been behaving ever since its inception.
This information is key!
While the market does not always response exactly as it has in the past, there are certain trends that definitely do exist. And these trends are what we wish to locate and begin to place and invest our money based on ongoing long — and short — trends.
One possible way of doing this is how I like to trade my long positions., I have long positions in BTC, XML, LTC, ADA, NEO, TRX, EOS and many more.
These positions are positions that I bought a very low prices because the market was bottoming out when I picked up the coins. I like the coins I have and am adding to my position. However I can also see that some of these coins become overpriced for where we currently are in the market cycle.
When that happens what we can do is look to see which coins we believe are currently overpriced in the market and which ones we can begin to sell off. Once we sell off or make any trade whatsoever in fact, we should re-balance our books so we know exactly where we are up to.
We know the price we bought in at and we mark it all down in our notebooks so we know all the trades that we have made, the prices, market conditions and when we wish to sell.
If we know the price that we think is overvalued for the coin we select then we know when we are comfortable selling it.
The main problems of course in trading of any kind, whether it is trading stocks, bonds or cryptocurrencies, is that we must learn to control our emotions.
The way people lose money in any investment is buying high and selling low. So this is the main thing we wish to avoid when we are investing. We are looking to buy when the market is bearish and sell when the market is bullish.
When prices are going down, remember that is a market cycle to buy into, and when coin prices are going up and up with no end in sight — it’s time to sell.
If we can control our buy and sell response then we can begin to better make adjustments and trades without greed or fear raising its ugly head.
When the market is bullish and your coins are growing in value it is easy to get greedy and think that the market will never stop and just go up and up for ever. NEVER. The market never responds in that way.
Whenever the prices of a security, a crypto coin or anything else is rising fast and becoming very bullish, just remember the price you have already set to sell at. And don’t worry the market will come down again in almost all cases and you may buy back in at a lower price and keep the money in between as profits from your trades.
We have more to add to this post and will update it soon, yet for now remember greed and fear, market cycles and when to sell, as well as when to buy.
Buy low, Sell high.