What’s The Best Cryptocurrency Investment Strategy?January 30, 2019
What’s The Best Cryptocurrency Investment Strategy?
For those of you who might be new to the cryptocurrency market and investing, it won’t take very long to notice its volatility. The cryptocurrency market does not have the same patterns at the New York Stock Exchange or the NASDAQ. Buying and selling stocks, for instance, is very different than buying and selling cryptocurrency. Don’t be fooled into thinking that if you were a successful stock trader, you’ll automatically be a good crypto trader.
Like it or not, because of market volatility, some days you might think your on a roller coaster ride with prices going up or down quickly. Welcome to the world of cryptocurrency investing!! It’s not uncommon, depending on the token, to have double or triple digit fluctuations within a short time period. Depending on your investment experience level, this could be good or bad. Quick gains can be made in a short amount of time and conversely loses can add up as well.
One of the first questions that might be helpful to ask yourself before you begin buying cryptocurrency is, “Am I a trader or an investor?” This seems like a rather simple question but it’s one I sometimes struggle with depending on how volatile the market is. Let me explain.
Your mindset will be different if you come into the crypto space with a trader mentality as opposed to an investor mentality. If you are a beginner trader, please be cautious when buying and selling. Your inexperience may end up working against you. If you are a beginner, I suggest you start SLOWLY. Take your time and gain more trading experience as you go along. Be patient!
If you are a seasoned trader, you might tend to view market volatility as an opportunity to gain profits in a relatively short period of time. My personal experience as a trader has not been very good. I’m a beginner trader who is still learning how to trade more effectively. It has taken time but I’m glad I’ve gone slowly. There were times when I panicked and sold too quickly and took losses. Oh well! I’m still learning.
What if you decide to be a cryptocurrency investor instead of a trader? Is there a strategy for that? You bet! An extremely popular strategy among investors is “HODL.” It’s an acronym for “Hold on for Dear Life.” It’s pretty straightforward and the idea is to keep your crypto investments for a long period of time, irrespective of the price fluctuations. I’ll be the first one to tell you that it’s a simple yet effective way (over time) to make nice profits. It still takes discipline and nerves of steel but it can be done! No one wants to invest to lose money. This is a nice and simple method that anyone can learn to do!! Buy and Hold. Following this approach, the investor will be looking at long-term returns and will ignore short and medium term market movements.
I’ve laid out a few simple methods of trading and investing. The choice is yours. What will you decide? Both strategies can work to your advantage and make you impressive profits. Choose wisely!
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