Welcome to Part 6 of a series of articles about CryptoTrading for Beginners.
For an overview of previous parts, scroll to the bottom of this article.
About the September-November fluctuations.
The last few days, the Bitcoin (BTC) value dropped a few thousand $ and Bitcoin Cash (BCC) gained one thousand $ in value and people are panicking. Some claim BCC will take over the position of BTC, that BTC is dead, and so on. They seem to be focussed on micro-events instead of the macro view.
But if you look back to 3 months ago, BTC is still up. Actually, the spike that BTC made the last 2 months was very unnatural. Just 2 months ago, everyone was writing that the big gain of BTC value was because of 2 planned forks and that was a correction to be expected after the forks.
Now that the Segwit2X fork was canceled, some people believe there are opportunities to be made with BCC.
The way I see it, a group of people jumped on BTC a few months ago, hoping for quick cash to be made with the forks and now they are doing the same with BCC.
This is why I'm not worried about the future and value of BTC for the next year or so. Eventually, there might be a shift to more modern cryptocurrencies but I don't see this being BCC. I could also be wrong...
Why I believe in the macro perspective
I think I bought my first Bitcoin at around $30. I gained some more through mining and spend some online. But then the price went up to $100, then $300 and eventually $1000 and I sold a lot of my coins (some at $100, some at $300). I still kept some, but today I wish I still had all of them.
Last year I exchanged some BTC for ETH and LTC. And although I made nice gains on both coins, I could have gained even more if I had kept all in BTC. But again, this is looking at the micro perspective. Who knows how much I will have gained on ETH or LTC in 12 months from now?
The potential of BTC is still huge.Some say it can go to ten thousand dollars, others say 25 thousand and some believe it can be even more.
Either you believe in the long-term possibility of a cryptocurrency or you don't. If you don't, you shouldn't invest in it in the first place.
Some people say that holding on to a coin, whatever happens, is stupid. I just read an article about how you should sell high and re-buy at a lower price. But they only say these things in hindsight.
When the price rose to $5000 a few months ago, it would have been a logical time to sell and re-buy later at a lower price. But instead. the price went up to almost $8000 and never went much lower than $5000 in the latest dip.
Now, I can't predict the future, maybe the price goes up tomorrow, maybe it goes down more. But betting on a certain course change is a gamble. Holding on is not.
My idea is to look at the macro perspective and only sell when you want to get out, or when you deliberately want to take some profit and invest it in other coins (or exchange back to fiat currency).
Stick to your plan
I might be wrong about the way things are going with Bitcoin. But that is not the point.
When you trade, you should define your game plan in advance and stick to it, no matter how rough the sea can be. If you don't, you will let your emotions and mood of the day influence your trading. And that seldom delivers great results.
So for each cryptocurrency you buy, decide what your plan is. Will you sell at a 100% gain? Or will you keep it for 12 months, no matter what happens? Write this down and stick to it. Don't let daily opinions influence your trading. Those people on twitter are just regular people, they don't have hidden information that you don't have. Don't let fancy graphs fool you. Everyone can draw lines on a graph, I did it for this post.
Remember what I wrote in my previous post: Bitcoin was created 8 years ago. One year ago, the value was around $700. It took 7 years to get to that point, one year later it's at $6300 at the time of writing. Nobody predicted this, why would they know what will happen next?
Previous Parts in this Series
In Part 1 I talked about choosing your portfolio. We did everything on paper before actually buying any coin.
In Part 2 I explained how to buy your first coins using Coinbase.
In Part 3 I discussed how to use Exchanges.
In Part 4 I showed how to transfer Bitcoin from Coinbase to your Bittrex wallet
In Part 5 I wrote about what to look for when choosing a CryptoCoin to invest in
Anything else you want me to cover? Let me know in the comments or join my free group on Facebook
Stay tuned for Part 7 of this series! And don't forget to upvote my post on SteemIt :)