People have created a wrong perception about the cryptocurrency markets that they can make money easily. Without doing proper research, we buy anything and think it will give us profits.
Everyone is trading and investing without even knowing what they are doing.
This might work well for some time, until our luck runs out, which undoubtedly will because nobody wins forever at this game.
To win in this game, you need to know the difference between the trading, an investment and the speculations.
Trading, Speculations and Investments.
Trading is when you work on the charts, do technical analysis and make a move on the future predictions. It is more of a short-term investment.
Speculation is when you buy something based on its current price and its past prices. You make predictions that the price of the coin will increase based on the past prices of that coin.
People need to understand that most of them should be investors, instead of traders and speculators.
An investor is one who invests in a product, not in the price of the coin. An investor is backed by deep research of the project and team, the development going on in the project and the future use of that coin.
One Who Makes A Long-Term Investment, Always Reaps The Profits.
Pick up any project in the market from the history, and you will see that the biggest profits were made in the long-term investments only. The projects that were legitimate were there for the longest time, and the corrupt ones broke down in a year or two.
If you don't have to look at the price of your holdings daily, you are assured about the bright future of the project you invested in, and good returns on your capital investment; then you can say you have made a good investment.
One Should Know When To Buy And When To Sell.
We should keep in mind that if the project is sound, it doesn't mean it is undervalued. A lot matters at what price and at what time you buy it.
If you buy an overpriced good coin, you will face the same losses if you invest in an undervalued poor project.
The general tagline to make profits in the market goes as follows: buy low and sell high. But most of the people do exactly the opposite of it.
To lessen the losses in the bear market, people have to sell their holdings which makes them a high buyer and a low seller.
The right way to do this must be to take out profits in the bull market and find out projects that offer promising returns.
Then you have to wait for the market to drop, and that is the right time to invest in your chosen project.
After that, you only have to have the patience.
Buying in the pessimistic market and selling in the optimistic market is the best bet one can have, but only if one has taken out profits for the bleak times.
Keep 25% Of Your Money To Reinvest In The Super-Bear Market.
To take advantage of the bear market, it is quite significant to keep 25% of your money to invest when the market has seen significant drops. Then you can take it out when the market rises to repeat the process. This trick will definitely help us to grow our overall wealth and position in the market.
You can make the profit only when new money comes in the market. And it comes in the optimistic market only. That is the time to cash out and wait for the market to turn.
It doesn't hurt to be a smart investor.