Irrespective of your experience in trading, nobody can rule the price swings of the market. The volatility of BTC is the standard measure of the daily fluctuations, which stands at 64% annualized. However, the same metric for S&P 500 is at 17%, while the volatility expectation for crude oil is at 54%. To avoid the psychological impact, here are a few tactics that do not require any additional tools but help massively in making trading accurate and predictive.
- Do not withdraw your money in less than 2 years from the market irrespective of the dips or growths. Suppose you have $5,000 to invest. You may need $2,000 out of that amount for any emergency in the year. In such cases, the worst thing you can do is completely allocate to crypto as here you will end up selling your position at the worst time, even during the cycle bottom. There is also a risk of impairment losses if you proceed to use decentralized finance. Thus a two-year vesting period in crypto is essential.
- Follow the dollar cost average strategy as it can help you buy the same dollar amount every week or month regardless of the market’s fluctuations. Suppose you buy $200 every Monday evening for a year. Here you need not worry about the position often. To sum up, avoid buying all your positions together in less than three or four weeks.
- While conducting analysis, there are different metrics that can interest different indications of the market. The best traders know the importance of picking out only the best indicators. The key is to settle for only one instead of running after five different indicators and making wrong investments.
- During any bad times in the market, step aside for a couple of days. Even if the psychological impact is massive, it is always better to wait, even during a lucrative opportunity. The goal is to stick to it the longest.
- Avoid selling the winners and invest more in those. Hold the most profitable positions in the market, and the returns will be incredible over time.
This investment advice can be helpful in having a better view of the market, especially for beginners. However, the is no right or wrong here. Avoid trusting the influencers for the market as nobody can precisely anticipate the upcoming fall or rise in the market.