This could put extra money in your pocket
Photo by Bermix Studio on Unsplash
Bitcoin is quietly making noise in 2020 as all eyes have been on the coronavirus, stock market crash, and the presidential elections in November 2020.
Bitcoin crossed $10,000 in July and the bulls are trying to push for higher gains as the bears are selling any chance they get. This constant tug of war may make you change your investing perspective.
You possibly try to time the market and buy Bitcoin any chance you can get.
When you trade, you may use chart analysis or Fibonacci retracement as you execute your trade.
Sitting back and watching the fast movement of Bitcoin and other cryptocurrencies, this makes one think that maybe you are doing something wrong.
If we remember, 15 years ago if you were doing anything on the internet you were going to make millions. I think it could be the same with Bitcoin.
Jared Kenna, TradeHill CEO
Some people have made this mistake many times and you won’t hear too many people mention this out loud. Deep down, many traders are probably thinking about this every time this happens.
People, in general, have a habit of going all-in when they make their trades. When you do this, it leaves you exposed to further downside in the Bitcoin market and leaving you with no currency to buy additional Bitcoin.
You see this with traders in stocks and flippers in real estate investing. Many times, you don’t know 100% what direction the market is going. The market can suddenly turn and leave you without any money to buy more investible assets.
Maybe you think the market has reached its limit and then you decide to go all-in on Bitcoin. If you’ve followed Bitcoin for the past year, you have seen this crypto jump $1000 or drop $1000 in a few minutes.
What do you at this point after you have used all your fiat currency making your last trade?
You’re probably scrambling and looking for extra cash because you really want to buy more Bitcoin since it reached another low.
I will admit, I have made the same mistake before. This happened recently as I sold some cryptocurrencies after the recent rise. As my money was held up from the recent trade, I couldn’t buy anything else as the cryptocurrency market continued to fall from its recent gains.
A dip is a beautiful red rose, when you touch it you have the chance to multiply your portfolio.
Adopting this idea may keep some extra funds available when you trade in the future. Instead of going all-in on Bitcoin or another cryptocurrency, use 50% to 75% instead. If Bitcoin drops further, you’ll have money available to make another buy.
This takes a lot of discipline. There is always the chance that Bitcoin doesn’t fall any lower. Based on the numerous times the crypto market has moved this year, I think you’ll see the market move in your favor. The hardest part will be waiting until you see your target price. This can be excruciating and painful but if you are patient, it will be well worth it.
Some other traits you’ll need:
- Calm and cool
Many traders use different methods. Do you have any trading ideas you use often?
Tom Handy is a top Writing, Finance, Investment, and Bitcoin writer on Medium, and the father of two kids. He retired from the Army and sits on several non-profit boards. You can find him on Twitter @tomhandy1.
This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any significant financial decisions.