How I make money with Crypto (Part 2 Trading in a market downtrend)
In my first post I listed the different ways in which I make money within the crypto space. However, I didn’t go into too much detail on how I do it. In this post I will go into further detail on point 4 of my post which is trading the top 10 cryptos against BTC.
The reason that I only trade the top 10 crypto coins is because of the method that I use. I need stable coins which won't fall through and I also need them to be volatile.
I am sure all of you reading this have heard the saying “Buy low sell high”? Well I kind of threw this out of the window in a way and I make more of my money when the market is going down. I have heard many people struggle with this kind of trading and many people don’t have the patience for this type of trading.
My way of trading is 40% Mathematics, 40% psychology & 20% guts. The 20% is important though, as you need to believe in the formula for it to work.
So as you can see, this is a fake graph that I have drawn and yours won’t have the A,B,C or $ amounts. However, I do want to show you this to explain my method. Because as you can see, money doesn't go straight down they go up and down but it is still going in a downward motion.
The orange lines are resistance lines, which means this is where we think the coins will bounce either up or down it doesn't matter which way.
So there are two methods you can use to ensure that you are profitable: there is 1. Downtrend and 2. 50/50. I use both of these methods at different times and I will explain them both to you.
Method 1. Downtrend
Let’s say that we buy 1 coin for $7 when it first hits $7 and then it goes down and doesn’t hit $8 for a long time. We don’t really want to wait holding this bag until it hits $8 because it may never hit $8 again so this is where the formula comes in.
When it goes down and hits $6, we now need to buy two coins as everytime we go down one resistance level we buy double the amount of coins we are already holding. So we have three coins in total now and we have spent $19, so now when it bounces back up to $7 we sell out. We have made a profit as 3 X $7 = $21.
Now if it keeps going down, we need to see what profit we can make. So this time, we buy one coin at $10 and then we buy double the amount of coins on every resistance line on the way down. $10 - 1 coin, $9 - 2 coins, $8 - 3 coins, $7 - 6 coins, $6 - 12 coins. We now have 24 coins and we have spent $166 going all the way to the bottom.
Now instead of having to go all the way back up to the top, we only need one bounce. We will sell at the $7 mark because we got one bounce 7 X 24 = 168. So we have made $2 profit. Now it is not a huge profit going all the way down, however you can use the triple up rather than double up which makes you more profit or even 4x up, it really depends on how much you are willing to spend.
Method 2. 50/50
Let’s say that you buy one coin at F, which is $6. If we go down to $5, we do the double up method again, but when we go back up we don’t sell all of the coins, we just sell and keep the profit in the coin that we are holding. Now if it goes up again, we sell 50%, or 25% if you want, depending on how high you feel the market will go and then just keep buying when it goes down one and selling when it goes up. When it goes down, DO NOT sell. This is when you lose money, you just have to believe that there will be a bounce up at some point. You can always profit from a trade, even if it’s a small profit.
With the excess coins that you keep, you just want to keep them for a big jump in price for a bigger payday. This is how a lot of trade bots are set up to make money, so it does work you just need patience.
I hope that I have taught you something but please remember, I am not a financial advisor and this is not financial advice. Trade at your own risk and I hope that you are always profitable.