Be Prepared For The Crypto Rollercoaster
I get asked all the time, "is trading Cryptocurrencies safe?". I respond back with, "what do you call "Trading?".
Usually the person who has asked me the question really doesn't have a good understanding of what their own version of "Trading" is.
To put it in basic terms, there is really only 2 types of Trading. Sure, there are hundreds of ways to Trade, but they all boil down to 2 main reasons for Trading.
The 1st is "Short Term Trading" also known as Day Trading, and what i call "Pure Gambling". The 2nd is "Long Term" such as Managed Funds or Superannuation.
Where does Cryptocurrencies fit into these 2 groups? Well, it works for both groups. It's you as the investor that needs to decide what type of investor your going to be.
If it's going to be short term, then fine you need to get your mental state ready for the gut wrenching roller coaster that is short term investing. Without doudoubtshort term investing is nothing more than at best, and educated gamble!
Long term investing is at the other end of the spectrum, and I'd suggest if your at all attached to the money you're going to invest, then long term is for you. Why?
Well, Long Term is exactly that, you play the investing game, that's right, it's just a financial game, for the long term. By using a proven investing system a long term player can handle the violent ups and downs of any market. Whether it be Crypto or the Stock Market, a long-term bet is less stock mach churning.
For example, if you had bought Bitcoin when it was at it's all time high, and you're a Short Term Trader, you'd have thrown up more times than a drunken sailor! It's rollercoaster of up's and downs over the past several months would test even the toughest short-term traders.
But, Long Term Traders don't get so flustered or experience that gut churning feeling when the market is volatile. You know as a long term trader that the market is going to go up and down, and over a 1 or 2 or 5 year plan, a few months of volatile action is no big deal.
I'm not advocating either, it's totally up to you what you do as a trader. You must decide yourself how you want to play this game.
For me, I'm too busy to do short term trading, plus I like knowing that the market makes its biggest gains over the long term and anything short term is just a blip in the overall game.
Really, it's bone dry simple, unless you're prepared to lose it all, then don't even bother. You won't have the stomach for it!