Yesterday I gave a presentation on the potentials of blockchain technology in the investment and industry sector. Of course I was asked my opinion too. When would be the best time to get in on Bitcoin and HODL hard?
I'd love to tell you that right now is the best opportunity. But it's not. The reason here is that the markets, overall, still go down. I'm watching the overall market cap every day, and while we have some green days (What a pun…), we do not have consistent enough green on most coins, that it would be worth investing. Right now I'd only recommend for advanced and intermediately skilled traders to get in. Get in, take 5-10% profit, get out. If anything, be quick. That's not a skill beginners have.
The market is still bearish, and people complain about the seas of red every time the markets drop another 20%:
- Red , Red n Red on charts by
- Ethereum Analysis - Top Down Approach by
- Steem's Selloff Accelerates - Where Will Be the Bottom? by
- Head and Shoulders for Bitcoin headed South far or Resistance at $2250? by everydaycitizen
These are taken from the new section of /trading. This means that most have been posted only in the last hour.
I take part in some of the "crypto calls" groups as well. There are also many that have been telling their users to HODL (Hold On for Dear Life) on their holdings. I suspect this is partly due their own wishful thinking. I tried following this advice last month, and such advice is dangerous and plain stupid. Read about my experience was here: Trading Tips: What A Month Of Waiting It Out Taught Me.
If I'd still follow their advice, most of my holding would now be down about 50-60%, rather than 20%. I wrote about the psychology of holding here: How to Get Over the Fear of Losing Money Trading Crypto. It's fear and wishful thinking that keeps people holding on to a losing position. The gist is this, when you watch something drop 20%, it has to climb 25% to be profitable again. This makes HODL'ing so dangerous.
There is absolutely no guarantee that a stock will ever come back. In fact, waiting to break even - the point at which profit equals losses - can seriously erode your returns.
The thing is, it's painful to watch our stock drop. But it's even more painful to watch it vanish. It's better to cut losses quick, when it's still less painful, and try to win other positions. In an overall bear market, this is tough. We don't get the 20-40% gains easily anymore. It's more like 5-10% – if you're lucky. So cutting losses needs to be even quicker, and more mechanical now than it used. When the overall market trend was ?, you could bet that in one day or two, your coins would reach the sell limit – just by pure coincidence. Right now it might not hit that target at all, and if it does, you have to HODL for weeks, rather than a couple days.
My recommendation would be, if you really want to get in: try to find coins that have power left, and an overall upwards trend. This has been true when the overall market direction was up, and it is now still true. Try to find weak spots, and capture a position. Don't be greedy on your take profit – 10% is a lot, 5% is often easy. If things don't work out, sell. (Maybe use a stop loss -7% below entry.)
To clarify: I don't want to sound negative. I am, overall, bullish on the overall crypto market. What I do want to say is that you shouldn't follow advice like "if you HODL, all things are going to work out, because the market is going to go bullish after the downtrend has ended". If you invest now, and want to trade, trade with what you got. And what we've got is this: ?.
I read in one of the better crypto calls groups a recommendation that I find particularly good: don't trade right now. Instead of using your time to trade, use your time to learn how to trade. I have a trading tutorial, and lots of crypto related videos on my YouTube channel. I'm not saying they are helpful in this case, but I hope you understand that I'd like you to check these out!
Good luck everyone!