by Most investors hate a bearish market as it diminishes the value of the portfolio of people made with a number of sizeable investments over the period but it is all our point of view that makes a proposition good or bad. The same is the case with the bearish market where investors want a fall at their own desired prices so that they can purchase as much commodity (coins) as they like.
Similar to any other notorious phenomenon a bearish cryptocurrency market has its own teachings for those who came here not only to make money but also a curiosity to learn. In fact, Blockchain Believers should not take lightly some of these lessons for traders in a bear Market.
Lessons for Traders in a Bear Market
Averaging out is the key
If you are someone who is copying the style of investors (the real ones) then you might see bloodshed in your portfolio. Why? Because they are people with huge experience (or a number of people to do it for them) who invest a sizeable amount in a particular opportunity and forget for some years to get supernormal Returns.
Unfortunately, you are either short in terms of experience or money or even both. So, ‘buy at dips and sell for marginal profits’ is the best suggestion for anyone with not-so-good capital size and a lack of Crypto knowledge. It will give you not-so-fancy returns but will minimize the chances of losses for sure.
Keep Booking profits
A short-lived upward movement creates a point where greed overplays the wisdom and instead of making money, people lose their investment. Sentiments do not allow you to sell at small profits and that’s where you are on a ‘road to red’. So, if you are a trader then by the time you enter the market fix your profit target, and no matter what click the Sell Button at the predetermined point.
Sentiments and Trading do not mix well.
Holding is always not profitable
Barring some good projects with good marketing and real use cases, there are a lot of coins in the crypto space that made people bankrupt in the past. In the past bearish Seasons (and also the present one) it has been seen that some altcoins couldn’t recover and became dead as either the developer shut down the project or they become insolvent (recently ethereum classic) to run the project further.
So, if you are not someone capable to bear huge losses it’s better to make profits and wait for the next opportunity to enter the market. Repeat it every time as there will be opportunities.
Do not try catching all the dips regularly
It is practically impossible for a human to catch all the dips associated with the coin(s). By the time you decide to play with the market fix your targets in numbers along with the money.
By the time you manage to achieve them just close the portal and give the time to other things as well. Life is not all about trading in cryptocurrencies and making money. Understanding it is very important if you are here to stay long at this place.
Avoid buying When Everything is unexpectedly green in the market for a while
Some people call it a ‘Bull trap‘ as ‘you can miss the train‘ philosophy is in the play here but if the experienced (the real ones) are to be believed then the bullish market is always followed by a correction where upto 20% devaluation in prices can be expected.
So, do not get hunted by the FOMO, especially in a hyped bullish scenario. In the cryptocurrency market, there are a good number of chances that the prices fall so sharply that you do not even find a chance to set the selling price and click the button.
If you are somebody who entered the market recently then these lessons for traders in a Bear Market will be quite helpful for you.
Your article helped me a lot, is there any more related content? Thanks!