For anyone who has done any day trading, there is no worst feeling then hoping on a coin that has great green momentum and it immediately goes into a major sell-off. Well there are a few things you can do to protect yourself from getting caught in this web.
Don't chase: If a coin has already pumped 30-40% in a short time frame, you are better off waiting for the retracement. That is if it is something you want for a medium range trade. Most coins after a flash pump will retrace to a cheaper price due to a number of factors, the primary being profit takers doing what they do. So if you feel you missed the initial rush but feel there is room to grow then wait for it to come down a bit. This can be tricky at times because in crypto nothing is for certain and 40% could just be the beginning of a massive run.
Don't catch the knife: For many, watching an investment you just made sink 10-15% instantly can be gut-wrenching and can cause you to make some irrational decisions. Most commonly that decision would be to bulk sell at a loss as quickly as possible to avoid larger losses. This a lot of times can be costly as coins can rebound and leave you in the dust. Now you either take the loss or you FOMO back in and risk it dumpingg on you again. The best way to avoid this is to buy into coins you actually believe in, so that when hard times arrive you can hold on strong.
In both of these instances, rookies can fall prey to common market manipulation tactics. The key to beating it is to be aware of what you are buying and avoid HYPE at all cost.
Good tips for bear market. Also worth pointing out to take some profits during a bull run - it makes having steady hands easier during a crash.
Yes it does, if ROI is pull-ups out before it crashes you are less likely to panic.
If I am tempted to "catch a falling knife" I generally start small and repeatedly increase my position as the price drops (dollar cost averaging). It can work out well, but be prepared to wait :)
i like to dollar cost average to begin a position or average down a position that is dropping but i have confidence in.
or if i just dont have enough capital on hand to get what i want at once of course.
a great tactic if you are patient. my best positioned holdings are all from this strategy.
Oh that waiting game can become a real pain.
I bought LTC at 154 and sold at 184 which was a good trade but it shot up to 235 because of the LTC Cash news. Sure enough it fell to 189 over the weekend so patience is key for entry.
Patience is very important, discipline as well. Just because the price kept going up doesn't mean you made a mistake. As long as you leave wit a profit be happy.