As promised in my previous article, let's go over what I am doing to not lose money from my Bitcoin investment while playing around with alt coins.
First of all, you need to understand one simple thing. When you are buying an alt coin, you are buying it with your precious Bitcoin, not your dollars!
Why does this matter?
Let's say you have an alt coin you are looking to buy and its' dollar valuation is $10.00 which today would be approximately 0.0017000 BTC.
You hold the alt coin for a while and it goes up to $20.00. Life is suddenly amazing, you are counting just how much money you made, probably even looking up all the nice things you are going to buy next, when in fact maybe the fact that you bought the alt coin actually made you lose money..
By now you are probably thinking that I am crazy and that in fact, you've made 200% ROI. While true, just bare with me for a while longer.
Let's just imagine that while the alt coin you've purchased has been growing up to the majestic $20.00 valuation Bitcoin has not been idle and actually grew twice as much. This would mean that if you were to sell the alt coin you actually only sell it for 0.0008500 BTC effectively losing you 50% of your money. Yes, you still made 200% ROI but you could have made 400% ROI had you just held onto your Bitcoin.
Does this mean that you should not buy alt coins?
Abso-fucking-lutely not. Alt coins are actually a great way to multiply your Bitcoin. Let me just repeat that last part: To multiply your BITCOIN. You see, what I am doing is that I buy an alt coin, wait for it to go up and then I sell the alt coin for the exact Bitcoin price I bought it for while keeping the rest of the alt coins for free. This might sound strange to you but let me explain what I mean.
I buy 90 tokens of an alt coin for let's say 1 BTC total.
I wait for the tokens' go up to a, let's say, 1.5 BTC valuation
(not caring about its' current dollar valuation).
With its' increased Bitcoin price I now sell 60 tokens for a total of 0.1 BTC.
And there. I now have the initial 1 BTC I had plus 30 free alt coin tokens.
(This way of trading is called scalp trading)
shoutout to my inability to draw silhouettes on a computer
This strategy takes a lot of disciple because when you follow it you actually have to sell the alt coin tokens even if you have a feeling creeping in the back of your head that the alt coin's valuation might go a bit further up.
I think we can all agree that Bitcoin is here to stay for at least a few years and it is the safe coin to hold. And If you can actually get a few alt coin tokens for free while holding your precious Bitcoin then even better.
If you are further interested in this strategy I am following, do stick around. If you liked this article, please up vote it so that it can reach more people and if there's anything that wasn't clear I will gladly answer your question in the comment section bellow.
In my next article I will show you what I am doing to follow this strategy diligently along with an .xsl table I use to keep things simple. After all, markets play to our emotion and it is very hard to stick to one's strategy.