0%
The Secrets to Flourishing in a Bear Market
#Cryptocurrency#cryptohopper#Bot trading+2 meer tags

The Secrets to Flourishing in a Bear Market

Historically, on average, every 3 years, there is a crypto bear market that lasts around 12 months. Bear markets are normal, but they are less frequent than bull markets. For example, two of the worst bear markets in Bitcoin's history happened in 2014 and 2017, which lasted 59 weeks respectively 52 weeks.

HODL Cryptocurrency

Crypto bear markets are painful to digest, but if you believe in blockchain technology and its potential to disrupt many industries, there is one simple and effective strategy – aka HODLing.

Another more effective strategy is Dollar Cost Averaging, but we will get to this later.

HODLing has proven to be the most profitable strategy, yielding massive long-term gains. In simple terms, HODL is an acronym for "hold on for dear life" and refers to the practice of buying a cryptocurrency and holding it, refusing to sell regardless of the market conditions.

Sometimes, the best investing strategy is to sit on your hands and let the market do its thing because timing the market is almost impossible. Most of the time, investors are either too soon or too late.

As a final thought, make sure you're only HODLing only crypto projects that are sound and have real applicability with the potential to revolutionize the world.

HODLing with Bots (DCA)

An even better alternative is to hold while using trading bots. But is this even possible, you may ask? Yes, it is with DCA!

DCA stands for Dollar Cost Averaging, and it involves entering into a position and then continuing to buy as it heads lower, thus bringing your average purchase price down.

For example, let's say you bought 0.05 BTC at $50,000. The price then falls to $45,000, and then you triple down on your investment, buying 0.1 BTC, thus bringing your average price down to (($50,000*1)+($45,000*2))/3 = $46,666. The price then continues to fall $40,000 where you again tripple down, bringing your average price to (($50,000*1)+($45,000*2)+($40,000*6))/9 = $42,222.

In this case, you could have made a profit when Bitcoin rebounded to almost $45,000. On Cryptohopper, we offer an advanced DCA where you can customize what percentage of your funds you want to use with which DCA and at what levels. You can even manually DCA on a position whenever you want.

DCA Advanced Tips

When using DCA, it is critical to only invest in coins that you are confident will go up again and have proven it in the past, such as Bitcoin and Ethereum.

Conversely, you should be very careful not to use DCA on crypto currencies you are not 100% confident with, as you risk losing all of your funds.

What is essential to keep in mind regarding DCA is that you should allocate your funds very well. For example, if you plan on doing DCA four times, you should calculate your initial position size based on this so that you still have funds for the remaining 4 DCAs.

If you plan on tripling down and doing 4 DCAs, your initial position can be no more than 1.23% of your account as can be seen below:

  • Initial position = 1.23%

  • 1, 2*current position = 2.46%

  • 2, 2*current position = 7.38%

  • 3, 2*current position = 22.14%

  • 4, 2*current position = 66.42%

  • Total = 99.63%

As you can see, if you had entered with more than 1.23% of your total account, you wouldn't have enough money to cover all DCAs. If you use more coins, this value would obviously be even lower.

Other Bear Market Tools

To leverage your trading during a bear market, Cryptohopper also offers many other features, such as Trailing Stop Loss, Trailing Take Profit, and Take Profit at a Profit, that can help you protect your profits.

Trailing Stop Loss works by moving your Stop Loss along with the price. For example, let's say you buy 0.1 BTC at $45,000 with a Stop Loss at $41,000. If the price goes to $49,000, your Stop Loss will automatically move to $45,000. Take Profit at a Profit works similarly but for your Take Profit.

The Trailing Take Profit feature moves your Take Profit along with the price. For example, let's say you buy 0.1 BTC at $45,000 with a Take Profit at $55,000. If the price goes to $49,000, your Take Profit will automatically move to $53,000.

Bottom Line: DCA is a powerful tool that can lead to great results when used correctly. To get the most benefits out of this tool, you should only use it on worthy cryptocurrencies that have proven themselves and calculate the initial position size so that you have enough funds for all DCA entries.

Inbox afbeelding

Nieuwsbrief

Krijg wekelijks een e-mail met exclusieve crypto-analyses en nieuws dat de moeite waard is om te lezen. Blijf op de hoogte, helemaal gratis.

Automatiseer
je
trading!

Geautomatiseerde crypto trading bot van wereldklasse

Laten we beginnen
Automatiseer je handel

Verwante artikelen

Bot Trading 101 | How To Apply a Scalping Strategy
#Automated trading strategy#Strategy designer#EMA+3 meer tags

Bot Trading 101 | How To Apply a Scalping Strategy

Cryptocurrencies | BTC vs. USDT As Quote Currency
#Bitcoin#crypto trading#crypto trading tips+2 meer tags

Cryptocurrencies | BTC vs. USDT As Quote Currency

Technical Analysis 101 | What Are the 4 Types of Trading Indicators?

Technical Analysis 101 | What Are the 4 Types of Trading Indicators?

Bot Trading 101 | The 9 Best Trading Bot Tips of 2023
#crypto trading#trading bot#crypto trading tips+2 meer tags

Bot Trading 101 | The 9 Best Trading Bot Tips of 2023

Begin gratis te handelen met Cryptohopper!

Gratis te gebruiken - geen creditcard nodig

Laten we beginnen
Cryptohopper appCryptohopper app

Disclaimer: Cryptohopper is geen gereguleerde entiteit. De handel in cryptocurrency bots brengt aanzienlijke risico's met zich mee en in het verleden behaalde resultaten bieden geen garantie voor de toekomst. De winsten getoond in product screenshots zijn voor illustratieve doeleinden en kunnen overdreven zijn. Doe alleen aan bothandel als u over voldoende kennis beschikt of vraag advies aan een gekwalificeerd financieel adviseur. In geen geval aanvaardt Cryptohopper enige aansprakelijkheid jegens enige persoon of entiteit voor (a) enig verlies of schade, geheel of gedeeltelijk, veroorzaakt door, voortvloeiend uit of in verband met transacties met onze software of (b) enige directe, indirecte, speciale, gevolg- of incidentele schade. Houd er rekening mee dat de inhoud die beschikbaar is op het Cryptohopper sociale handelsplatform is gegenereerd door leden van de Cryptohopper gemeenschap en geen advies of aanbevelingen van Cryptohopper of namens haar vormt. Winsten getoond op de Marktplaats zijn niet indicatief voor toekomstige resultaten. Door gebruik te maken van de diensten van Cryptohopper, erkent en aanvaardt u de inherente risico's die betrokken zijn bij de handel in cryptocurrency en gaat u ermee akkoord Cryptohopper te vrijwaren van eventuele aansprakelijkheden of opgelopen verliezen. Het is essentieel om onze Servicevoorwaarden en Risicobeleid te lezen en te begrijpen voordat u onze software gebruikt of deelneemt aan handelsactiviteiten. Raadpleeg juridische en financiële professionals voor persoonlijk advies op basis van uw specifieke omstandigheden.

©2017 - 2024 Copyright door Cryptohopper™ - Alle rechten voorbehouden.