When trading in cryptocurrencies, it is critical to set realistic price targets. The fear of missing out is often a significant factor in swing trading. Using a realistic price target will minimize your risk of getting crushed by the price, but it will require discipline to stick to your plan. For example, if you buy $FTM Fantom at a low price, you’ll make a profit on the way up, and you’ll earn a lot more if you sell at a higher price.
That makes sense right?
But what if you waited too long in order to make a higher profit, and the coin just starts reversing its cycle and keeps dropping and dropping.
Not so much fun right?
The thing is that you don’t want to sell your coins under-priced and lose in the process.
And this is the volatility of the crypto market.
There are many ways to minimize the impact of market volatility. One of the most common ways to mitigate this is to use dollar cost averaging. This means that when Bob buys a bitcoin, he buys it several times over. This strategy only works if the price is red, meaning that it was lower than 24 hours earlier. There are several trading bot services that help you automate this process. All you have to do is deposit funds and tell the bot when to buy or sell.
The Differences Between Crypto Trading and Investing
There are some important differences between crypto trading and investing, including the time horizon. Traders are concerned with day-to-day fluctuations, while investors are more interested in the long-term. Traders use technical analysis to predict future price movements based on historical price data and statistical variables. It involves using tools like trend lines, price patterns, and support and resistance levels to predict price movement. The most basic method of profiting from crypto trading is through price appreciation.
There are numerous advantages to using cryptocurrency as an investment tool. For one, it is easier than ever to get started and makes it possible for anyone with limited experience to benefit from the market. Another advantage is that it can be an excellent way to increase your capital without a high level of knowledge. Although previous experience is advantageous for learning technical analysis and understanding price action, it is not required to begin crypto trading. In addition, cryptocurrencies are an excellent choice for capital growth. Before investing in any cryptocurrency, traders should decide their risk tolerance and determine their overall goals.
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More about crypto at CoinGraf.org