Mind Over Markets

And use them.
You’ve got to prep the mind for trading crypto. While it is not for the faint of heart, it can be learnt. One of the very first steps for an aspiring investor and/or trader is to figure which strategy is going to work best for you and when. To help with that, you ought to take an honest inventory of your situation first.

How much time can you give?

Consider, for instance, how much time you can consistently give to the effort. If you have a full-time day job, for example, you may realistic have not more than 30 minutes per day or a few hours per week to read up on crypto news and commentary, familiarize yourself with technical analysis, peruse the various charts, and ponder the probabilities of your moves. If, on top of a job, you also have family who asks for your attention, you will not have much time at all.

The long-term, buy-and-hold strategy might be your best choice of a strategy.

If, on the other hand, you can push it a little, perhaps moonlighting or trading as a hobby, you may consider position or swing trading as well.

How much money do you need/want to make?

Are you a Millennial trying to build your retirement nest? The long-term, buy-and-hold strategy might be your best choice of a strategy.

Are you semi-retired or simply have some time at hand and want to make some more money each month? You may consider position or swing trading.

Are there no good jobs in your neighborhood, but access to a reliable Internet connection? Try day trading to support yourself.

How much money can you afford to risk?

Investing in or trading cryptocurrencies is riskier than, say, the regular stock market. So, wise men recommend that a newbie or beginner does not risk more money than he or she can afford to lose without having to change lifestyle. “It is better to be safe than sorry,” some say.

But then again, taking risks is what humans do. Younger folks typically do not have a lot of money to spare. Does it make sense for them to risk $500, perhaps to just have “skin in the game” and learn to tolerate real losing and gaining a little? Sure. Swing trading might be an entertaining and rewarding experience, laying the foundation for more concerted investing and trading future for such a person.

$10,000 is a lot more money, a huge sum for many and a drop in the bucket for others. In any case, this amount is enough to be split between position and swing trading strategies. A trader may have $8,000 in long positions for a few months or so, and use $2,000 for a little swing trading during the week.

What do you do with $250,000 or more as a newbie or beginner? Call me! Seriously, if you have that much money to work with, you would most likely not be a newbie or beginner. But if you are, by all means, contact me.

How much self-discipline can you muster?

Trading successfully requires deliberate action and will not happen based on instinctual behavior.

It takes a considerable amount of self-discipline to swing-trade daily or weekly on shorter-term price movements. Of course, if you are a real crypto enthusiast and trading is your new-found hobby, you might have it all. Perhaps you do and position or swing trading is right for you.

But if you get into investing and/or trading as a necessity, all without having enough love for it, stick with the long-term, buy-and-hold strategy or perhaps position trading.

Adaptable and got some talent?

Got talent?
Well, why not be ready to employ any and all of the afore-mentioned strategies depending on what the market is giving you or asking for? If Bitcoin is clearly in a confirmed uptrend, be ready to employ position trading. If bitcoin is ranging with high volatility, be opportune and employ swing trading to make some gains.

Yes, I mentioned the long-term, buy-and-hold strategy as a choice of a strategy. However, the crypto market is still so new and volatile that, for all practical reasons, the long-term, buy-and-hold-and-forget strategy is not a proper fit for some time.

Day trading is just too demanding as it nearly is a full-time job, and scalping about the craziest thing I would do as a beginner. So, really, that leaves us with position and swing trading of cryptocurrencies as our strategies of choice.

There you have it.

Which strategies work best for you?

Strategy #1: Long-term buy-and-hold strategy.

The buy-and-hold-and-forget strategy arises from a mindset that accepts that price movements over the long term will outweigh the price movements in the short term and, as such, that short-term movements may be ignored.

That is the strategy typically employed by many smart folks in their 401(K) plan.

Why do I still mention the long-term buy-and-hold strategy here if it seems not suitable for cryptocurrencies? Well, perhaps one day it will be.


Strategy #2: Active trading.

Active trading is the act of buying and selling securities based on short- or intermediate-term movements to profit from the price movements on a corresponding chart. Active traders believe that short- or intermediate-term movements and capturing the market trend are where the profits are made.

There are various methods used to accomplish an active trading strategy, each with appropriate market environments and risks inherent in the strategy: day trading, position trading, swing trading, and scalping.

Again, the crypto market is a psychological battleground and active trading is much like a mind game and therefore not for the faint of heart. Active traders use market indicators and technical analysis as tools to navigate these sometimes “choppy waters.” When executed with a plan (strategy), active trading can be very rewarding.

Position and swing are the strategies this site is focused on. Day trading and scalping are activities way too busy or fast for us.

Market Indicators
Chart Patterns
Candlestick Patterns