Today we're finally going to start putting all the pieces together and thinking about what trading strategies look like. The only sure way to absolutely lose money in this business is to trade impulsively and without a plan. The only way to survive the bubbles, the pump and dumps, and the volatility of any market is to have a good strategy and the discipline to stick to that strategy when things start to get a little crazy. These last two weeks have been huge in the cryptocurrency world, with prices skyrocketing across the board I saw so many people asking things like is now the time to sell, is it about to crash or is it too late to buy in. These are people without a strategy in place because having a strategy means none of that matters, the price of anything should never tell you when to buy or sell.
Your strategy tells you when to buy and sell, your strategy determines not just when to enter a position but perhaps even more important than that, it determines when to exit a position. It also helps you determine your risk reward ratio which in turn advises your position sizes. All of these things need to be planned out in advance before you even start looking for positions to take. Now let me make one thing clear trading strategies don't have to be overly complicated with investments in cryptocurrency, I'm using this strategy called buy and hold, I bought into an assortment of currencies and I don't intend on ever selling unless my family has a dire financial crisis.
You want to these investments as you would treat a retirement account so planning to never exit is a strategy. When I buy in I have a clear plan for the exit never, unless a family financial emergency occurs, that's a plan. Also have a percentage of cryptocurrencies that you invest and day trade with, that strategy involves multiple indicators, calculated risk, reward ratios and all kinds of advanced technical analysis but it still comes down to sticking to the rules of that strategy and following them without exception. Both simple and advanced strategies require discipline, and that's the only way to make money in any of those cryptocurrency markets.
The coming weeks I'll be getting deeper into the specifics of how to develop a strategy but at the end of the day it comes down to what works for you, so I encourage you to now start thinking about it. Now in developing your own strategy think about things like, how often do you want you want to be trading, do you want to sit in front of your computer screen all day. Part of your strategy could then be looking at the 15 minute charts instead of the one day charts. Are you the type of person that will be incredibly stressed anytime you have an active trade in the markets, if then you should close any open positions before bedtime so you can actually get some sleep at night.
Also any winning strategy is going to have a lot of plans for how to deal with loss, are you the type of person that's going to try to double down on a loss. I know you're all wanting me just to get to the point and tell you what strategy that will make you money but unfortunately I'm not going to do that in this post, sorry this is just the intro into trading strategies. So start thinking about all those factors I mentioned and in future blogs I'll show you how to quantify those values and make some use of it.
