If you have been buying crypto for sometime now, then this painful experience is not new to you at all. There are times when you have noticed a good price point to enter the market, and decided to buy, but then, at the very instant when you clicked the button to buy, the price instantly drops, almost like if it were waiting for your action to decrease, making what would have otherwise been a good buy a source of regret and wondering why this is continually happening to you.
Honestly, this has happened to me so many times that I don’t even know how many. Sometimes, it seems like the market actually knows exactly when I want to buy crypto. You might be waiting for some hours to see a good price entry point, and everything stays perfectly calm just before you press the buy button, and as soon as you do, down it goes. Then, you begin to fight yourself as you have bad luck.
Yesterday, thinking about that whole problem from this familiar frustration point of view, I hit on a funny idea that felt like I had finally ‘cracked the market code.’ Of course, before anyone gets too anxious about all of this, let me just say that it's all partially an attempt at humor and half ‘crypto trauma,’ but if you've been buying crypto for any length of time, I'm sure you really understand precisely what I mean about all of this.
The trick is pretty simple. Instead of buying with the first press on the buy button, you put in a small limit order first that is less than the current trading price. Let’s say the price is at about $63,000, and you put in a limit order to buy at $10 at say, $62,500. It’s a price that if it happens, you will be so glad. But we all know that price will never get filled.
And then comes the funny part. Having placed that limit order, you proceed to place your routine order to buy the cryptocurrency at the market price of $63,000. But then, it appears as if the price is not willing to fall any further. The market is seeing your limit order and says, “Nope, not today, friend. You're not getting that kind of discount.”
Of course, that's not how markets really work. Markets aren't interested in targeting our account personally, and they don't give a hoot about our $10 limit order. However, this emotional response to trading is definitely something to share. I've observed that many people share this emotional response to trading, where buying tends to cause a dip, and selling causes a pump.
The thing this really highlights is the psychology aspect of crypto trading. People think the markets move based on liquidity, supply, demand, and many more factors beyond our control, but our timing is just not right almost all the time due to short-term volatility in the markets, of course, entering when we think the momentum is right, and experiencing a natural course of short-term volatility is what we are supposed to do, because we are humans.
This was my ‘market code’ moment, reminding myself not to take things too personally. Instead of blaming myself and the market, I focus on improving my planning, risk management, and patience. Limit orders can be utilized to prevent such immediate price swings when purchasing crypto assets.
One thing I realize about the whole concept of crypto is the truth of the statement, which I only now see, that one can never stop learning. That I have finally cracked the code on the market must be taken as a joke, because the real code is discipline, patience, and the realization that nobody can ever fully time the market.
So, next time you want to buy crypto again, you could give this trick a go as I have explained in this post, but if you find that this trick does not work, then take it as it is, as indeed it is just not an established fact. However, maybe that small limit order could at least put a smile on your face before hitting that buy button.
