Volatility is a trader's dream. It also causes ulcers among newer investors. The world of cryptocurrency is filled with people from all over the world who are just learning about financial affairs and markets.
For those who are new, it can be overwhelming.
Many of us did not get introduced to markets through cryptocurrency. We started years before in equities, bonds, or perhaps commodities. While they can go on some wild rides, they are tame compared to cryptocurrency. A 10% decline in the stock market is huge. For crypt, it can happen in 15 minutes.
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This can really overwhelm a new person. Even those of us who are around a while, it is best to remember that nothing goes straight up. The run from $100 to $60,000 in Bitcoin was not without a lot of setbacks along the way. Looking at things on a log chart, it looks rather smooth. Of course, anyone who lived through it knows there were some hard pullbacks (bear markets) along the way.
Therefore, one way to alleviate this is to look at the example set by Bitcoin HODLers. They are getting very close to reaping massive fortunes off their decisions years ago. If Bitcoin reaches the couple hundred thousand level, we will see a number of billionaires created. It will also change the lives of millions of people.
It is easy to guess this is something that everyone wants. However, does one have the internal fortitude to weather the down times. As shown in the above picture, it can often feel like a rollercoaster full of massive drops. Welcome to the cryptocurrency markets.
Of course, this is not isolated here. We see the same things in equities. Everyone says they would have loved to have Amazon stock at $15 or Tesla at $25. Sure, it is easy to look in hindsight.
There is, naturally, a couple questions that arise. The first is would you have bought in at those levels. I remember when people were complaining about people being able to buy STEEM (a number of year ago) at a cheap price when it was well over a dollar. They called those who did "lucky".
When the price dropped down to 20 cents, how many of those people who were launching the accusation were buying? The answer is very few.
If you are going to be successful in markets, buying has to happen at some point. This is the way one fills the bags to enjoy the rewards when the price does run.
Which brings up the second question about the abovementioned equities. Would you have held? This is a crucial step in the process. Sure, everyone loves the price of Ethereum today. Those who bought in at $6 are doing very well if they still have it. The person who sold at $10, while making some money, missed out on a whole lot more.
However one decides to approach things, one of the keys appears to be holding through the down time. Sure, it is nice to time the markets but that is something very few can do successfully. Quality projects should be able to keep rising over time, even though there are temporary setbacks.
If is very difficult to hang onto every tick in the market price. The best approach is to "buy and forget". I do not mean this literally but, rather, monitor what is going on to see if the conditions around the project change. Since this is usually what will end up eventually causing a major run, watch what is taking place there. The market has a way of misjudging just about everything for a certain period of time.
Going with the long-term approach means not having the emotional attachment. In cryptocurrency 50% pullback are commonplace. If we get wound up over it, then we are going to give ourselves ulcers.
And that is not a good thing.
Article by @taskmaster4450le.