So look folks, I do a lot of research and go through a ton of ideas and charts on Trading View, Facebook, and Youtube. Often times it helps me spark ideas (and sometimes I see a chart or an idea that I absolutely love!). The issue that I have been having is I see way too many people trying to predict the bottom for
BTCUSD
. This is totally fine when you are a more experienced investor, but I think it really hurts all of the beginners out there.
We ingrain into people's minds that they HAVE to buy in at this one price. Let me tell you a secret: No one is picking the bottom! So many factors go into price movement and as much as we want to be perfect, we probably won't be. Have you ever bought in and had the price go down immediately? Have you ever sold and had the price skyrocket? It probably kills your trading confidence and you will probably keep killing that confidence if you don't change something.
So I hope at this point I have killed our your trading dreams but don't worry because I am going to teach you something today that will give you a new perspective on trading (so you don't have to be perfect).
(I know this goes against my "Perfect Trader" posts but these are both valuable mindsets that you must have)
Educated Dollar Cost Averaging
Dollar cost averaging is a pretty simple process. Split up your buy-ins so that you can get the best average buy price (without making one large bet). So instead of going all in at $6000, you split it up between 6500, 6200, 6000, and 5800. This would average out to 6125 and it would give you the peace of mind knowing you did not just make a big bet that could end poorly.
I added the word "educated" to the front of DCA because most people do not do this in an intelligent manner. They just simply keep buying the lower and lower a coin gets and all it is doing it making you lose more money. You have to be investing in fundamentally strong coins. If not, say goodbye to your hard earned cash. So here is my process for this:
1. Find Fundamentally Strong Coins to Invest In
How do you do this? I will dedicate an entire post to this in the near future so watch for that. If you don't know how to do this, stick to trading
BTCUSD
in these bearish markets. Everyone will have their own opinions on this but I see
BTCUSD
as the strongest coin out there. It drives the market. So nothing is going to move until
BTCUSD
moves.
Low-End Buy-Ins
2. Find the future support levels!
This is fairly simple. Use everything that you have learned to pick a 1-3 support levels (the number of buy-ins is going to depend on your confidence. If you think you know what you are doing, you can do less. If you want to protect yourself, do more). These are going to be your buy-in levels. I also suggest picking long-term support levels because they are going to be more important. Don't go on a 30 min chart and pick support levels that are $50 away.
High-End Buy-Ins
3. You can use indicators/moving averages!
Although support levels are awesome, there are other powerful indicators that you can use. The key here is you do not want to miss out on a situation so using moving averages you can reverse engineer a winning plan. If you find that the 239-hour EMA predicted the bounces the best, then you can use that as another buy-in point. The key thing to understand here is that these buy-in points are going to be much higher than support levels. They are going to trigger on bullish movement.
Since you are not going to be perfect, you can pick out 1-3 of these high-end buy-ins and these will be key indicators to get back into the market in case your support levels never hit!
My key is to help protect you in both scenarios. If you are just predicting the price to go down, you probably won't be 100% right. So having these bullish buy-ins will help keep you confident!
Now some people will disagree with me hear but I think you should set all of these things up ahead of time. Put in your stop-limit orders for the support level buy-ins and put alerts for the moving average/indicator buy-ins. Doing it ahead of time takes the emotion out of trading and will exponentially increasing your trading confidence.
I hope you enjoyed today's article! If you did, make sure to give it a thumbs up and throw me a comment. I love hearing from all of you!
Cheers!
BTCUSD
. This is totally fine when you are a more experienced investor, but I think it really hurts all of the beginners out there. We ingrain into people's minds that they HAVE to buy in at this one price. Let me tell you a secret: No one is picking the bottom! So many factors go into price movement and as much as we want to be perfect, we probably won't be. Have you ever bought in and had the price go down immediately? Have you ever sold and had the price skyrocket? It probably kills your trading confidence and you will probably keep killing that confidence if you don't change something.
So I hope at this point I have killed our your trading dreams but don't worry because I am going to teach you something today that will give you a new perspective on trading (so you don't have to be perfect).
(I know this goes against my "Perfect Trader" posts but these are both valuable mindsets that you must have)
Educated Dollar Cost Averaging
Dollar cost averaging is a pretty simple process. Split up your buy-ins so that you can get the best average buy price (without making one large bet). So instead of going all in at $6000, you split it up between 6500, 6200, 6000, and 5800. This would average out to 6125 and it would give you the peace of mind knowing you did not just make a big bet that could end poorly.
I added the word "educated" to the front of DCA because most people do not do this in an intelligent manner. They just simply keep buying the lower and lower a coin gets and all it is doing it making you lose more money. You have to be investing in fundamentally strong coins. If not, say goodbye to your hard earned cash. So here is my process for this:
1. Find Fundamentally Strong Coins to Invest In
How do you do this? I will dedicate an entire post to this in the near future so watch for that. If you don't know how to do this, stick to trading
BTCUSD
in these bearish markets. Everyone will have their own opinions on this but I see
BTCUSD
as the strongest coin out there. It drives the market. So nothing is going to move until
BTCUSD
moves. Low-End Buy-Ins
2. Find the future support levels!
This is fairly simple. Use everything that you have learned to pick a 1-3 support levels (the number of buy-ins is going to depend on your confidence. If you think you know what you are doing, you can do less. If you want to protect yourself, do more). These are going to be your buy-in levels. I also suggest picking long-term support levels because they are going to be more important. Don't go on a 30 min chart and pick support levels that are $50 away.
High-End Buy-Ins
3. You can use indicators/moving averages!
Although support levels are awesome, there are other powerful indicators that you can use. The key here is you do not want to miss out on a situation so using moving averages you can reverse engineer a winning plan. If you find that the 239-hour EMA predicted the bounces the best, then you can use that as another buy-in point. The key thing to understand here is that these buy-in points are going to be much higher than support levels. They are going to trigger on bullish movement.
Since you are not going to be perfect, you can pick out 1-3 of these high-end buy-ins and these will be key indicators to get back into the market in case your support levels never hit!
My key is to help protect you in both scenarios. If you are just predicting the price to go down, you probably won't be 100% right. So having these bullish buy-ins will help keep you confident!
Now some people will disagree with me hear but I think you should set all of these things up ahead of time. Put in your stop-limit orders for the support level buy-ins and put alerts for the moving average/indicator buy-ins. Doing it ahead of time takes the emotion out of trading and will exponentially increasing your trading confidence.
I hope you enjoyed today's article! If you did, make sure to give it a thumbs up and throw me a comment. I love hearing from all of you!
Cheers!
