What To Do When Crypto Prices Crash Like Today
Please click the thumbnail image to watch the video on DTube.
Subscribe to my DTube channel and earn cryptocurrency rewards for your best comments at:
Click on a video and then click 'subscribe'.
Today’s episode is brought you to by… KuCoin
https://www.kucoin.com/#/?r=1geMP
If you’ve been having trouble because other exchanges are not accepting new signs up, have a look at KuCoin.
I find their interface very easy to use, they have a full suite of charging tools built in, exclusive coin listings and competitive trading fees.
Story - What to do when markets crash
https://www.coinigy.com/?r=16171fe8
I really don’t like days like today.
Not because I lose money or because prices drop, but because talking about it gets in the way of the more meaningful stuff I want to talk about.
In general I’m a future oriented person. My mind is naturally calibrated to look way down the road at where things are heading.
This is no doubt why I became so attracted to computers when I was a kid, web design and online marketing at the start of my career and then Bitcoin and cryptocurrencies.
Dips in the market are short term events, they are disposable, tomorrow it will be old news, so investing my precious time talking about it just never feels like a good return on investment for me.
Price matters but I’d rather talk about the future of the industry and where the solid projects are heading and how that will ensure long term price increases.
But I’m a special breed, or a freak, whichever way you want to put it.
Plus I’ve largely mastered my emotions when it comes to trading and investing so if it were just me it’s easy to ignore days like this and carry on with my work.
But it’s not just about my, I’m also here to serve, which is why I am going to talk about the short term price movements, even though I don’t want to.
Today I’m going to offer you a strategy which will enable you to take advantage of the opportunities that are afforded on days like today.
You can’t guess the bottom but you can follow a repeatable strategy, and that strategy is called ‘Scaling in’.
This basically means buying in when the price dips and then buying again each time is falls to a new level. This is cost averaging by in the opposite direction to how most people do it.
Dollar cost averaging is where people say “Just buy $10 of Bitcoin every week no matter what.”
That works because some days you buy Bitcoin high, sometimes low, but that consistency means you buy at a better average price over the long term.
Scaling in uses the same principle, but here we are talking in shorter time frames and in the opposite direction, when the price is falling.
Let’s use Dash as an example.
Today Dash opened at $928.
Say our first buy was at $900, say we expect it to bounce off that because its a round number.
Then it falls to $850, we buy the same amount again.
Then it falls to $800, we buy the same amount again.
The same at $750.
Dash hit a low here of $723 then started to turn around.
Those 4 buys work out to an average buy price of $825, so when Dash returns to it’s normal level above $1,000, we got in a very decent price but without having to guess the absolute bottom.
This strategy has the highest probability of success with a large cap coin.
A large cap coin means a large group of people had faith in it before and will likely again.
Even if it’s not a large group of people, at least a large pool of capital got behind it.
Barring any fundamental flaw with the project, those people will likely return once they have confidence.
We know this price drop wasn’t a problem with the Dash project, because the same thing happened on...
The Bitcoin Cash chart
The Bitcoin Chart
The Ethereum Chart
And so on.
In order to follow this strategy you have to a strong belief that:
The cryptocurrency market as a whole is going to recover from the price drops
The specific cryptocurrency you buy is going to recover
And most importantly, this strong belief should not come from blind faith or from anything some random YouTuber says to you, but from your own understanding.
If you don’t understand WHY the price will recover, this strategy is probably not for you.
▶️ DTube
▶️ IPFS
I like how even keel you stay no matter what the market is doing. It is funny see how much panic there is when it drops 20-30%, ignoring the fact last years returns were 10x, 20x, 30x+ for most of the major coins.
Yes - rookie mistakes. These people will either learn or get out of these types of investments.
it is like everything is on sale today, I just wish I have more money to buy, because I am sure the market will comeback, every january we see the same pattern at the bottom, and it allways comes back, I am sure that by the end of the month we will see all time highs once again., it is not the first time a correction like this happens and it will not be the last.
Exactly. It sucks missing out on these sales. Such is life.
HODL is the prophecy
Great advice Chris and I agree that dollar cost averaging is the safest investment strategy to use. Also days like today are the reason why it is so important to never invest more then you are willing to lose, otherwise drops like this can be overly stressful if you aren't willing to take the potential losses.
Good advice.
You're absolutely right. Scaling in is a great thing to do when the market is like this. If I believed in a project when it was running high, I certainly wish to increase my position and scale in when dips like this present themselves!
Its this kind of dips that make the market intresting
the smart increase weath like this
This dip is not timed right for me, dang it. I don't have any fiat to spend! Good luck to the rest of you on your trades.
This factor points out a benefit of being diversified in the market. When there is a general market dip like this, and you have multiple coins, then some pairs might still be attractive trades, even without putting in any new money.
I have multiple coins, but they are all down:(
I just deposited some money into the exchange and will try to use the method of scaling in if the market is still low. Thanks for the good advice.
P.s I love Dash too
Hey man, great video. Really enjoyed it and did basically the same move today myself.
Thanks!
I am a newbie as far as crytocurrency and my son is the one who suggested I make an investment in crypto. But the wise guy that he is told me only to invest as much as I was willing to lose and to hold on tight as there was going to be hills and valleys. Today just happens to be a valley the hill is just around the corner.
You just opened my eyes to a few things I didn't realize before. Thank you.