The cryptocurrency leader is coming out of his worst second quarter in history.
Bitcoin has just finished its worst quarter in its history. After a stellar start to the year, the cryptocurrency leader saw a 40% drop. Here are 10 commands to help you invest without losing everything.
Michael Sincere (trader and MarketWatch columnist) carved in marble the 10 rules to keep in mind when investing with bitcoin.
Here are the ten rules to keep in mind
- Match by match. Keep in mind that you need to start investing slowly. Instead of investing $ 1.000 in bitcoin or any other trendy cryptocurrency, start with $ 200. If things go well, you can increase your stake to $ 1.000.
- The art of selling and buying. This advice comes from the creators of "buy on the dips". It is about buying volatile assets when they go down and then selling them when they go up a lot. These types of assets are not for the greedy because you could lose everything.
- Cold mind. Before increasing your stakes, start with a small profit. While many people have made millions with bitcoins, others have lost large sums of money, just like lottery winners.
- Avoid making margin calls. One tip for investing in bitcoins is not to borrow money. This is called leverage. It's a double-edged sword. If you hit it you can win a lot. But if you get it wrong, you could end up in debt more than the money you invested. To invest, just use platforms like Bitcoin Revolution, you need to register and follow the instructions to start investing.
- Stop losses should be taken very seriously. Some brokers will not allow you to set “hard” stop losses because bitcoin is volatile. It is a good idea to create a series of mental stop losses and then follow them.
- Don't hold back your losses. To prevent a small loss from becoming larger, you can sell at least half or all of your position.
- Plan. As mentioned in point 6, it is essential to have a plan that covers the long, medium and short term. We may decide to sell only part of our position if they are not doing well, hoping that the trend will change. This is similar to what happened to those who sold for $ 20.000 just before they shot up and went up to $ 60.000.
- Check out the technical analysis. This discipline provides you with signals and clues to help you decide when to enter or exit a stock or asset, particularly in a complex transaction like bitcoin.
- Diversify. Don't put all your eggs in one basket. Even less so if it is an asset that can go up by 20% every time it goes down by 40%.
- You should practice before investing in the real world. Create a dummy account to simulate the investment experience before investing with real money. Rule number 3 is the best option.