Understanding The Fundamentals Of Cryptocurrency
Two Indicators to Buy or Sell Cryptocurrency
At CCi, one of our guiding principles is helping investors go from being a “hope” investor to a “true-value” investor.
How you execute your plan to become that true-value investor comes down to discipline and knowing what to look out for along the journey. No one knows for certain what the future holds but you can try and put the odds in your favor.
Let’s look at some indicators that you can use to your advantage.
1. Technical Indicators And Events Outside Of Your Control
Descending Triangle, falling wedge, golden cross, Bart Simpson formation…
For experienced traders, technical indicators are used to assess where the market sits and to predict where it could go next, but for a true value investor, TA is just noise. Best to keep it simple.
What To Look For?
If you can, look to identify a clear trend or market cycle. Has the market been on a parabolic tear, or has there been a 90% correction from all-time highs?
Each investor is unique in their aims but there will come a time when you’ll want to liquidate your position according to a long-term, or short-term strategy. We guide our clients through an action plan so that when decision day comes, you’ll be confident that emotion won’t get in the way of capitalizing at the finish line.
We are especially attuned to providing help in this area because we saw so many people getting caught in the bubble of late 2017 — it was painful to watch investors being sucked-in on the bull market’s last gulp of oxygen. If you back yourself with a base knowledge of market psychology and implement a sound investment strategy, hard financial mistakes can be avoided.
There are hundreds of indicators that skilled traders use in crypto markets, and a great place to experiment with charts and indicators through the lens of Technical Analysis is www.Tradingview.com, and it’s free!
· Global Macro Events And POTUS’s Twitter Feed
There is a multitude of geopolitical and global events that could have rippling effects on the crypto space for better or for worse — it is impossible to say. Scenarios to pay attention to might be a crackdown on crypto purchases by governments, a quick conclusion to the Trade War, or a full-scale war in the Middle East.
Donald Trump is an economic president and he’s sensitive to be the man who can keep the economy strong, but news that he is facing impeachment could have a far-ranging effect on global markets, and whether it’s good or bad for crypto remains to be seen. Regardless, his Twitter feed could give us forewarning of shifting sands inside the White House toward digital assets — and as silly as it sounds, we can’t underestimate the impact that a negative tweet could have on the speculative crypto market.
Noise from the WH might also signal legislation in other western countries so we always have an ear to the ground in this respect. We will always look to preserve capital through volatility, and we want to ensure you have all the tools and advice to be confident in your ongoing strategy.
2. Market Psychology
Get interested when there is blood on the streets. It’s a pretty grim expression but savvy investors know that the point of maximum financial opportunity is when the market is gripped in a state of fear and prices are finding a floor.
Warren Buffet says to be fearful when others are greedy and be greedy when others are fearful.
Of course, in crypto, it is imperative to make sure you have done your research and only invest in quality assets — if we can draw a comparison to the dotcom bubble, many companies without solid fundamental value did not survive, and Cryptocurrencies are no exception. It may feel counter-intuitive, but if you’ve done your research and are looking to implement your action plan, a great time to enter the market is when everyone else is running for the exit.
· Keep Your Emotions In Check
Value Investors don’t care about tops or bottoms unless they are shopping for new clothes…
You are never going to catch the perfect top, or the perfect bottom, so don’t stress about making the perfect trade.
If you’re an emotional investor, a great way to remove it from the process is to dollar cost average your way in. You’ll get the satisfaction of accumulating without care for volatility and you’ll lock away that urge to check your phone every 5 mins for a better entry. If you’ve ever used the App Raiz to invest in stocks, there is a similar, and equally excellent application called, Amber, that allows you to purchase small amounts of Bitcoin at regular intervals set by you. Tools like these are great ways to passively invest in Crypto without emotional rollercoaster.
Blog by Sam MacDonald
Content Director
Disclaimer. Sam owns Cryptocurrency
Want to learn more? Come along to one of our National events or check out our free guide.
Here are the links:
Guide — https://selfdevelopmentinstitute.lpages.co/financialfreedomguide/
National Tour — https://selfdevelopmentinstitute.lpages.co/cci-national-tour/
