This is the time now: in this market, you should always have reasons why it is worth entering into trades or investing at all. Here are a few reasons why right now can be selected:
- Time horizon;
- risk factor;
1) Time horizon
This is a short-term trade or investment. in debt? This is the #1 question you should ask yourself before buying anything from this market. From the past bearish cycle, I remember similar personal actions:
- no experience;
- read or watched a video about some coin that will give a hundred x;
- on emotions you buy and wait;
- tomorrow there are no x’s, the day after tomorrow, too;
- in two or three weeks the deal is in the red;
- get out of it and look for a new gem.
The approach is wrong from the start. Too many people rush to buy on emotion and confuse a deal with an investment. Most are not active traders and have neither the knowledge nor the time to understand entry/exit points.
Buying long is fine, but be very careful what you decide to invest in with DCA in these market conditions. If we bought BTC at 20800 long, it was not an impulsive purchase and we are ready to see more new bottoms ahead. But! there are no worries in this regard, this is a long-term decision, and a very small % of the deposit was allocated for it. Do not allow to invest in the long term those amounts that will affect your psychological state.
2) Risk factor
In the current market conditions, you should be selective about the disadvantages of your token. Finding a top shield in a bull market is cool, figuratively speaking, everything flies “X100”. In a bear market, the opposite is true.
Buying the same BTC is rather boring and will not bring relatively large profits. Everyone wants to get rich (quickly) and doesn’t want the X5 that BTC will give. But buying shields now is extremely risky. And the longer you hold them, the longer it plays against you.
We’ve seen a lot of people come into a bear market bullish, go bust and leave the market before the bull starts. We saw a lot of people who, after the end of bulls, continued to drown for bulls, and now they are sitting at -90%. Will you have enough strength and patience in the future, when new coins will fly into the sky, and your old tokens with -90% will remain in the same place? Then I remembered the analysis of x100 coins (based on history, new projects are many times more likely to make conditional x100 than coins from previous cycles). And if we also have shields in our portfolios, this is very bad news.
To simplify: if you do not understand the phase of the market, do not invest in shields at all.
How liquid is the coin you are buying? Most retailers don’t need to worry about cup depth/slip. But even we can be whales for small caps, especially on dexes. Such coins can be pumped a hundred times, but getting out of them will be either very difficult or unrealistic.
Once in 2019, we bought one exchange coin. First, the deposit was 30 times, and then, when she was already dead, she was propamped on the last of the dexes. The result is $8,000 in the picture and zero liquidity. And so it remained in memory. So it’s important to buy coins that trade with appropriate liquidity and not get stuck in one of them.
Speaking of shields and scams, there are few ideas on the bear and advertising of new projects goes off scale, pushing impulsive minds to rash actions. And some of the new startups will not master the road to the bull, be extremely selective. It is important to have a logic and rationale for any purchase in a given environment.
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