Trading Remains A Solid Approach For The Current Market

Strong Movements

Significant moves are what generate significant returns. Even though leverage can produce a similar outcome, it doesn’t come without significant risk. These risks are obviously amplified among the less experienced. However, a good move (either way) can provide really attractive returns. Some are perhaps considering that a new bull market has commenced. First, we need to break the long-term downtrend.

Consolidation above this particular trendline would be a good start. Taking advantage of the current volatility is however a great way to ensure you don’t miss out on the profits on offer. Trading can be risky in uncertain times. However, long trades can be converted into long-term holdings, if indeed a particular trade goes against you. I say this in light of those who do not make use of stop losses and are yet to develop their own risk management strategy.

Volatility is the lifeblood of any trader. I guess many hodlers are rather pleased by the recent price action. Traders, on the other hand, embrace volatility and significant moves in either direction. An important point to consider is what happens in a complete collapse. Investors are held hostage and forced to suffer enormous losses. The alternative is to sell, usually at a loss, and then proceed to sit on the sidelines.

Traders can secure even better returns in a crash, for the simple reason that they can profit from the collapse. Essentially, this is the ultimate hedge! Whether a market pumps or dumps is inconsequential in such a scenario. Perusing the content of the Crypto community as a whole has left me with the distinct impression that the majority of participants are investors looking to increase their “bags”.

I have also noted a number of individuals who are actively engaged in both. This is that of accumulation and trading. This is a great approach to have, as it keeps the profits coming, in both bullish and bearish times. A deeper correction from this point would most likely be heartbreaking for many. However, expanding beyond accumulation opens the door to such a scenario actually being a tremendous opportunity.

Expansion

Increasing “your borders” is imperative if you wish to grow and develop as an investor. I actually don’t enjoy the term “investor”, for the simple reason that being involved in Crypto is a lot more complex than simply investing. Expansion requires moving into unknown territory. I remember how in the early days of DeFi, many were opposed to the concept. Those same individuals are now immersed in the DeFi space, and consider it an essential part of their Crypto strategy.

There are those who are currently opposed to the idea of trading. After drawing much attention to the multiple bull traps of this particular bear market, I wonder how many will adjust their perspective next time around. Growth requires moving into new “territory”, and without it, there is no real growth in terms of ability, knowledge, and approach. The more tools at your disposal, the higher the likelihood of success.

A construction team with a full arsenal of tools is guaranteed to outperform a team with a hammer and limited toolbox. In a similar way, the more tools at your disposal as an “investor”, the greater your ability to extract value from the market. It becomes easier and easier with the acquisition of knowledge and skills. I have heard many stating that they don’t have the knowledge or time to begin trading.

However, taking part in any financial market requires knowledge. Interestingly enough, traders and investors are using the same tools. One is looking toward the future, while the other is looking toward the present. They are however both making use of data, graphs, and technical analysis. A self-professed “unskilled” trader is simultaneously an unskilled investor. This reality has however simply not hit home yet, and in many cases never will. Long live the casino!

Final Thoughts

Trading offers amazing opportunities, regardless of the market. For many, this has been a bear market of “realization”. Perhaps, we will see some interesting events taking place in the next bear market. The beauty of trading is that it is not limited to any particular market condition. It’s an “open license” to maximize and capitalize on any and every market condition.