Suppose you want to begin investing in cryptocurrencies. In that case, you must learn how to interpret and use the market’s nature to your advantage. Experienced traders know what strategies to do during each market fluctuation. This is the key to being a successful investor. Visit The News Spy for more information on bitcoin trading.
In this article, you’re going to learn how to manage yourself in bullish markets and all the tips and tricks you need to improve your investment tactics.
Bull Market Definition
The crypto market is constantly experiencing ups and downs. However, a market is considered bullish when the asset continuously increases in price for several months and even years.
Although this name might seem a bit ambiguous, bullish markets are named that way because of the way bulls attack by thrusting their horns upwards.
It is pretty difficult to predict market trends, so most investors recognize bull markets after the trend has already passed. Moreover, these are times when excitement and optimism can overwhelm the investor and cloud their judgment.
In general, bull markets tend to be measured by a simple rule of a 20% price increase, after a 20% decrease, and before a second 20% drop. However, this is not a universal rule, and it can change depending on the circumstances.
Bull VS. Bear Markets
The counterparts of bullish markets are bearish markets. Bear markets are called this way because when a bear attacks, it throws its prey to the ground with its paws.
Although bear markets tend to be pessimistic due to the sudden fall in the price of the assets, both markets are part of the natural economic cycle all assets go through. Moreover, researchers have been able to predict certain economic recessions and expansions by analyzing these sudden market changes.
How to Benefit from a Bull Market
Now that you know how bullish markets work, you need to learn how to take advantage of them. Most traders plan out their strategies depending on these market fluctuations. Although these strategies may vary from person to person, they all come from the same principles.
Buy and Hold
Suppose you’re feeling confident that the asset is going to keep increasing in value. In that case, the best thing you can do is buy as much as you can and hold onto it until it has reached a stable enough price for you to re-sell. However, please don’t go overboard with this, as it is possible that the prices plummet overnight, and you end up losing your money.
Increased Buy and Hold
This strategy is similar to the last one but a bit riskier. It consists in buying assets for as long as the price keeps increasing. Some investors fixate a specific amount of crypto that’s automatically purchased each time there’s a price increase. Then, when the market stabilizes again, re-sell the assets.
Retracement Additions
You must keep in mind that even during bullish markets, there are going to be small dips in the asset’s value. A good strategy that investors do to get a somewhat “discount price” for the coin is to buy during one of these dips. Assuming that the trend is going to keep moving uphill, this ends up saving them some money.
Full Swing Trading
Full swing trading is a mix of several tactics, such as short-selling and the previously mentioned strategies, to actively engage in the market’s context and generate as much profit as possible.
Bottom Line
Now you know everything you need to properly invest in bullish markets. However, please keep in mind the possible losses you might experience and always be careful with your assets.