What our favorite porridge-stealing nursery rhyme teaches us about trading crypto.
Without comparing crypto-traders too closely to the porridge-stealing-golden-haired-deviant, there can be some useful parallels drawn between her porridge selection tactics, and the strategies of pro-traders. Trading crypto can be boiled down to one’s ability to find, and stuff as much of that “just right” tempered porridge into one’s mouth, as fast as possible. But perhaps in our case, we leave the house before we get caught by the bears...
Due to the high levels of volatility in crypto markets, and as a result of people having access to quality information on how to make potentially staggering profits with trading platforms like ChainBit, and IG, a lot more people are giving trading a go.
This article will explore three trading strategies that new traders can employ to potentially see the right kind of returns in the right amount of time they are looking for, namely; short-term(hot*1), long-term (cold*2), and medium-term (just right*3).
Shor-term - Hot*1
Day Trading
Let’s analyze, for a second, what would have happened if Goldilocks had eaten the first bowl of porridge. Down to basics, she could have had her fill and more, but she would have had to wait. Analytically, what does this mean?
Positives: She may eventually have had a huge bowl of porridge to gorge herself on if she didn’t get caught…
Negatives: She can’t eat right now, and possibly not for quite a long time.
Day trading is the practice of buying and selling within one day, never overnight.
- Investopedia
raders enter and exit trading positions within that short time, ranging from seconds to minutes, to hours. They then benefit from price changes that take place within that period.
For the average investor who does not have the time to watch the market daily. It may be better to focus on other investing strategies more geared for medium-term returns.
Long-term - Cold*2
Position trading
Let’s move over to the second bowl. Too cold. Again, what are the basics?
Positives: She can eat right now.
Negatives: The porridge is cold. Being a bland food, to begin with, it may take time to get through it, ultimately leading her to get caught by the bears anyway.
Position traders place trades like a patient Goldilocks would. Their decisions are based on long-term movements in the prices of cryptocurrencies. Therefore, trades span for several weeks, months, or even years. This strategy may yield high returns, but it also requires the ability to correctly gauge the markets over an enormous time frame.
-Read more about how to plan your trades on DailyPriceAction.com
Medium-term - Juuuust Right*3
Swing Trading
On to the third bowl...
Positive: You can eat it right now. (Short to medium term period to realize potential profits)
Negative: You don’t get caught by the bears. (More accurate analysis and prediction of price movements., meaning you can sell (at a profit) before the bears push down the price.
With this strategy, the trader holds the assets for longer periods. Notably, this is the best strategy for beginners, as they can choose a suitable time to exit a position.
Interestingly, these traders do not sit and watch the charts all day. - Investopedia
This is because the strategy depends on natural swings of price cycles and they cleverly make use of the knowledge of trading platform account managers from platforms like ChainBit.
Conclusion
Goldilocks had it all going for her. She was young, full of life, and had a belly full of porridge. Instead of quitting while she was ahead, she stayed in the game for too long and got caught when the bears came home.
Know when to buy. Know when to sell. Take advantage of the resources available to you. Trading platforms like ChainBit make trading a whole lot easier.
Don’t be like Goldilocks.
Sell high and buy the dip.
