We would like to start our series of educational posts by explaining the principles we ourselves follow at Pennygene. You may have even seen in one of our previous posts or Clubhouse podcasts that we stick to a long-term trading style. But why? What is its advantage over intraday trading? Will the long-term approach bring me more money than short-term trading? We will try to answer all these questions in a series of several posts.
Many new traders initially come to the cryptocurrency market with wrong expectations and wrong ideas about trading. Recently a trader, let's call him Joe, came to our Clubhouse podcast. According to his words he was doing long term and intraday trading for 4 years, he was listening to the news about different bitcoins and tried to catch a big upward movement to buy cheaper and sell as expensive as possible some new unknown, but in his opinion very promising altcoin. Joe told us honestly, that he lost his deposit several times, so he missed a great opportunity to buy more bitcoins at $3.000. With obvious sadness in his voice, Joe said that he would be a millionaire if he hadn't used this approach. Let's think about it, what's he done wrong?
Mistake 1
And so, the first mistake that catches our eye is trading on the news. If someone on TV or the Internet in a gardening or auto mechanics forum tells you that bitcoin has reached another incredible high, and right now you need to actively buy it because bitcoin will rise in price, you know that the chance of losing money in this case - is extremely high.
Advice from Pennygene:
In today's world, you can use the news to trade, but there's just one important trick. You have to sell when the TV tells you to buy. In all markets ( whether it is stocks or cryptocurrency), the trader who has exceptional knowledge, experience, or as in the case of stocks, may have insider information, which is not yet known to other players on the market, only these traders make a profit.
When the information has reached the news broadcasts and people who have never been in trading, that means:
a) the information is already outdated and the best moment of growth is already missed.
b) a large number of emotional retail investors who make risky trades will come to the market soon (maybe even with leverage) and the new long orders of these people will later provide excellent liquidity for experienced traders, who came at the beginning of this movement and are already looking for a selling point to take profit. Thus, the beginners lose their money and this has always been that way.
Don't listen to the news if you want to trade assets and make money on it constantly. In the next post, we will continue this topic and tell you what other mistakes Joe made and how you can avoid them.
Many new traders initially come to the cryptocurrency market with wrong expectations and wrong ideas about trading. Recently a trader, let's call him Joe, came to our Clubhouse podcast. According to his words he was doing long term and intraday trading for 4 years, he was listening to the news about different bitcoins and tried to catch a big upward movement to buy cheaper and sell as expensive as possible some new unknown, but in his opinion very promising altcoin. Joe told us honestly, that he lost his deposit several times, so he missed a great opportunity to buy more bitcoins at $3.000. With obvious sadness in his voice, Joe said that he would be a millionaire if he hadn't used this approach. Let's think about it, what's he done wrong?
Mistake 1
And so, the first mistake that catches our eye is trading on the news. If someone on TV or the Internet in a gardening or auto mechanics forum tells you that bitcoin has reached another incredible high, and right now you need to actively buy it because bitcoin will rise in price, you know that the chance of losing money in this case - is extremely high.
Advice from Pennygene:
In today's world, you can use the news to trade, but there's just one important trick. You have to sell when the TV tells you to buy. In all markets ( whether it is stocks or cryptocurrency), the trader who has exceptional knowledge, experience, or as in the case of stocks, may have insider information, which is not yet known to other players on the market, only these traders make a profit.
When the information has reached the news broadcasts and people who have never been in trading, that means:
a) the information is already outdated and the best moment of growth is already missed.
b) a large number of emotional retail investors who make risky trades will come to the market soon (maybe even with leverage) and the new long orders of these people will later provide excellent liquidity for experienced traders, who came at the beginning of this movement and are already looking for a selling point to take profit. Thus, the beginners lose their money and this has always been that way.
Don't listen to the news if you want to trade assets and make money on it constantly. In the next post, we will continue this topic and tell you what other mistakes Joe made and how you can avoid them.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.