Lost your capital in crypto-trading? What went wrong?Crypto-currencies offer the excitement and unbelievable returns within a short span of time.
No wonder, so many youngsters opened Trading Accounts in past few months and were laughing their way at classical traders who kept themselves confined to stocks.
What went wrong? Crypto-currency has no intrinsic value unlike the dollar/euro or any other official currency which is backed by the central bank in your country.
As experts say, a currency can not be people's currency if its daily fluctuations can be + or - 30% or even more. Would you like to get your salary in Bitcoins if you fear it might dip by 30% next day?
Most of the speculators were thinking that there is only one way for the crypto-currency to go: that is up. And hence, they kept holding their currency, even when technical indicators were shouting out to exit. Also, many new traders do not know that you can earn both ways: during up move also and during down move also. For example: You can exit your holding in bitcoin and then short sell bitcoin Futures or Buy Put Options if your technical indicator tells to Sell.
When a stock or any other instrument gets pumped up, a time comes when the last speculator has already bought and after that, there is no demand. At this juncture, everyone becomes a seller, and if there are no lower circuits imposed by regulator in your country, the underlying instrument can dip to any low.
How you can avoid getting caught in a situation like this?
Make good use of a good technical indicator which acts on 02 levels: (a) Reacts to Flash momentum (b) Reacts to Slow rise/fall.
This ensures that you are never too late to Enter or Exit.
