Just when you thought that the bull market is over when prices started to decline, a new bull run has emerged. Multiple crypto tokens across the board broke their previous all time highs. Cardano itself has been hovering near the 3 USD mark for some time as the network prepares for the hard fork on September 12.
These are exciting times again but what should you do during a bull run such as this? Should you buy in or sit it out? Read on to find out our recommendations:
1. Educate Yourself
Whether or not you plan on investing in cryptocurrencies, you should definitely educate yourself. Like it or not, cryptocurrencies will be a part of our financial future so it’s better to know about it earlier rather than later. Read mainstream media and websites. Talk to people you know who plays with cryptocurrencies. Just remember to always verify any information by cross checking it with multiple other sources. This ensures you do not fall for wrong advice or worse become a victim of scams.
2. Test The Waters
It may take some time for your account to get verified so creating an account in an exchange should be your next step. There is no charge to creating an account. Once your account is created, explore the capabilities of the platform. Put in some money and practice buying and selling crypto in small amounts. For some coins with cheap transaction costs like Cardano, you can do this for as little as 10 USD. For Bitcoin and Ethereum however, you need to put in much more as their transaction costs can reach 20 USD sometimes.
3. Manage Your Emotions
Observe how the market works. All markets including the crypto and stock markets will go up and down. This is normal but it can cause both excitement and disappointment. Emotions can lead you to do irrational things like buying at the top because you are too excited or selling at the bottom because you are too disappointed. Learn to think with your head and not with your heart. The best way to do this is to make a plan and stick to it without getting swayed by your emotions.
4. Decide On An Entry Point
Select the crypto you want to buy (e.g. Cardano). Observe its price movement charts at various time frame charts (daily, weekly, monthly, annual, etc). Read about any activities related to the coin which may affect its price in the future (e.g. coming hard fork, new investments, regulations, etc). If all looks okay, determine what price you want to enter and proceed to the next step.
5. Set An Exit Strategy
This is a very important step which a lot of new investors tend to forget. You frequently see people claiming that they will HODL (Hold On For Dear Life) a certain coin and will never sell it. In reality, no matter how much you believe in the project, you should still sell at least part of your holdings at some point to realize gains. Even if your end goal is very far off from the current price, you should still set it at the time of buying. Also, remember that crypto is very volatile so never put in money you may need in the near future. An example exit strategy would be: “I will sell 20% of my coins when the price reaches 10x my buying price, the rest I will sell when it reaches 20x my buying price”. Tweak these numbers according to your situation.
6. Execute Your Plan
Now that you are familiar with how to buy/sell crypto and have determined your entry and exit strategy, execute your plan and stick to it. Try to avoid changing your plan as much as possible irregardless of how the market moves. In the past, there were events that disrupted markets like regulatory action and hacking. Over time however, the market usually recovers. Please keep this in mind before selling prematurely.
There you have it, our recommendations on what to do in a surging market. In actual fact, these recommendations are even more effective if you do it in a declining bear market. Psychologically however, people prefer to invest when the market is rising in a bull market. Follow these recommendations to improve the way you invest in the future.
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