Since there are many traders aware of the buying mania surrounding wallstreetbets, the now popular Reddit forum, and also because this army of retail traders had been propping up the Degocoin price for the past two days, we believe it will be important to talk in our weekly article about the crypto buying mania. That is why today we’ll share 4 useful tips for dealing with such situations professionally.
#1 Walk away if you can’t handle volatility
9 times out of 10, a professional trader will stay out of such situations, which is why our first tip for you is to walk away in case dealing with high volatility is now one of your strengths. Beginners are persuaded by the massive gains and they forget there are also risks involved. Just recently we’ve seen Polkadot rising impulsively, but even that bull run pales in comparison to what is happening with Dogecoin right now.
#2 Keep the risk limited
Some of you might be tempted to get involved, aware of the consequences that might show up in case the market will catch them wrong-footed. For those, we advise keeping the risk limited, trade with low leverage, and exposure only a small fraction of the available capital. Keep in mind that only a handful of people got to buy at very low levels and all the others are heavily exposed to sharp retracements.
#3 Don’t overtrade
We’ve already seen that cryptocurrency prospects are uncertain in a rising yields environment, which is why it would be critical to avoid overtrading when dealing with tokens that are rising/falling fast during a short period. Overtrading increases the probability of making a big mistake that will wipe out a significant chunk if not all your money. The cryptocurrency market will exist tomorrow and next week or next month, so there will be plenty of new trading opportunities down the road.
#4 Make decisions based on your own judgment
In case you’ve been involved in the cryptocurrency market for at least a few months, we assume you’ve already developed a methodology on how to buy or sell. Even if you need to make decisions during a buying mania situation, it is critical to not be influenced by other rookies’ opinions and continue to judge the market based on your knowledge.
The trading idea alone is not enough. You also need to manage the trade as the price action unfolds. We hope all 4 tips are useful in such a crazy time and by following them, you can rest assure you will be able to avoid many painful mistakes.