“Once the Bull Market is in full swing, it’s impossible to catch up”. This simple, yet powerful statement is on every seasoned investor’s mind during a time where things can’t seem to happen fast enough.
In this article, we dive deep into 5 time-tested techniques perfected by our Senior Analysts to consistently thrive in Bull and Bear markets alike – These techniques can be divided into 2 core principles, Risk Management and Proper Diversification Methods:
1. Dollar Cost Averaging (DCA Strategy)
Dollar Cost Averaging or Laddering In/ Laddering Out is top of our list for a reason, that being it’s the most time-tested and proven-to-be-profitable strategy that works for 99+% of investors. If you’re not familiar with the term, it’s simply dividing the total amount you want to invest over a set period of time and equally allocating that investment over set intervals. For example, if you wanted to invest $10,000 you could break it up into 10, $1000 allocations and invest every month for ten months or every week for ten weeks to the total of $10,000.
This effectively spreads your purchase cost out over 10 time frames, and your average acquisition cost will be the average of the ten purchases and spreads your risk of significant overnight losses to near-zero.
The DCA method is especially useful when trying to find the bottom of the markets, as well as the tops when we are exiting and taking profits. Having this formula takes the stress out of trying to pinpoint the exact tops and bottoms of the market which almost never works out.
2. Stop Loss Strategy
No investment or trading strategy is complete without proper risk management. This can also be used to aid in finding tops and bottoms, and works well with our DCA method discussed above as you can apply more finesse to your strategy and if crucial levels are broken, reduce your risk without you having to be at the desk.
Stop Losses can be a bit tricky to get used to, but make the difference between a part-time hobbyist and a full-time trader or professional investor. 30% swings can be common in both Bull and Bear markets, with 85+% corrections common every few years with Bitcoin, nevermind the Altcoin markets. This can be absolutely devastating if you are positioned incorrectly, versus a potentially life-changing opportunity if you can time that re-positioning correctly. It will never be perfect, but slight adjustments can make huge differences in the end outcome.
Although your Stop Loss strategy can be as complex or as simple as you want it to be, here are some rough guidelines:
– 8-12% is typical for Day and Mid-Term Trades, with 15% for Longer Term
– 1% Gap between Stop and Limit is usually sufficient to ensure orders fill
– +/- 2% on Coingecko can verify allocation sizes and liquidity
More Advanced Methods include:
– Support/ Resistance Levels
– Supply & Demand Zones
– Fibonacci Ranges
All of which and more can be found inside our Ultimate Trading Course that includes Lifetime access to our custom-developed indicators and direct access to BitcoinTAF Senior Analysts on a weekly basis for the duration of your subscription.
3. Take Profit Strategy
Stop Losses aren’t always fun, but I’ve never seen anyone who’s upset about taking profits!
Being strict with yourself and taking profits off of the table can be one of the most difficult things to do in a Bull Market. This, of course, is the most important and crucial time that you need to be prepared for, as it can be intoxicating waking up to double or even triple digit gains on a daily basis. Having dedicated Take Profit or TP levels prepared ahead of time can take almost all of the stress out of this, and setting orders ahead of time ensures that emotions can’t take over.
What to do with the profits is now of course up to you to decide 😁
Risk management should be your #1 focus, with #2 being Proper Diversification Methods:
4. Portfolio Allocation
Portfolio Allocation can be a bit tricky, too many coins and it can be impossible to manage and too few coins you run the risk of losing out on opportunities. This is where sectoring off your portfolio can ease the burden of managing an ever-growing portfolio and you can use the strategies mentioned above to reduce risk along the way.
The first and most important sector is your Foundation or Long-Term portfolio. These are coins that you’re willing to hold through any storm or situation for at least 12-18 months or more. Staking methods can be used (responsibly) to grow these holdings and keep them out of sight and out of mind, but the most highly recommended method is using Cold Storage devices that never touch the internet except during the pre-decided moments when you’re moving assets.
The second sector is typically swing or position trading positions, ones that you hold for 6-9 months on average and “farm” the highs and lows to reduce risk while adding to Foundation positions on the lows.
5. Multiple Income Streams
The Final sector being Day or Intraday Trading, which can be an incredibly powerful additional income stream that supports your chosen lifestyle from anywhere in the world with a wifi connection. Generating additional income every few days and multiple times per month can alleviate the stress of paying bills and paying off debt, as well as can go a long ways towards additional positioning with First and Second Sector portfolios.
Multiple Take-Profit strategies (Short, Medium and Long) can also be a very beneficial addition to your overall strategy, and is also highly recommended. This can be as simple as closing positions in Mid and Small cap coins, and accumulating more Large Cap coins like Bitcoin and Ethereum as we get close to the top of the next market swing to ensure we have sufficient exit liquidity.
6. Countries of Residence & Banking (Bonus)
This is one of the most-asked questions that we get on a regular basis. One of the greatest aspects of being a Crypto Investor or Trader (or both) is that you can live and thrive anywhere in the world that you want. Regulations and “Government Friendliness” is forever changing, but evolving in a very productive way that allows you more freedom and flexibility when choosing a new home or an “Open-Ended Vacation” location.
So far in 2023 we have seen the USA banking sector close-off to cryptocurrency, but France, Hong Kong, UAE and UK all adopting super-friendly crypto and tax regulations that could bring in massive investment. This, along with being able to bank anywhere in the world, gives you a lot of flexibility when it comes to where you want to de-risk and invest your profits in alternative industries like real estate or physical precious metals.
The ages-old “Golden Rule” of living in one country, while generating income from another country and banking in a third country is becoming a crucial part of everyday living. Banking collapses, exchange collapses and hacks, and inflation are all aspects we need to be considering when finalizing our Investment and Trading Strategies.
It’s Never Too Late to Get Started
After reading this article, you are well on your way to preparing for the imminent and much anticipated Bull Market. We can’t promise that this is an easy task, but we can promise that it’s worth every ounce of effort and will pay off exponentially in the long run.
If you stumble along the way, don’t hesitate to seek help. We are here to work with you shoulder-to-shoulder every step of the way with Direct 1-on-1 Coaching available to fit any schedule and bridge any gap you find along your crypto journey.
