If you do a google search for "Crypto Best Practices", you'll find a lot of wild articles talking about all sorts of different strategies for accumulating, trading and investing in crypto.
There's so many different things you can do in this industry. In my last two articles, I talked about investing in BTC as the path to financial freedom and leveraging sweat equity within the Hive ecosystem as a critical way to stack more crypto.
Regardless of how you choose to approach this industry, there are some best practices that I think everyone needs to know.
Let's say you do more of what I talked about in the first article above - that will leave you buying a lot of BTC at various prices. There are certain strategies that will help you dollar cost average into BTC more effectively.
Or let's say that you engage more in the second article above - stacking crypto by earning crypto on the Hive blockchain. There are certain strategies that will help you more effectively stack crypto / trade earnings into other assets.
In today's post, I'll talk about one of the most fundamental ways to improve your crypto portfolio: Limit Orders.
How to Accumulate More Crypto: Limit Orders Are Your Best Friend
Accumulating crypto using Limit Orders is a fantastic way to stack more sats (or alts). I use limit orders all day, every day. There are plenty of ways to do this and plenty of meta strategies within this strategy.
I Dollar Cost Average into BTC every single day. Sometimes, BTC is up certain days more than others. This leaves you wondering if you should buy at the current price or "wait for the price to come down to a cheaper equilibrium."
The waiting to buy conundrum is something that I personally hate. I think deviating from your preset plan to stack is a great way to end up pissed off in a bull market.
After all, what if the price never comes down to a level you'd rather buy it at?
Price is Relative
Prices are all relative. It's crazy that people think of prices in such a human, emotional way.
Our brains are not wired to handle the emotionless complexities of "Mr. Market". Mr. Market will take you for a wild ride and whipsaw you this way and that.
What's an investor to do?
Limit orders. Learning how to use limit orders will forever change the way you invest in crypto or stocks or any other asset.
In or Out
Limit orders can help you get in or out of an asset. They remove a lot of emotion out of the game of investing, which is the way I love to use them.
If you see one of my accounts above, I've got some Limit orders to buy BTC at $21,5 and $21,6. These two orders actually just got filled.
You can see that I am continuing my dollar cost averaging plan. I'm not deviating from that plan. I simply continue to set buy orders on a daily basis.
A huge key to this is maintaining the discipline. I could have easily chosen to just "wait" for the price to come down to $21,5... but what if I was asleep? What if I was busy with something else? What if we flashed down to $21,5 but then immediately went back up?
Limit orders save the day.
This applies to both buying and selling. My example above focuses on buying but selling in the bull market is easily done with Limit Orders.
In fact, I apply the same Dollar-Cost Averaging strategy to sell assets in the bull market.
Picture BTC going above $50k next week.. What would you do?
Emotions may tell you to wait to sell until it's over $100k.
Wits will tell you to set ladder limit orders starting at $50k... $52k... $54k... $60k...
Setting these orders will take all of the emotions and guess work out of it!
Comment Below - Do You Use Limit Orders? Why or Why Not?
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What you say seems very interesting to me, personally, I don't like to leave limit orders to the downside (aiming to enter low prices), because of that old trading maxim that says "Never try to catch a falling knife"; unless I am certain or have a reasonable level of certainty that there will be some kind of bounce in price (and that is usually done based on the trend).
On the other hand, what I do use is to leave limit orders to make automatic sales (that is, to make take profit). Sometimes obviously the price doesn't reach the point I project, but many other times it does, and it's a great way to automate my trading activities.
Anyway, limit orders are great, but we still have to be careful how we use them. Very good post. Greetings.
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Emotion is not your friend if you’re trading. There are many sob stories to tell from the last bull market which was my first. It is similar to being consistent with your blogging or threading or what you are aiming to achieve. Good strategy. I think I am good at buying but really emotional while selling.
I like how daily blockchain use is considered DCA'ing in to alts.
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Wao! I will like to try this, I once heard about it but was not clear about it then, now you made it clear to us. Thanks for sharing
I was hoping you'd give a tiny guide on how to buy on limit order... I've once tried it but ended up buying at market price again 🥲
So I'm not sure how it's done, I'll need a tiny explanation on how you do it... I've been buying my assets (especially Hive engine tokens) at market price 😩 lol.
I feel the excitement from reading this, it will definitely be more addictive for me if I could start stacking more assets this way haha... Please guide? 🙂
Choose an asset (this is leo on leodex)
Take a look at the prices
Choose which price you will buy at. In this case, it has to be between these numbers.
Then press the "buy" button.
Since there is no one selling for that price, it will be listed as a "buy order"
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Oh I'm so grateful, thanks for the guide 🙂
I dont but right now have learnt, thanks for sharing boss
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For trading crypto, knowledge of stop limit orders, OCO are also important. Then moving to the future trading and marginal trading. I will be waiting for you to write about the future and marginal.
Even though am pretty new and adapting quickly, it good to see how limit order can be of help in accumulating crypto now.
Thanks for passing this information
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I set buy limit orders on a weekly basis and usually have 5 on the go at anyone time. However, when the market picks up like it recently did I tend to stop adjusting the prices every week waiting for it to go back down. Last weekend I finally upped all 5 of my limit orders and will check later to see if any of them got filled.
I've never sold so haven't tried DCA'g for selling yet.
One thing I'm curious about . . . why do you use stable coins to buy rather than $. Is it just because of the challenges of buying if you live in the States or is there another reason?
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I am based in the USA., for me it's the trouble buying with dollars. Most exchanges require Bitcoin or USDT or another stable due to limited trading pairs.
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Well written -- good info!
Indeed, the appropriate use of limit orders with a compare/sell average price strategy is a phenomenal idea for making a dynamic trading method. In fact, the HBD stabilizer does something similar. Greeting.
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As an options investor I try to get filled at the midpoint betrween the bid and the ask, certainly a limit order. I then set limit orders to get out. I predetermine the amount of profit I want from a spread at 33% set the limit and forget it. If the position is risky I pick a loss level to get out instead. But thats much rarer, and usually for longer lifespan options. I could kick myself for not doing this with alts. I always want to add to my stack now. I am learning to be more patient, and I think this is wise advice. trying to time the market is difficult for most, and even Warren Buffet says he doesn't try, so why would I? :)
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Gospel truth.
Chewing on it now…