You Can Count On It!
I don’t care how bullish any market is, market corrections are part and parcel of healthy market behavior. Instead of ignoring this reality, smart investors tend to take advantage of corrections, fashioning them to their will. Essentially, this requires preparation. Yes, a skilled investor, or trader, already has protocols in place for when a correction strikes. A truly effective strategy will often require early detection. In most cases, an hour or two is sufficient.
Great investment practices extend beyond reactionary responses. Most investors rush to sell when prices plunge. This is an impulsive response that often leads to disappointment and regret. Instead, market participants should be monitoring the market, in an attempt to identify the warning signs before the actual event. A well-executed shift to stablecoins can increase your holdings.
As I mentioned in an earlier article, profit-taking in a bull market is often the wrong approach to take. However, when the market shows signs of a correction, exiting the market temporarily can be a great move. At such a point in the journey, investors can consider realizing a little profit, if they so choose. Essentially, investors need to get into the habit of “reloading”.
Dry Powder & Ideas
Essentially, the market will always provide opportunities to reload. What do I mean by this? It’s the opportunity to prepare for the next leg up, which will often be preceded by a leg down. It’s the time investors should be reloading their DeFi wallets and CEX accounts with fresh capital. This capital is then deployed during a correction. For such an investor, a correction is more of a blessing than a curse.
As I mentioned earlier, the investor who has identified a correction can also benefit and “reload” by selling certain assets before the correction and then repurchasing more holdings once the correction strikes. Of course, it’s best to aim for as close to the bottom as possible. However, it’s important not to be greedy. It’s a “window” opportunity and you don’t want to be left outside when the window closes.
Corrections are guaranteed, and so too should be your strategies to harness them profitably. Profit-taking for the sake of securing profit is entirely different from exiting the market temporarily due to a predictable market correction. These are reloading opportunities, and correctly practiced over an entire bullish season can be quite lucrative. However, it is perhaps a practice reserved for the more experienced investor.
Final Thoughts
A 5% to 15% correction for BTC can offer significant discounts for smaller altcoins, especially micro-caps. This most recent crash provided an exceptional opportunity for Solanium. I bought the bottom, approximately 16% below where it was trading before the correction. These are incredibly profitable margins, especially over the medium to longer term. Anyway, that’s it for this one. Hopefully, we will get to see new highs soon. All the best. See you next time!
Disclaimer
First of all, I am not a financial advisor. All information provided on this website is strictly my own opinion and not financial advice. I do make use of affiliate links. Purchasing or interacting with any third-party company could result in me receiving a commission. In some instances, utilizing an affiliate link can also result in a bonus or discount.
This article was first published on Sapphire Crypto.
Posted Using InLeo Alpha