The recent market volatility in the world stock markets including everything from blue chip indexes (SPX, DJIA, DAX) to emerging markets has investors worried. Years of bullish conditions have conditioned investors to “buy the dip” and take profits shortly thereafter. Meanwhile, Bitcoin and cryptocurrency investors have been subject to sustained volatility for 10-years. The cryptocurrency market lost 90% of its value in 2013 and 82% in 2011. According to this article, if you invested when Bitcoin lost 90% of its value in 2011, you would be a millionaire and if you invested this year, you’re massively in the red: https://www.cnbc.com/2018/11/30/if-you-invested-1000-in-bitcoin-in-2011-now-you-have-4-million.html.
Those who have participated in the commodity, futures, options and FOREX markets understand the ramifications of such volatility. Bitcoin is going to on the Nasdaq with futures contracts that will impact you. A lot of people will be jumping into this highly volatile asset and will lose their shirt if they are not careful. I would like to share some strategies below.
Extreme volatility means you do not borrow money or buy on credit.
Extreme volatility means you hold your asset and do not sell when market noise gets loud.
Extreme volatility means you accept the money you invest is gone. It’s money you can afford to lose and will not get bent out of shape when that happens.
Extreme volatility means loss and gain are foregone conclusions in your mind. You take gains when you are up and do not get greedy. Making 10% in a day after fees is a good day and you’ll want to take those gains to the bank (or USDT).
Extreme volatility means that when and if you ever use leverage, make sure to set limits or the market will take from your account and bank account.
Extremely volatile means that if you cannot calculate your total losses in options or futures contracts, you do not invest. It is incredibly hard to accurately gage the value of options contracts so make sure you are able to do this.
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