Did you know many people lose money in crypto because they invest when the market is high and exit when the market is in the boom stage? If you are new to crypto trading, learning how to respond to different market conditions is the best skill.
First condition: Adjusting Trend
The above chart does not require any technical judgment; you can understand at a glance that after a wave of increase, the asset price is bottoming out and adjusting. How to deal with this situation is the key skill for trading. For this time, the better approach is to wait until the asset price reaches the top and bottom. When you have found that position lies in between resistance and support. Act accordingly, or create a stop loss. Remember, if there is no volatility, it means there is no profit. Never trade at that time. This is the best strategy to deal with these situations.
Second condition: Shock Bottoming Out
In the above chart, when the Bitcoin price suddenly falls, how will you respond to that movement? Practically, expert traders always don’t do anything even they do not give more attention to it. However, it looks like it is broken away from the bottom and has a great chance of trending.
In reality, it rises again. But it is never a fixed rule; how it will behave no one knows. For expert traders, when the BTC fell, it was the early stage of the trend, and there is no evidence that it will rise again. But there is a high probability of adjustment. Expert traders wait until BTC adjusts to some key positions. If the performance is according to an uptrend and there is a suitable position to participate, they certainly create a buy order.
The above chart is the latest; now BTC again in the adjustment area. So, how can you respond to this condition?
In crypto trading, it is not important which type of technique or combination of methods you are using. But respond to the market conditions, and learn and understand the market movements is necessary. This is what expert traders often describe as momentum trading.
It is also a fact that when you are trading at the pullback level, you’re always profitable because the prices are rising. When the market suddenly changes its direction, you start losing money. The trend is gone; you are no longer profitable. Prices are returned to the center to stop loss.
How to trade
Even if you have found the position at the pullback, first identify the attributes and trends of the market. Your methods and technique are trade-offs between profit and loss ratio. How effective your trading methods are, you should trade with the support of market conditions and trends.
In summary, if you do not understand the market, don’t trade; your understanding of the market and the trend is necessary. How you can respond to the events is the key skill to profitable trading.
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