Should you buy the dip? And how should you do it.
Looking at the dip these few days makes me reconsider my approach towards cryptocurrency price dips. My initial strategy was quite simple, I just see it dip for a while and started buying it. The worse thing is, I tend to use all 100% of my funds and find it dipping even more later on.
My new approach from what I've observed is to divide your funds, enough to buy your dip 3-4 times. It's the same as don't put all your eggs into a single basket. It's a chance to benefit more from the dip, and a chance to reconsider your decision whether you still wanna hold the dip and buy more. I have a holding-on approach more than a trader approach, so I don't incur much loss, but trying ways to benefit more from each trade would help grow my portfolio a bit faster.
I'll try breaking it into detailed explanations with some examples.
Let's say Ethereum is priced at $4k/Eth
On day 1, Eth dip 10% and you buy 1 Eth at the price of $3,600.
On day 2, dip another 10% and you buy 1 Eth at the price of $3,240
On day 3, down another 10% and you buy 1 Eth at the price of $2916
On day 4, again another 10% and you buy 1 Eth at the price of $2,624.4
Then on day 5, the price took a return to the initial price of $4,000, you sell 4 Eth at the price of $16,000.
Now let calculate the profit you've earned.
For the 1st dip, you earned $400
2nd dip, you earned $760
3rd dip, you earned $1,084
4th dip, you earned $1,376
For a total profit of $3620
With only your capital of $12,380
Your profit estimates about 23% of your total earnings!
Imagine if you've bought 4 Eth at the price of $3,600 for $14,400. The profit you would've earned would only be $1,600.
That's a total difference of 13%!
There are ways to go about anything and everything.
People invent strategies and life hacks to improve their life, there're lot more ways to earn more in cryptocurrency still undiscovered. I believe there'll be more people sharing about these strategies in the future helping the crypto community grow in a way no one has ever imagined. I believe cryptoples(crypto people) are striving to grow the community as much as possible to help improve the functionality of cryptos in our daily life.
Feel free to help share your strategies if you're willing.
The readers will be glad to be able to improve their earnings.