Crypto For Noobs #1: "When To Buy?"
So for a long time I have been wanting to do a series of articles for new people in the crypto space, often referred to lovingly as noobs.
Pretty much every single day I have someone ask me questions about cryptocurrency and Bitcoin specifically. I even have friends and coworkers that just call me "Bitcoin" or "Bitcoin Boy" from time to time because of my obsession with the topic. Often times these questions become very repetitive and I even have some responses though of ahead of time.
Questions like: What IS Bitcoin? So how do I get my money out? How do I invest? Is now a good time to buy?
I have no problem answering these kinds of things for people but remember that time is always of the essence. I could literally talk for HOURS on end about crypto, blockchain and the technological revolution that is happening around it. People that are new to the space simply don't understand the concepts, let alone the mass developments that are ongoing in the FinTech industry. For this I have decided to write some lighthearted and fun reads for people to check out.
Bitcoin is much more than money- it is a paradigm shift in the financial industry and it will trigger a landslide change in how ALL types of information are managed worldwide.
Bitcoin is the proof-of-concept for decentralized ledger blockchain technology. It is the primordial goo that all other blockchains, and even some blockchain-inspired technologies (ie block lattice), were created from.
On and on I could go but this article will specifically focus on WHEN TO BUY! One of the most important things to know, especially if you are brand new and have no reference points to start with.
Depending on your specific portfolio goals and personal financial situation things may vary. If you are someone that got into Bitcoin really early you may have a hard time buying any at the current prices (over $9K). However if you got into Bitcoin 6 months ago and saw it hit $20K in December then you may think you are getting half off!
My advice is always this:
1) NEVER INVEST MORE THAN YOU ARE WILLING TO LOSE
2) Cost average (or dollar cost average- DCA) your positions over time instead of going "all-in"
3) Remember that this is an investment and it will take time to mature
4) BUY THE DIPS!
If you were buying a stock in a traditional stock market you would expect to wait a minimum of 5-10 years for it to mature into very profitable holding. Since cryptocurrency markets are much more volatile and action packed a few months may seem like a year! But remember that JUST one year ago the whole crypto market was only one-eighth of the size it is now.
Now knowing this, the million dollar question is WHEN TO BUY?
Again it depends on your personal situation... if you are looking to make a day trade for a quick buck you need to learn how to use tools and indicators for technical analysis- unless you really just love gambling. By using a set of trading tools provided by certain websites you can have a look at what other traders are seeing and make an educated decision about when to make an entry into the markets.
Remember that if you are just doing simply dollar cost averaging you don't need to worry much about these kinds of things. Just make a regularly scheduled buy according to your normal interval.
If you are looking to make a larger purchase and want to ensure that you are getting the most bang for your buck then look at longer term trends by switching "Time Interval" or candles on your charts to 4-hour, 1-day, 3-day etc. Since many traders use the same general rules and trading theories to make decisions the charts can be somewhat easy to predict at times. We are all basically playing by the same rules so to speak.
Generally the outlook for Bitcoin prices by the end of the year are bullish with many analysts calling for $20K+ so any purchases at this point will clearly be profitable. The experts all agree that we are still very early in the adoption phases of cryptocurrencies so we have much more room for growth over the coming years.
Now there is a clear distinction between BELIEF and FAITH in Bitcoin. Institutional investors believe that Bitcoin will become an important financial tool in the industry whereas Bitcoin users have faith that this technology will revolutionize the world. The people with the most money are still sitting on the sidelines holding onto their doubts.
What will the future hold for Bitcoin and other blockchain technologies? We can only assume- but the consensus is clearly in favor of change.
So to conclude I would say the answer to the question "When to buy Bitcoin?" really depends on you. If you are looking to make money short term this can be a very risky investment. However, if you are going to hold long term there is no doubt the prices will increase over time- simply from the networking effect alone. And as always never invest more than you are willing to lose!
Check Out My Last Bitcoin Post:
https://steemit.com/bitcoin/@hotsauceislethal/bitcoin-price-mini-t-a-5-9-2018
Feeling Salty About Missing The Crypto Boat?
https://steemit.com/bitcoin/@hotsauceislethal/how-to-conquer-fomo-fear-of-missing-out
Don't Worry:
https://steemit.com/bitcoin/@hotsauceislethal/bitcoin-s-hype-cycle-is-finally-here
Fantastic Documentary About Relevant STUFF! (MUST WATCH!!!)
https://steemit.com/cryptocurrency/@avii/mind-over-money-documentary
Like Bitcoin But Want To Avoid The Fees?
https://steemit.com/bitcoin/@hotsauceislethal/save-money-when-sending-crypto
Pay No Transaction Fee From Coinbase!!!
https://steemit.com/bitcoin/@hotsauceislethal/no-transaction-fee-bitcoin-trick-using-coinbase
Need A Good Laugh?
https://steemit.com/bitcoin/@hotsauceislethal/what-kind-of-crypto-trader-are-you
Keep A Strong Hand!
https://steemit.com/bitcoin/@hotsauceislethal/bitcoin-s-increasing-dominance-and-shrinking-market-cap
*Never invest more than you are willing to lose and always do your own research before making any investment decisions. I am NOT a financial advisor and this is NOT financial advice- this material is intended for entertainment and informational purposes only. Hit "CTRL + or CTRL -" to change size of chart.
(All pictures are free domain images and/or created by myself with the help of Snappygoat.com, Coinmarketcap.com and Coinigy.com.)
It's always a good time to buy Bitcoin!
Indeed. Especially today after people panic sold their coins and caused a price crash :-D!
Buy the dip!
And don't forget to bring the chips :-D
Lol!
You finally put a pic of yourself here! are those new glasses? lol Nah for real though great post, you needed to do something like this along time ago, if you did i never would of put my house up for mortgage to buy bitcoin @19k
Don't do what this man did- He sold everything for TRON at the top :-X
Great post! I've started off by mainly trading cryptos in the short term as I originally day trade stocks, but have been learning to expand my long term investing game. Good advice especially to DCA the position way too many noobie traders never think to but it makes investing much safer. Buy the dip is also a must, it may seem counter-intuitive to try and catch a falling knife but most traders loose money so why do what everyone else is doing most the time if there is mass buying for too long I'm looking to sell and vice versa. Great post!
Look for a chart like below. The probability for success will be much higher if you can be patient.
Ah the good ol' descending wedge formation. A very bullish sign indeed! Most noobs don't recognize this shape but it is the very bottom of the valley before the climb back up the mountain begins :-D
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