Investment Strategy

Understanding “Buy the Dips” as an Investment Strategy

There are many things that you need to consider if you invest in cryptocurrency. For instance, you have to understand its basics and learn how to read the charts. It does not end there because you should learn different strategies to thrive. As a beginner in the crypto market, you should at least know one basic investment strategy – “buying the dips”. Browse through for more information.

When you hear about “buying the dips”, it refers to the practice of purchasing coins following a decline in its prices. Many misunderstand it by going all in while asset price is going down. The strategy is safe to use in the bull market. For this market, the general trend is up. With that being said, you should consider the following tips:

You should buy incrementally

As the price goes down, that is the time that you buy but buying should not be done all at the same time. It should be done incrementally. This will create an average position. Your aim here is to buy more as the prices further go down.

You should patiently wait

Another thing that you should keep in mind is to patiently wait until the prices settle. If you see that there is a sign of recovering, that is the point that you can start buying incrementally.

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You should be familiar with buying

There are two things that you can do here – “buy the big dips” and “buy the little dips”. The aim here is to buy coins low but there is a difference between the two. When you “buy the big dips”, you buy when the prices have gone below the average. When you “buy the little dips”, you buy when the prices come down from wherever it was previously. Browse through for more information.

You should understand why it happened

If you consider this strategy, it is crucial that you understand why the dip happened. If you know what happened, you can better measure if you should buy the dip. At this point, you need to check the news to gain more insight into the matter.

You should set stops

As a trader, you want to make the right moves. In reality, there will be wrong moves and when this happens, you are ready to stop the losses.

You should understand what market you are in Dips in a bull market can last days and the rallies in a bear market can also last several days. Traders know that you should avoid being a bull in a bear market or being bear in a bull market. The trick here is to understand what market you are in to make profits.

For sure there is money in crypto – if you know what to do. To know more about the crypto market especially ICO (Initial Coin Offering), it is essential that you join communities. You should join Telegram or follow Twitter traders for signals. If that is not enough, you can consider However, you need to be careful about shilling when you join Telegram or follow Twitter traders. Shilling is a phrase that refers to the promotion of coins for personal gain.