The ghost was ready.
Now all we had to do was wait…
It was Halloween day, about a decade ago, and I was hiding in a cramped college dorm that I shared with three other girls.
We wanted to startle a friend who was coming over. So we rigged a tiny, paper ghost to fly in front of the doorway when it opened.
And it worked perfectly. Our friend burst into the room as she always did, and the ghost glided into her face.
Her eyes went wide, and she shrieked, dropping the books she was holding. Papers flew. We laughed. It was a fun moment.
Well, it was for us. My friend was a bit embarrassed.
But it was understandable. After all, when you’re not expecting something, you resort to knee-jerk reactions when it happens (like dropping your books).
But if you’re like my friends and me, who knew exactly what was going to happen … well, you don’t panic. Instead, you get to sit back and ride it out.
Now, you might have guessed that I didn’t just want to share dorm-room antics with you today. That, instead, I’m about to compare this experience to trading.
And you’d be right!
We’re big into preparation here at Banyan Hill. It’s why our analysts always have stop-loss and profit-taking systems in place. It means you’re always ready for what the markets throw your way.
But instead of discussing general trading preparation this week, I want to shine a light on preparing your crypto portfolios.
Prepare Your Crypto Portfolio
See, the crypto sphere is a pretty volatile place. It’s what ensures enormous gains. For example, you might have heard about Ethereum, a blockchain-based platform that allows developers and entrepreneurs to create their own “utility token.”
In 2017, Ethereum saw a big pop (just as bitcoin did). The price of Ethereum went from $8 to $1,400 in January 2018. That’s about a 17,000% jump!
But with volatile jumps come volatile falls.
Ethereum is under $400 today. In fact, the entire crypto space is under pressure. Bitcoin is around $6,600, shedding about $119 billion-plus from its market cap in the first quarter of 2018.
So traders who weren’t prepared for this scare might have “dropped their books,” so to speak. They might have jumped out of this space, when really … they should be buying.
See, soon the tax-related selling in the crypto sphere will be over as April 15 comes around. That’s because some of the recent crypto-selling pressure could be from investors who profited from crypto’s 2017 gains — and now have to come up with money to pay dear old Uncle Sam.
Moreover, March has always been a hard month for cryptos. Bitcoin has only risen in one of the last seven years during this month. (That was in 2013.)
So history tells us not to worry.
But better yet, crypto has long-term staying power, as crypto expert Ian King often says. After all, the total amount raised by initial coin offerings so far this year is closing in on $3 billion. Venture capitalists, hedge funds and high-net-worth investors are excited about this new technology.
And that means greater profits lie ahead … well, for those who don’t get scared and jump ship at the first signs of volatility.
I know — it’s easy to say “don’t get scared.” It’s hard to actually do it.
But you can help control knee-jerk reactions by only investing as much capital as you are willing to lose in the crypto sphere. In fact, only invest as much money as you are willing to lose in a day.
Be sure to have a steady stop-loss strategy in place. And take partial profits off the table when prudent.
That way, you won’t panic when the drops hit. And you’ll be well-positioned to profit in the months and years ahead.
Inside the Crypto Sell-Off
For more information on investor psychology in this market, let’s take a look at Ian King’s latest interview with Cheddar TV on the topic.
Cheddar is a new type of media platform targeted at millennials. It creates digestible news clips that can be easily shared on Facebook, Instagram and Twitter. So Ian was eager to sit down and talk with them about all things crypto.
Here’s Ian’s interview:
For more tips and tricks on profiting from the crypto rally to come, click here to learn about Ian’s personal crypto trading strategy.
Catch you next week.
Managing Editor, Banyan Hill Publishing