Altcoin trading can be highly lucrative during bull cycles, helping several individuals obtain financial freedom or even millionaire status in some cases. Hopefully, through this series of trading guides, we’ll help our community of Zenfusians better navigate the volatile world of altcoins.
In the first part article, we discussed the importance of choosing the proper exchange and how keeping emotions in balance is vital for any successful trader.
In this new guide, we’ll be exploring several new strategies that will help our community crush the crypto markets.
Step 1 — Determine your goals and exit strategy.
It’s crucial to establish a strategy when entering the market. Do you plan to sell after a particular profit margin? Or when the total market capitalization reaches a certain number? Choose a clear goal and stick to it because it is relatively easy to be swept away by FOMO and greed during a bull market.
A more reasonable approach, which helps minimize volatility and bring peace of mind, is Dollar Cost Average (DCA). This strategy implies selling portions of your portfolio at different times, thus making profits along the way instead of selling all your holdings at a specific date.
Step 2 — Timing is everything.
The market moves in accordance with Bitcoin. However, there are several instances where it is best to hold Bitcoin and other times where holding altcoins yields higher returns.
Although the Altcoin Season Index is not a perfect indicator, it helps to calculate the best time to diversify your holdings into altcoins or to exchange everything for Bitcoin.
Fortunately, the Zenfuse unique panic sell button allows traders to easily follow this strategy by enabling them to sell all their altcoins, from multiple different exchanges, in a matter of seconds.
Step 3 — Risk management
It’s advisable to select only altcoins that have a substantial trading volume. Choosing an altcoin with low liquidity is riskier, as it may be challenging to trade and sell them when there is a lack of buyers.
There are exceptions, however. Investing early on in a project, either through a sale or Initial Decentralized Offering (IDO), may prove to be highly profitable. The hindsight is that these coins lack liquidity after launch, and there is a high risk the project behind the coin fails.
Be highly cautious investing in less established altcoins, and always do your own research before beforehand.
About Zenfuse
Zenfuse is a powerful all-in-one platform for cryptocurrency traders and investors.
It aggregates multiple cryptocurrency exchanges, allowing control of funds via API, and powers up the trading process, making trading more profitable, simple, and stress-free.
Our cross-platform app provides rich analytics of both your portfolio and order history, giving you the ability to control your funds on a mobile device.
