While trading cryptocurrency can offer the potential for fast financial growth, it can also result in significant losses. The main principle of successful trading involves buying assets at a low price and selling them for a higher price. However, pinpointing the exact high and low points can prove challenging, as even the most accomplished traders have not developed an infallible trading formula.
The art of trading has existed since the inception of financial markets and has yet to be perfected. Gaining a trading advantage in financial instruments can be achieved through various methods such as technical analysis, evaluating fundamentals, or relying on intuition. This requires continuous monitoring and attention, including scouring the internet for ideal trading opportunities.
The “Degen Trading Strategy” offers an alternative approach to traditional trading methods, promising to ease the stress and strain. This strategy involves profiting by purchasing the biggest loser of the day, also known as “trading the dip.” It aims to minimize the time spent analyzing market trends and making trades for traders who prefer to take a more hands-off approach to trade.
To grasp the concept of the “degen” trading strategy, it is essential to note that it is named as such because it does not require extensive analysis to determine which coin to purchase and when. This strategy involves purchasing the biggest loser of the past 24 hours, ideally near the end of the day. It is important to note that this approach has only been tested on Binance Exchange, a cryptocurrency trading platform known for its wide selection of listed coins and tokens. However, it is crucial to keep in mind that this strategy may be considered “degenerate” in nature, and its safety is not guaranteed.
The “degen trading strategy” is not recommended for use on other exchanges as they may have a higher likelihood of listing low-quality coins, also known as “shitcoins,” which could result in potential losses for the investor. The Binance Exchange is considered a safer option as it has a curated list of coins and tokens, which mitigates the risk of purchasing a low-quality asset.
The potential for high returns on solid projects is what justifies the risk of this strategy. A 10–25% price decrease in a single day can be seen as a positive buying opportunity for coins with such stability. In a typical cryptocurrency market, solid projects may experience a double-digit drop in a day, presenting a good opportunity to purchase. However, it is important to note that this strategy may not work in all market conditions and that proper risk management is still necessary. Investors should also conduct their research and analysis to make informed decisions.
Here’s a strategy that can help you take advantage of the market:
Buy one of the top losers of the day, add your desired profit margin, and set a sell limit order or wait for a profitable opportunity. Be patient and wait for the market to work in your favor.
To increase your chances of securing profits during a bear market, you may consider setting a sell order at a price 10–25% higher than the purchase price. This way, you can sell quickly and secure profits, allowing you to move on to your next trade.
It’s crucial to remember that investing in cryptocurrency always comes with risks. Therefore, it’s recommended to use only the money you can afford to lose. If the market continues to decline after your purchase, it’s essential to remain patient and hold on to your investment, which is often referred to as HODLing. You should also only trade coins that you are comfortable holding for an extended period in case the market trends do not favor your position or if you are unable to sell quickly at your desired target. This approach will ensure that you do not make hasty decisions that could result in significant losses.
