Crypto Trading For Profits – Watch The Volatility And Uncertainty Surrounding The Market

When trading crypto as an investment strategy, you are opening yourself up to a world of risk and volatility, yet the rewards can be astronomical. Many traders talk about getting in at the right time, usually early on in a new project. Let me tell you something though. That way of thinking is based on hype in a 2019 market that has seen a slew of ICO ERC 20 tokens that are pumped and dumped.

This investor knows better, and I will use the stock market as a parallel. You don’t make money getting in early on all the IPOs. Some of them tank in a bad way, and you’re better off entertaining IPOs from time to time but focusing on trading well-established securities. Trading options can even make you more money.

With crypto, many of the coins out there don’t have much of a track record, yet. That doesn’t mean you shouldn’t trade them. Personally, I am more of a HODL investor when it comes to crypto. Yet you can use the exchanges to trade crypto so that you’re holding different assets, too.

Trading crypto isn’t just about buying and selling specific cryptos to get your USD. It’s about using the exchanges like Forex. You can take either approach, but I’m hitting on a specific point here. Even people that primarily buy and hold coins do exchange tokens for other ones from time to time.

It’s really difficult to time the crypto market. If you had bought into BAT recently ahead of the Brave Browser 1.0 release, you would have made some good money. But the BAT token quickly dipped back to its normal price a couple of days afterward. You do have to move quickly if you’re going to trade crypto.

XRP looked like it was on the move recently, getting right near 30 cents a token before it went back down to normal levels. It is one of the premier tokens out there on the market, but it is priced at under 30 cents a token. That tells you that another factor that comes into play when trading crypto is that you’re essentially dealing with penny stocks.

Bitcoin of course is priced like Berkshire Hathaway, but the point here is many of the crypto coins have yet to come close to that level. That doesn’t mean they don’t represent great opportunities, whether you trade them or buy and hold them. You can make quick money as a trader, no matter the prices of the coins.

You are just going to get burned from time to time, chiefly because the market is so new and more difficult to manage than the stock market. You’re not going to have an easy time guessing what the stock market is going to do either, but the crypto market is even more volatile and unpredictable.

People often guess that many of the coins are going to move along with Bitcoin on the next big bull run. But that isn’t what happens, and it’s not so cut and dry. XRP at one point was moving while other coins were going down. And as each crypto coin distinguishes itself from others and develops its own niche, the tokens aren’t going to be known for moving together.

Granted, the stock market collectively moves in one direction or another, but that’s based on the DOW. At any given time, there could be some major winners out there, even when the stock market loses in a big way for the day.

Just like with stocks, it’s a good idea to diversify if you’re a trader. The same thing goes for buying and holding of course. When placing trades, you’re going to want to look at charts very closely. Understand that the value of each coin is more relative right now, early on, and it’s not like determining the value of a company’s stock.

You might want to start small as a crypto trader. Take those modest gains as they come, and enjoy them. You will get your feet wet, and you will learn more about trading crypto-currencies. You can then move towards placing larger trades, but just be careful. With a market this young, there’s always money to be lost if you’re trying to profit quickly.

Options Trading – What Should Be Your Approach As A Small Time Investor?

Options trading provides you with leverage like you wouldn’t believe. Buy calls and control hundreds, even thousands of shares at a fraction of what it would cost you to own them outright. That sounds like a great idea, but you’re talking about a risk that is unknown to you just yet if you haven’t lived it already. What type of options trading are you looking to do?

No matter what options you buy or sell, they are able to be traded on the open market. Writing covered calls is more of an insurance strategy on positions you already have, but even those options can be traded. If you sell some covered calls on an underlying position, you can always buy them back at a profit later on down the road.

There are even advantages to trading those types of options, albeit at a slower pace. You may want to book the profits that are on the table, moving the equity to another position. Time and performance are the two factors that influence the pricing of a stock market option.

Buying calls was mentioned earlier as a way to leverage your funds and control more shares of a company’s stock. Yet you can do the same thing when you buy puts. It depends on whether or not you want to hold a bearish or bullish position on a company. Some people do both, as a strategy.

For example, it was announced today that a whale of a trader placed bearish options trade in a $3m bet against Apple. But if you dive into the details, he actually placed both bearish and bullish trades, two of each. It was just that the total of them equaled him entering into a bearish position that signaled he expects Apple to slide about 10 percent in the coming months.

There is a lot to learn when you’re trading options. I recently saw an analyst post about writing covered calls on Twitter stock, in the money covered calls. His reasoning was that Twitter had been on a downtrend lately, and he said the options were priced in a way that you could expect above average returns in the coming months. I did take a look at his theory and the premiums being paid out. I had other moves to make, but it did look like he was onto something.

Stocks can be expensive, so many people don’t make it to the level that allows them to own 100 block shares of companies and write covered calls. When you do get there, you can make more money. That said, a whole world of options trading is still open to you.

Now with less money, you can buy calls and puts, trading them. But you really need to get to the next level and have a lot of money before you start tackling positions like that in the stock market. So it’s like a catch 22 for inexperienced and small-time traders. It kind of equates to the notion that the more money you have, the more money you’re able to make.

That’s not just about balances and compound interest. It’s about the options that are available to you, in this case stock market options. You really do have more tools available to you when you have more money to put in the market. Plus you’re more experienced by that point, so you have a better chance of making the right trades.

Yet the stock market is still unforgiving, and it can really show you a loss at any given time. That’s why you see these big time traders coming at the market from both sides. They might even sell puts and sell covered calls on the same security like the guy trading options on Apple did.

The best you can do is learn and build. Don’t try to tackle the entire options market at once. I’ll tell you where I’m at. I keep learning about all of it, but I’m at the point where I’m accumulating 100 block positions and writing covered calls. If I did that for each stock I have picked in terms of diversification, I would need $100k.

And to move on to the next strategy, I could first entertain writing multiple covered calls for each security at different expiration dates. It’s almost like trading options in terms of buying calls and puts should be left to the people with millions of dollars. You can also visit Trade Ideas Review for more info on this strategy.