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Cryptocurrencies

Have You Been Living Under A Rock?

Unless you’ve been living under a rock then you will have undoubtedly witnessed the increasing whirlwind that surrounds Bitcoin and Cryptocurrencies. You may be sat on the side lines watching the soaring prices and wondering if you should jump in, you may already have some coins in your possession and be tempted to take some profit.

The recent strong sell off has certainly given a lot of people something to think about, especially if those people purchased their Bitcoins right at the highs.

We have unfortunately have read reports of people taking out high interest loans to purchase multiple Bitcoins at those lofty previous highs. We can only imagine the sleepless nights that are being experienced right now and the subsequent need to constantly check the price in the hope that the losses can be recovered.

We’ve been around long enough to have seen a number of big market events and we’ve also seen how these events can have life changing consequences for those that don’t approach it in the right way.

Typically, when hysteria starts to build up in an instrument people start to act in very irrational ways. Certainly in the case of Bitcoin with stories of people taking out loans only to buy the high. These stories are only too common and it affects people who have been in the markets for a while equally as much as complete newcomers who have seen the hype in the media.

Lessons in history teach us that as soon as main stream media start to talk about a particular instrument the party may be coming to an end. It’s important to remember one key fact, the markets aren’t there to make the masses rich, it simply doesn’t work that way.

Of course, some may get lucky and by sheer coincidence end up buying and selling at very fortuitous points in the market resulting in a tidy profit. Over confidence usually brings these new ‘experts’ back down to earth with a bump.

Whatever your motivations are and regardless of you level of experience you should always approach an investment or trade with sounds principles in mind. This means being able to properly manage your downside risk, engaging in the market at areas of value and having a clear and repeatable strategy. These things don’t come without practice but without them you are purely gambling and sooner or later your luck will run out.

We’re quite certain that a lot of people who are currently purchasing Bitcoin, and other Cryptocurrencies, aren’t applying any of these principles are blindly buying with the hope of making a profit. Many UK based brokers are now allowing speculation of Bitcoin so that you don’t actually have to purchase the coins themselves, this brings us the advantage of being able to short the market if we see the right opportunity to do so.

Check out our video below to see how you could have used some of the principles of our strategy to go long and short Bitcoin.