After a significant drop in the price of the cryptocurrency, when it has bottomed out but it is uncertain whether it has reached the lowest point, if we buy at this time, we are afraid of being trapped if the price continues to drop. If we do not buy, we worry about missing out on a potential upward trend. In this case, we can use the pyramid trading method.
For example: A certain cryptocurrency drops to the position of 10U, we buy 20% of our position. If the price drops to 8U, we enter with 30%. At this point, the average cost is 8.6U. If the price continues to drop to 5U, we enter with 40%, bringing the average down to 6.5U.
If the price rebounds to 6.5U, we break even. If it rebounds to 10U, we make a profit of 3.5U. However, if you buy in fully at 10U, when the price returns to 10U, you have just broken even. During the price increase, the lower the price at which you buy, the larger your position should be, and as the price gradually rises, your position should gradually decrease. This method of entry belongs to right-side trading. This cost is relatively safe; even if the market drops, as long as it does not fall below the holding cost, there is no need to panic.
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