#TradingTypes101
Today we'll be discussing Spot Trading and one of the best strategies when using Spot
Spot: This involves investing in a coin or token & just holding until a target price is reached.
Spot trading is slower and less intense than the other forms of trading & for me is the best strategy for a beginner
The risks involved in Spot often come with a trader not carrying out proper research before investing in project as lot of tokens have been known to lose up to 90% of their value even in Spot
To make the best of Spot trading, carefully pick out a few well researched token & follow them up
You can pick up to 20 tokens over a period & continue to eliminate & trim your list until you arrive at between 3-10 tokens you can hold with some level of conviction, then you DCA
Dollar-cost-averageing (DCA), it's a practice of continuously buying a particular token over time, sometimes spanning days, weeks or even months
It's best to start DCAing at a good support level that's been tested over time, when the token has lost significant value as early investors continue to take profit & the tokens drop in price
Before investing, monitor how well your target token recovers & appreciate in price after a small dump
Look out for how it dumps during market sell-off. A fast unusual drop in price will often signal some level of manipulation & that's a token you'd definitely want to take out of your list
Watch the performance of a sector or niche e.g. AI or meme, gaming or infrastructure. Currently, I prefer AI, AI memes & AI infrastructure or a token that combines these niche. Example is $VIRTUAL
One major reason people avoid Spot is the amount of funds they have available to trade. Smaller investor tends to go after leverage trading and trade with anxiety, a terrible combination!
In my next post, we'll talk about Margin trading
We can't end without talking about the primary risk of crypto trading; the fact that one could lose all their money without getting them back forever.
Let me know in the comments what you think
Cheers!
