Hi everyone
Im relatively new to trading and have come upon a question that I need to ask...
How do you manage trades between coins when the prices are fluctuating? There has to be an optimal time to put trades through in order to maximize the profitability of the trade?
Is it something as simple as looking for situations where the coin you are trading away is up, and the one you are buying is down? Or are there other ways to look at this?
thank you for your help
Okay this is a very complex question.. and needs to be dissected some..
First of all as a general rule, eliminate the USD value of a coin.. it is irrelevent and will get new traders in trouble.. if you lose relative btc value even if gaining USD, its a bad trade.. it means that you would have made more money hodling bitcoin over buying an alt coin so first off just eliminate that piece..and eliminating the USD part of trading makes the strategy more simple.. did i make more sats in this trade per unit sold? yes? no? easy question to answer and track.
Managing alt coin trades can be very tricky.. but also the easiest to get the bigger percentages right.. when bitcoin is going up or down, alts will fall... when bitcoin is moving sideways, alts will moon.. so when trading alts against BTC the very FIRST step is you have to have the charts for your alts open AND BTCUSD tradingview open and understand that alts don't move independently.. You could almost just trade alt positions based off of what BTC is doing and with just that piece would make money as long as your entry is good.
heres a link to tradingview for bitfinex btcusd, I chose this price because imo its the most average and allows margin trading so that calculates in blah blah blah
https://www.tradingview.com/symbols/BTCUSD/ use this link and goto interactive chart, seriously you should be aware of this price all the time when trading.. more often than not alts move with what bitcoin is doing.
Is it something I look at where what you are trading is way up and the one you are buying is way down? Yeah pretty much, if you are day trading you need to look at more but this is pretty much position trading at a glance.. sell green into red.. don't over think it, as a base line it really is that simple.. if you are day trading or trying to min max your position you may want to confirm red reversal so you don't get cut by the falling dagger but thats maybe outside the scope of your question.
You always want to hodl bitcoin no matter what the scenario because if bitcoin goes up or down you need to be able to cost correct your alts position.. when trading alts back to btc you have to keep in mind what bitcoin is doing.. something could be in the middle of a bull run and tank if bitcoin goes down even 5-7%...
One last part of your question.. any trade where you are making profit (again profit being gaining BTC instead of USD) will be a good trade.. even if BTC is down currently work on trading alts to multiply your bitcoin position.. you'll be ultimately making trades for your BTC position which you'll eventually sell in a BTC/USD moon cycle.. and the current conversion rate of BTC/USD of an alt trade doesnt matter.
