Hello again, I’m back with a little more information about my strategy. Firstly I must point out that none of what I write should be taken as financial or investing advice. I trade in Crypto out of interest, I don’t make a living from it and I am no expert in the matter. As I said previously, I started trading back in November 2021.
The stratgey I chose is the scalping stratgey, to make many trades of small amounts, selling at small profits but always selling at a profit. The difficulty with my method is that you can end up with trades that last longer than expected and drop in value. This is the nature of the volatility of crypto. However, there is a setting in CryptoHopper than can be used to remedy this situation (somewhat). DCA (Dollar Cost Averaging) is what I am talking about.
DCA is a group of settings that are applied that will double or triple your stake in a coin if it drops a certain percentage. For example, I buy $10 worth of a coin and its value drops by 10%, meaning I am at a loss of 10% of this coin so the current value is now $9. If triggered I can double of triple down (in my case I triple down) and I now buy $18 of the same coin at the reduced price. This process increases my stake in the coin and reduces my loss percentage. This means that I don’t have to wait as long for the coin to recover the 10% loss before I complete my trade.
The risks are the price of the coin can continue to go down and I DCA a second time. if this is repeated with a number of coins you can find your cash reserve depleated very quickly. Leaving you with little or no cash for new trades. Yes, it is a risk but it can keep your hopper clear and active, if you allow the correct amount for reserves. Finding the balance is a challenge (so far). For more information on DCA visit the CruptoHopper page – https://docs.cryptohopper.com/docs/explore-features/dca/