Long term trading, or Short term trading? Which is the key to large and continuous profits?
By short-term, I’m referring to trades that exist over a duration of 1 minute to 24 hours. Long term, 24 hours and longer.
Short term trading is a fools sport, and I’ll tell you why.
Taking a short term view on price movement is nothing other than a futile attempt to force an opinion on the market – which will always be a losing proposition.
You see, in order for the flood gates to be forced open, allowing an endless stream of BTC to flow into your hands, it is necessary for you to understand that it is impossible to win when approaching the market with a short-term mindset.
The very nature of the market exposes the fact that those who are prone to taking short-term positions, are consistent losers. This is the crop of traders that ensure that skilled players make more money each and every month – simply because these short-term swing traders just won’t stop making the same mistakes.
I have mentioned many times that success in this market can only be achieved by 1. Exploiting Price Patterns and Market Cycles, 2. Exploiting Price Patterns and Market cycles.
You see, there is a natural flow to the way prices move, and every coin exhibits its own unique behaviour in terms of recurring price points, repeat percentage gains and similar percentage declines.
No matter which coin you’re trading, there always exists a long-term trend (assuming that you’re trading the most optimal coins.)There always exists the smallest subset of traders who use this long-term trend to amass piles and piles of bitcoin on a daily basis – whilst the uninitiated stumble around the market like lost sheep, cumulating loss after loss.
If you were to spend just one hour analysing the charts, you will quickly realise that It is virtually impossible for a short-term trader to pull big money from the market on a consistent basis.
In a previous post, I demonstrated the differences between trading and gambling, pointing out that trading is a venture that requires calculation – whilst gambling is a venture requiring nothing other than misguided hope. The rationalization was that altcoin gamblers, actually believe that trading is gambling, and so they ‘act as if’ this is a fact.
Short-term trading is the gamblers thought process manifested into tangible action.
You see, a short-term trader is basically someone who spends the majority of their time betting on the ‘continuation’ of price moves that have already occurred.
So I throw this at you…
Just spend one hour analysing the charts of maybe five coins that have had multiple high volume rallies in the past. You will see many recurring cycles but, more importantly, you will find that it is impossible for a short-term trader to:
1. Make large amounts of money
They only buy after major price moves have begun, so have no opportunity at all to accumulate a reasonable portion of that coin without pushing already marked-up prices even higher, and then adding to upward resistance when it comes time to place their own sell orders or adding to downward momentum when they dump out after realising their error. (Bull Trap)
2. Be consistent
Many short-term traders make money periodically, but so do slot-machine practitioners. To have real staying power in the market, your strategy must have some element of consistency. Because short-term traders only adopt this strategy because they aren’t aware of the “bigger picture”, the issue of market timing isn’t something that they apply to their trading decisions. These traders will only buy when they feel most comfortable – which is when prices are moving upwards – so this one fact “prices are going up” is what gets them into a trade. So they literally buy into coins without knowing what the outcome of their trade will be – leaving them open to extreme cases of “the jitters” at only the slightest sign of an adverse, but insignificant, price movement. Sure, there are those people who sit in front of slot machines all day who may see 4 cherries line up in a row, providing them substantial winnings – but the question is, how many losses did they incur up until that point – and how many losses will they incur in the future trying to crank out another jackpot?
3. Grow as a trader
A short-term trader believes wholeheartedly that trading and gambling are one and the same. So they act as if the taking of small position sizes (0.002BTC, 0.04BTC, 0.1BTC etc) is proper trading etiquette. I always tell members that it is a must the risk to reward ratio is low:high because this allows the freedom to take advantage of other opportunities that may arise, whilst simultaneously generating adequate sums of money. Those who put on small 0.09 BTC trades are fooling themselves, they think they’re risking low amounts of money for a high reward thus being extra intelligent and prudent – however, their ratio is actually low:low. You see, a 1000% gain on 0.09BTC is only 0.9BTC…. whilst a 1000% profit turns 1BTC into 11BTC – a major difference. A low:high risk reward ratio allows traders to build their trading fund to a point where they are able to adequately take advantage of multiple market opportunities at the same time and make staggering amounts of money in the process – whilst those extra intelligent, extra cautious 0.1BTC traders merely spin their wheels and remain stagnant.
Guys, Short-term trading is a fools sport.
Just by looking at the charts, you will very quickly realise that most rallies erupt over the space of several days at a time. Some moves take several weeks or even months before the market turns around.
The big money is being made by those who understand market psychology. By those who understand that price patterns and market cycles are the keys that unlock the floodgates to profit.
If you have been taking these non-advantageous short-term trades, I hope now you are aware why you have been accumulating loss after loss. It may be time to rethink your approach.