If you'd prefer to read a summary, then you're in luck. I will tell you the secret to buying volatile assets like Bitcoin (BTC), Ethereum (ETH), and Dogecoin (DOGE) at their all-time high, and still making money.
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But first, a thought experiment...
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Why would financial advisors and big banks not want you to know this simple trading rule? 🤔 The answer might shock you. We'll discuss at the end.
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The Lie They Sold You: "HODL"
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If you browse forums like Reddit, you'll see every investor say the same thing over-and-over again...
- HODL! (Hold on for dear life)
- Diamond 💎 Hands 🙌
And a bunch of other crap that's designed to make you lose money.
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Don't get me wrong. If you're throwing money into your 401K and buying ETFs like VOO and SPY, then buy and hold is an excellent strategy.
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Buy if you're buying Bitcoin or NVIDIA and your plan is for them to go straight to $1,000,000, then I also have a bridge to sell you.
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We know this will (likely) not happen. And, if your goal is to buy these assets at their all-time highs, then you are very likely to lose money when they pullback.
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History doesn't always repeat itself, but it often rhymes...
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"Buy and Hold Bitcoin" from October 09, 2021 to October 09, 2022
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Now, if you implemented SIMPLE trading rules, you could get exposure to these volatile assets easily, and still make a lot of money.
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And, you'll also dramatically reduce your risk.
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As simple as it sounds: Buy low, sell high
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Below is an example of simple trading rules you can use to buy volatile assets at their all-time high and still be profitable.
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Buy Condition: If I have less than $100 of Bitcoin OR my Bitcoin positions are down 20% or more, buy 20% of my portfolio value in Bitcoin
Sell Condition: If my Bitcoin positions are up 10% or more, sell 5% of my portfolio value in Bitcoin
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With these two rules, you'll go from making devastating losses, to modest gains. For example:
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"Grid Trading Bitcoin" from October 09, 2021 to March 23, 2024
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Now, these rules are no guarantee. If Bitcoin crashes to $100, you're still going to lose a lot of money. You'll just lose less than you would've lost if you bought and held it as a lump sum.
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Similarly, if Bitcoin does go to $1,000,000 tomorrow, then you would've been better off buying it all in a lump sum.
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But it's important to recognize the risk of doing such a thing. If you can afford to hold on to Bitcoin if it revisits its low, then by all means.
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But if you're more risk-averse, or your goal is to try to make the best decisions possible, then you need to learn how to implement simple trading rules like the above.
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Now, why would the big banks and prop shops not want you to know how easy it is to implement simple trading rules that work really well?
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Maybe its because the more knowledge you have, the less you'll need their financial advisors...
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Maybe its because they NEED you to think that its too hard, so that you can hire someone to do it for you.
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But, do these rules look that hard to you? You tell me...
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Disclaimer: The content provided in this post is for informational purposes only and is not intended as financial advice or a recommendation to buy or sell any securities. I am not a financial advisor. The insights and analysis shared are meant to demonstrate the capabilities of NexusTrade in automating financial research. It's important to conduct your own due diligence and consult with a professional advisor before making any investment decisions.
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