Why You Should Never Chase Cryptocurrency Price Breakouts
The cryptocurrency prices are very predictable in most cases, and this has been the secret of most cryptocurrency traders. Most of the successful traders are well knowledgeable in the application of technical analysis using the historical chart patterns to predict the short term price of an underlying cryptocurrency.
Unfortunately, most of the new cryptocurrency traders and investors who know nothing about this complicated analysis either enter the market to trade with their intuition or come out with a simple plan and one of such plans is to chase a breakout.
Most traders and investors are so scared of losing their money, and to be sure that they are not putting their money on any currency that may affect their ambition of hitting the jackpot, they monitor the market and put their money on any digital asset that rise above the constant horizontal line to trade at a fast-rising pace.
Making it from this strategy is interesting, but it is important to understand that chasing a breakout is not a good thing to do in the cryptocurrency trading. When you miss a breakout, count it as missing your school bus.
Running after it can be very dangerous. Interestingly, most cryptocurrency trading experts are not fans of chasing breakout either. Anything that rises swiftly is bound to fall sharply, and the cryptocurrency trading is no exception.
One problem is that most traders are not able to subdue their emotions during cryptocurrency trading, letting greed to set in after taking notice of how they can make a huge profit within a short period.
This thought is always lovely until everything is lost within the blink of an eye. It is risky to chase breakouts because you may end up buying at the peak. Remember that there is a fall after a peak.
What You Should Do Then
Instead of focusing and chasing the breakout, focus on the bottom. From the bottom is all profit, and building profits from there is better than jumping into a moving train. Entering into the market with the idea of making wealth overnight can turn a nightmare. Do not be greedy.
Build your profits slowly, set a daily target for yourself, and watch as you enjoy profit with minimum risk. Better still, you can go the advanced way by learning about cryptocurrency technical analysis, study the chart patterns, choose one and make use of it.
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