As you may have noticed the cryptomarket isn’t really moving much right now. Price for BTC/USD has hovered between the $6,000 and $6,700 level for about 2 months.
This is a highly unusual occurrence for Bitcoin. The cryptocurrency market is normally very volatile compared to other markets!
When price moves in a range like this, it can be very frustrating. Especially in a market like cryptocurrency, where the major cryptocurrency pairs seem to follow what BTC/USD does.
It’s important in times like these to remember to stay patient. It’s very easy to simply take a trade because you are bored.
You might feel like it’s been ranging forever, so jumping in with a short trade when it’s at the top of the range seems like a good idea.
After all, price has simply moved back down once it reached it!
‘Yea, that sounds about right!’ some would say. But don’t fall into that trap!
You never know when price is going to move again, whether this is up or down. Breaking news could happen and bam. Price shoots up. You lost a trade because you were impatient.
You also don’t know for sure when exactly price is going to hit that lower level again. It could take a whole month before it reaches it.
Do you really want to hold a trade for that long?
That’s a lot of fees you could be accumulating, depending on the broker you are with. Is it really going to be worth it?
So what do you do then? Here’s a few options!
1.Evaluate your trading
There’s no better time to go over your trading results than when the market isn’t moving.
You don’t need to watch your charts. Most likely you won’t have any alarms set. There aren’t any trades you need to check in on.
You can set aside your usual trading time to look over your journal instead. Perhaps your TIC list needs some changes.
This downtime will allow you to really look at your trading results. Identify the things that aren’t working and figure out a way how you can avoid them.
But something a little more fun : try and identify the things that are working. Very often we tend to think that evaluating results mean we have to look at the negatives. That is not the case.
There is power in finding out what is working for you. That’s what you want to be doing more of!
So go grab your journal and find both the bad and the good!
2. Experiment with cryptocurrency trading on lower time frames
If your usual strategy doesn’t produce many trades when the market is moving sideways it’s the perfect time to experiment!
You can switch to a much lower time frame and perhaps give scalping a go.
Of course, do all of this on a demo account and record your results! You don’t want to do crazy things with your actual trading account just in case it goes horribly wrong.
When trading on a lower time frame you do need to pay more attention to broker fees. Some brokers will have fees that are way better suited for low time frame trading than others.
We have a review on ActivTrades which at the moment has the lowest fees with a spread of 30.
3. Explore the forex market
Cryptotrading is very similar to forex trading. Your cryptocurrency trading strategy will also work on the forex market!
If you enjoy trading then now is the perfect time to expand your portfolio!
Don’t know where to start?
Head on over to Nick Bencino’s forex4noobs.com to find out everything you need to know about forex trading.
4. Test your trading psychology
Sitting there staring at all this sideways movement will most likely frustrate you. As a side effect, this kind of movement really does test your trading psychology!
It might help you figure out which part of your trading psychology is the weakest.
Are you finding it hard to stay out? Do you feel like you constantly have to check the charts just in case there is some movement? Thinking of quitting because you hate this wait?
Each of those questions will help you identify what your problem is and how to fix it. Of course, there are a lot of different problems when it comes to trading psychology, so just those three questions won’t be enough.
Spend some time really evaluating your strengths and weaknesses. You’ll come out a much stronger trader.
5. Check out different cryptocurrencies
Most cryptocurrency traders will be trading BTC/USD and completely ignore the other cryptocurrency pairs. Knowing that BTC/USD isn’t moving might spur you on to check out other pairs.
Whilst some may follow the same path that BTC/USD is on, there are a few that aren’t.
Take advantage of this lull in movement and try out something new!
There are so many tradeable cryptocurrency pairs out there. There’s no reason to ignore them.