- There are 2 types of investment: trading and investing
Investing
- I don't have much but very limited savings, so I have very little capital for investment(the money that I can lose without any effect on my life). And if I use more capital, it will invade my savings money and hugely increase the risk of my life. So the investment may not be suitable for me this time(you much have so much wealth that the money you spend investing to make a huge profit seems little to you).
- However, there is another investing method that has less risk, called DCA. Because it will spread out the purchase, so the time of the market doesn't have much effect on the total average price. This method is much safer for low capital like me. Also, because of less risk, I can put more capital into it.
- But, because I have limited capital(I am unemployed at this time), I will do my DCA within the limited time, just until the big economic event occurs. If it is not going as I planned, I will sell all of them with less risk.
- Another method is to wait and buy at a good price, then hold until the planned big economic event comes out. But this method has more risk if your purchased price is not good enough. So I don't recommend this.
- However, there is another investing method that has less risk, called DCA. Because it will spread out the purchase, so the time of the market doesn't have much effect on the total average price. This method is much safer for low capital like me. Also, because of less risk, I can put more capital into it.
- conclusion: for transfer or investing with large capital, only use the DCA technique within a limited time.
Trading
- Another method is trading. It requires more work and needs to follow the news to keep up with the market breath.
- The information you have is the most important thing in trading. The more you read, gain, or research the news, information, and fundamental details, the better you can trade.
- I used to keep staring at charts and hoping there would be a signal for trade in technical analysis, but it didn't work. I found that the more I stare at a chart, the more loss will occur.
- The more I read and gain information about the things I trade, the more opportunities I get in trade without looking at the chart at all(I've very little time at charts and just look at them only when I want to enter a trade.)
- There are a lot of markets: Forex, Stock, Crypto. You may not need to trade all markets, just trade the market that you have a good source of information.
- Forex: Reuters, Bloomberg, Central Bank announcement & policy
- Crypto: coinmarketcap(has separated news for each crypto),theblock.co, coindesk, cointelegraph, white paper
- Stock: News about the company from reliable sources(eg. Reuters, Bloomberg)
- Again! Know your edge. You don't need to trade the market that you're not good at, because you will lose your profit at them.
- The information you have is the most important thing in trading. The more you read, gain, or research the news, information, and fundamental details, the better you can trade.
- conclusion: speculate only when there are clues with proper risk limits. Spend time on reading and gaining information, do not spend time on charts (it is a waste of time).
For Forex
- Read Reuters as much as you can, analyze, and find the inevitable condition that will make more profit and less risk than any bet with tiring uncertain prediction.
- don't bet on the news(because it is usually priced in), but read and analyze the information and trade if there is the character of continuing or long-lasting consequence.
For crypto
- Holding crypto is just like holding share equities of the business you love.
- Reading as much as you can in what you are trading is the best strategy for survival!!
- Because crypto is usually slow-moving, you must know the factors that will influence in long-term such as Fed money policies(interest rate), the upgrade of the system, etc.
- The most proper strategy is investing with DCA, because there is not much frequency of important news that affects the price.
- It can be short-term traded when you have good reliable news but it is not often.
- But the factors in the short term also have an influence specifically for the particular crypto such as news, trends in the present time, etc.
- For the technique in short-term trading, usually in a bear market, search for coins that didn't change in 24 hours(+/- not more than 1%) because those can outperform the bear market, and then search for news of them individually in coinmarketcap.com and trade them. However, for those coins that are bullish(+ > 1% when the markets are bearish), this method may not always work because they may have already been priced in and run out of demand.
For stock
- use a week time frame
- trade only, no investing because the upside is less than crypto, trade with leverage will provide more profit.
- Also, there are a lot of reliable news resources that are good for trading