Dear Xard may I know the reason why you don’t recommend bitcoin? I personally like and trade Btc only as I don’t have to worry about market closing and opening as well as volume/liquidity.. I personally trade on m1 only but follow the trend of both m30 and H1… so far after testing on all forex pairs and indices.. Btc has been the best so far
Re Bitcoin, The main reason that I do not trade Bitcoin is that it is not backed by any security such as gold and can easily move thousands of dollars in the blink of an eye. Your account can make fantastic growth over a short period of time and it can be wiped out in a heartbeat. If you do trade Bitcoin I would suggest that you remove at least one third of your fund after each mega win and place that money in a safe harbour elsewhere in the event of a total catastrophe then you would at least have funds to start over/continue your trading. (albeit with a different broker).
Your concerns about Bitcoin's volatility and lack of backing are valid. Bitcoin's price can indeed fluctuate dramatically in short periods, sometimes by thousands of dollars. This extreme volatility is a major risk factor for traders and investors.
You're correct that Bitcoin is not backed by traditional assets like gold or government guarantees. Unlike fiat currencies, cryptocurrencies operate on decentralized networks without central bank control.
Your observation about the potential for rapid gains and losses is accurate. Cryptocurrency accounts can experience significant growth quickly, but they can also be wiped out just as fast due to the market's volatility.
Your suggestion to remove a portion of funds after significant gains is a prudent risk management approach. This strategy, often called "taking profits," can help protect gains and reduce overall risk exposure. Placing some profits in a "safe harbor" aligns with the principle of diversification, which is crucial in managing investment risk.
It's worth noting that while volatility is often seen as negative, it can also present opportunities. Some investors view Bitcoin's volatility as a potential for high returns, although this comes with increased risk. The Sharpe and Sortino ratios for Bitcoin from 2020 to early 2024 suggest that investors have historically been well compensated for taking on this volatility risk.
However, it's important to understand that cryptocurrency investments face additional risks such as:
Unclear valuation: Unlike stocks, cryptocurrencies lack traditional financial metrics for valuation.
Hacking risks: Cryptocurrency exchanges and wallets can be vulnerable to cyber attacks.
Regulatory uncertainties: The regulatory landscape for cryptocurrencies is still evolving.
If you do decide to trade Bitcoin or other cryptocurrencies, your strategy of securing profits and maintaining a separate reserve is a sensible approach to managing the inherent risks. Additionally, never invest more than you can afford to lose, and consider seeking advice from a financial professional who understands both traditional and cryptocurrency markets.
Xard777
And yes, the chart looks awesome.
And so does Gold.
