A bear market is when the prices of things go down. It’s often used when talking about stock prices or cryptocurrency, but it can also be used when talking about other things such as real estate, art and much more. When there is a bear market in crypto, trader confidence is low and investing/trading is considered risky. In this post, you will learn how to make a profit even when the markets are bearish.
The Basics of a Bear Market
Investors are fearful when prices go down because they think they’ll lose money. However, if you have the ability to see the bigger picture, there are some advantages to a bear market that can increase your profits. A bear market is simple to enter! Many people who think about entering a bear market will say the wrong thing: “I’m scared to buy.” This is actually a very good thing because people usually think they should have more than they do. If you enter a bear market with the right attitude, you’ll already be ahead of many other traders who haven’t done their homework. Even if prices go down, that shouldn’t deter you. A bear market gives you the chance to purchase amazing assets and turn your money into more than you could have made buying when prices were high.
Strategies for Building Wealth in a Bear Market
There are some strategies that can help traders invest in and potentially make a profit from the cryptocurrency market in a bear market. It would be much more difficult for a crypto investor to determine how to effectively invest in the cryptocurrency market than an investor in traditional financial markets. As such, it would be wise to diversify. One should diversify their portfolio into different cryptocurrencies to get the best of each investment.
Pros and Cons to Consider
When a trader sees the prices of cryptocurrency and stocks go down, there is often a rush to buy them. Many see this as the opportunity to get rich quick. As an investor or trader, the best way to handle a bear market is to trade some and hold some. The more you trade, the more that is at risk. With these types of investments, volatility (read more on volatility here) and risk are the biggest threats. When you enter a bear market, you risk losing money. Most investors enter into them for the sake of making money! By buying cryptocurrency at the peak price, you have effectively paid more than the value of what you own. This is the same as buying a stock at the top and then selling it at the bottom.
Trade Settings for Bear Market
To profitably trade cryptocurrencies in the bear market, find below some of the recommended settings when trading with Royal Q bot in the bearish market. In the Trade Settings page, make the following settings:
- First Buy in Amount = 100 USDT
- Margin Call Limit = 28 (Targeting 55% dip [drop in prices])
- Whole Position Take Profit Ratio = 1.1%
- Whole Position Take Profit Callback = 0.1%
- Buy in Callback = 0.1%
- Sub-Position Take Profit Callback = 0.1%
Based on these settings, the total amount required to trade one coin is First Buy in Amount (100 USDT) plus 10% of the First Buy in Amount multiplied by the number of margin calls (28). That is, total amount required to trade one coin = 100 + (10%*100)*28 = 100+280 = 380 USDT.
The First Buy in Amount is equal to 100 USDT because we want to make more profit during the Bull Run (when markets are bullish). However, if you do not have enough capital, you could decide to set it any amount of your choice.
In the Margin Configuration page, make these settings (do not forget to click the Confirm button for the settings to be saved):
Note that the 1st to 4th margin calls are considered as one block of trade known as “Whole warehouse”. This means that profit is not taken until the market bounces back to above the 1st margin call. Therefore, to prevent the Royal Q robot from getting stuck within 1st and 4th margin calls, we set 1st to 4th Margin Call Drop percentages to 0.1 respectively. This way, when the markets are bullish, we take profit quickly; on the contrary, when the markets are bearish, the Royal Q bot quickly starts 5th to 28th margin calls so that we can still make profit even in the dip.
In the Distributed Take Profit Allocation page, set the percentages as seen in the following images; remember to click the Confirm button for the settings to be saved. Now, click the Save button to save the trade settings on the Trade Settings page.
Finally, set the Strategy Mode to Sub-bin Mode Real-time Settlement (for the Royal Q to be taking its fuel fee automatically after each trade). Click the Confirm button for the settings to be saved. Afterward, you can click on the Start Trading button to commence trading.
Note that if you do not have the time to make these settings, you can decide to copy my trading settings via the Royal Q’s Circle section – where you will search for my circle called “FastProfit”. Then click Apply to Join button (I will be notified to let you in). You can read more information on copy trading in the post.
In my experience, most people don’t understand how bear markets affect how they invest and manage their money. A lot of people will make bad decisions in a bull market and wish they would have done something different when the markets were at their worst. There are still great investments to be made in a bear market. When the markets eventually recover, you can count on a much higher return. For now, it’s important to have a strategy for managing your money in a bear market and invest with conviction. Get more information on how to set up Binance account and get started with the Royal Q bot.