In this article of Quantvan, we are going to explain two important types of markets which “BULL and BEAR” markets are. what are their differences? and what is the right strategy for each?
TRADING IN CRYPTO
When it comes to trading, many beginners choose to take the plunge without doing the proper research. This strategy will help you to learn the basics of trading in the crypto market. However, it is still pretty reckless to trade with little knowledge. It is an easy way to lose your money quickly.
BULLISH CHART PATTERNS
Here are some bullish chart patterns that you may want to look out for.
Cup with Handle:
this is where the candles on the chart have dipped significantly for a prolonged time, only to begin a quick ascent upwards, with a second assent directly after.
This signifies a possible on-going rise in value.
Measured Move Up:
the candles will begin to rise upwards, pause to rest (where they move sideways), and then continue to climb upwards. The fact that the asset pushes sideways for a significant time is what makes this more bullish than the average ascending pattern. If an asset rises with no breaks, it can be a sign of market manipulation or pandemonium. The fact that investors paused for a moment and continued to invest is a sign of a high-quality coin or token.
Three Rising Points:
The candles rise, then dip, rise again, dip again, and finally rise one last time (this time higher than with previous times).
During each rise, the candles move higher than the previous rise. Even though each accompanying dip is generally viewed as bad behavior, the subsequent rises continue to ascend higher.
WHAT TO DO IN A BULL MARKET?
In late 2017, the cryptocurrency market saw its most impressive bull market to date.
Most coins hit all-time-highs, leading to the entire industry making daily headlines in mainstream media outlets, including the Financial Times. It was a great time to be a part of the community. Everybody thought they were going to be rich. The biggest problem with bull markets is that it is hard to tell when you’ve made the right decision or not, simply because everything is rising in value. You could buy into Bitcoin or some other nameless altcoin and regardless, they would both succeed.
Entering a bull market is a great way to make money. When the bull market ends (and it always does) you are left with poor choices and possibly some losses.
Here is what you are meant to do during a bull market: Take your profits home. Take your crypto to fiat once you’ve made some nice gains. Don’t keep waiting for a higher and higher profit. It might happen, but it’s not worth it. Try not to feel hurt or attacked if your asset rises in value just after you take it out, and whatever you do, don’t enter back into the market just because it keeps growing. It’s not worth it, and it is bad behavior.
Don’t expect it to last forever. Bull markets have a way of feeling like they will always exist. This is because of how the community reacts to them. This idea comes from the thought that once the public gets to know about cryptocurrency, the whole market will be propelled to levels never seen before. This might happen, but we don’t know for sure. Prepare yourself for the fact that it will end. This means both preparations in the form of mental and emotional stability, but it also means monetary preparation. Make sure your bank account and cash flow can handle the end of a bull market.
BEARISH CHART PATTERNS
These patterns are generally the direct opposite of the bullish patterns.
Inverted Cup with Handle:
the candles rise significantly, then start to fall, with a final even steeper fall at the end.
Measured Move Down:
the candles start to drop, pause and push sideways, and then continue to drop.
Traders view this as an abysmal sign as the pause and sideways push makes the drop seem calculated and meticulous (rather than accidental).
Three Descending Points: the candles rise, dip, rise again, dip again, perform one final rise, and then descend further than the previous times.
WHAT TO DO IN A BEAR MARKET?
First, do not perform any immediate reactions such as pulling your investments out of the market. While this may be the best answer, it is always wrong to fall on your knee-jerk reaction in these events.
After having a moment to reflect, you may then recognize that it is still sensible to take your investment out and convert to fiat. if your coin or token drops below a certain number that you set, you should be removing it from the market.
The point is to make sure that you take your money out early enough, but only after you could reflect. Essentially, playing the market is a game. You are not meant to be making any rash decisions, even if they are the right decisions. It instills bad practices. Count up your losses, if there are any, and assess how you are doing financially. If you were lucky and you actually still made a profit (or at least broke even), then there is nothing else to do right now. Use the bear market as a time to research your favorite projects and then to enter the market when you feel more comfortable.