THE MENTALITY OF TRADING BITCOIN AND ALTCOINS WITH SATOSHI'S VS USD(or any other currency)

in #cryptocurrency7 years ago (edited)

Hello everyone,

 Understanding how to think about USD vs satoshi's. 

This is my first post. If you are reading this thank you for taking the time and I hope this is helpful in some way.

THE PROBLEM
I started trading the first of this month. After about a week of trial and error. I noticed that even though I was making decent trade, that is buying the dips and selling around the tips. I wasn't making any gains on my account balance in USD. I then looked and saw ETH(which is what I usually trade in) was dropping in price. I searched all over YouTube and Google trying to understand what I was doing wrong. Really, what are you supposed to gage your trades off of?
Let’s say 1 ETH is worth about $1,139, we however only own 0.23 ETH. In this example we use that 0.23 ETH(about $262) to buy 100 of another coin or token. We watch or set our sell those 100 coins or tokens at 0.24 ETH. We just now sold 100 coins or tokens for 0.24 ETH. Which should be a 4.17% increase. But during this trade, the price of ETH compared to the USD has dropped from $1,139 to $1,000. That is a 12.2% drop in the price of ETH compared to the USD. So it looks like we are losing money, right?

THE ANSWER
We are trading with ETH. In that trade we went from owning 0.23 ETH to owning 0.24 ETH. Which is a 4.17% increase in the amount of ETH we own. Not to shabby for a trade, in my opinion.
Now let's look at the price of ETH compared to the USD. In this example the price of ETH dropped 12.2%, from$1139 to $1000. That is a $139 drop in price. How ever because of this trade we softened our drop, kind of like a parachute slows a person falling through the air. Let's take a look at it.
If we DIDN”T make that trade we would have watched our $262($1139 x 0.23) turn into $230($1000 x 0.23), thanks to the 12.2% drop in price compared to the USD.
Since we DID make the trade our $262($1139 x 0.23) is now $240($1000 x 0.24).
The our balance didn’t drop a full 12.2% because our 4.17% took away from that drop only making us drop about 8% in total.
Now when the price of ETH goes back up to $1139 mark we will see that 4.17% gain in dollar signs. Which if we’re honest with ourselves, seeing that dollar sign go up is what makes us feel good inside. Dollars is what we use to pay our bills, and do mostly everything else with right now. Now the future will change. I believe these other forms of payment with be adopted. But for now our minds haven’t changed to that yet so the dollar sign is what makes us excited.
The crypto market is very volatile. We have to train ourselves almost forget the dollar sign while we’re trading and focus on gaining more and more satoshi’s in whatever cryptocurrency you are trading in. If its Ethereum, work on gaining more Ethereum. If its Bitcoin, work on gaining more Bitcoin. Just keep adding to the satoshi’s you have. I personally use ETH for pretty much all my trading. I know everyone has their preferences, that's just me personally.
Right now that market is bearish/stagnant, which means its going down or kind of flat. As long as we HODL and work on gaining that “satoshi power” when the bulls come in and the market goes back up we will have that much more in profits because we built the amount of units we own in the dip.

I hope this was helpful to someone.  It is something that has taken me a month to figure out to the point where I can put it in my own words.  Hope you all have a wonderful day.  Happy Hunting.
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