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The concept of AVERAGING and how it can benefit if done right

Discussion in 'General Discussion' started by Arpit, Jun 13, 2018.

  1. Arpit

    Arpit Scholar

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    I have particularly been fond of Averaging - both in case of winners as well as losers.

    Here is how it works:

    Let's say you take a position or open a trade in Bitcoin at $7,200 considering that this is a low point and it can go around $9,500 in the next 1 month.
    You have a total of $15,000 to invest. So, you buy 1 BTC at $7,200.

    Now the market comes down to $6,100. And you feel that this is the lowest it can get.
    So, you buy BTC of the remaining $7800.

    This is called averaging your position. IF done the right way, this can work wonders. And can turn your losers into your winners.
    Works both in trading and an investment.

    The above technique that we did was averaging your losers.
    I particularly practise this at times when faced with FOMO. Has worked for me until now.

    Anyone else using this in their daily investments/trading etc?
     

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