The Market Just Tanked

The Market Just Tanked

OK, so the market just tanked, and you’ve blown right through the bottom of your Bitsgap range and you’re wondering what the heck to do now? I feel you!  The first time I watched this happen I freaked out and I sold out of everything and walked away for a minute thinking – Wait! what the heck have I just done! 

Oldest rule of investing – sell when the market is up and buy when it’s down. OLDEST RULE!  So, try not to sell when it’s down…

Take a deep breath. Calm down for a moment.  And try not to do the opposite of the oldest rule in investing… Now, if you need to sell out, then you probably risked too much of your own cash and were in over your head. Just have a think – did you really do that? Aren’t you able to manage this loss? Having said that – if it is too much for you to manage, then fair enough… But your fix is to sell out ONLY what you need to sell so that you don’t continue to be in over your head. …OR BETTER YET, don’t sell anything until you’ve reviewed your options below. You have a bunch.

What to do when the market is down, and you now find yourself with no more cash left to fund your bot – you just own a bunch of crypto that is tragically worth less-and-less every second… Ouch! (Fear not, there are some solid options).

Let’s look at your options:

  1. You can stop your bots, sell everything, and lock in your losses. …then run home to mommy (this is not a great idea but sometimes you just need it to stop. OK). 
  2. You can sell out a little bit and lock in only some of your losses …live to fight another day with what is left (this is a slightly better idea). You could restart your bots with what’s left…
  3. You could stop your bots altogether and sit out for a tick or two (I don’t recommend this option because it costs you nothing to let your bots stay on – perhaps the market will bounce back up and you will get out of trouble).
  4. You could stop your bots, sell out of your crypto and the restart your bots with a lower downward range. You will lock in your losses, but you’ll also be back in the game making your 1% per day (keep on Tezing right?). I suggest you keep reading…
  5. You could get a little cleverer… Stop your bots and start new ones with the following tweaks:  This time keep the upper range where it was before, then extend your lower range well down to cover the entire market drop and a bit more just in case.  This is an interesting option because you will effectively suffer three negative effects: A. You will now be selling off your crypto at a lower price than you bought it, for all sales in the lower range. You will lock in some losses… On the other hand, you will still be making bot profits and you will also be selling your crypto for a profit if the market ever moves back up above the (~)midpoint of your range. B. You don’t have any cash left, so you will have to sell some of your crypto to fund the entire lower range that lies below the current market price… Again, at a locked-in loss (BTW – your bot will handle this sale for you). C. The distance between your grid lines will be elongated as part of the stretching downwards – meaning you will trade less often and probably generate less bot revenue than your earlier range. Having said all of the above – I personally like this option because the goal is to be in the game and making your 1% every -single – day, come hell or high water… And this option keeps you in the game at a rationalized loss to some smaller portion of your crypto. And, if the markets come back into your top range, then you will be dancing again like nothing ever happened.
  6. You could get really clever… OK, so all of the market is down, right? And you now own a bunch of crypto and have no cash? Next question is, what crypto is it that you now own? If you followed my suggestions and started by trading BNB and ETH then you may just own a lot of either of those coins… Maybe you have some BTC too…?  Well, then you are in luck! Read on:

You can use BNB, ETH and BTC just like you were using USD, GBP BUSD or USDT.  Start up a DOT/BNB bot! When the markets are way down there is so much volatility that these bots may just earn your 1% every couple hours!  Instead of crying about your portfolio loses, you can start earning more and more BNB, ETH or BTC. Then, next time the market is up – you might find the $10 you made in BNB that day is now actually worth a lot more like $50. And you can sell out your profit.

6B. This is a bonus round corollary to number 6 above – it is for people who find they don’t have any BNB, ETH or BTC. OK, so you didn’t follow my suggestions – that’s ok.  Here’s what you do: first, look at https://coinmarketcap.com and find out which coin (BNB, ETH or BTC) has dropped closest percentage-wise to what your coin has just dropped. For instance, if your coin (lets call it OOPS) has dropped 20% and ETH has also dropped 20%, then ETH is your new best friend. Go into Bitsgap and start a new bot between your coin and ETH (in this example – OPPS/ETH). Bitsgap will sell your OPPS to buy the ETH you need to get started. Now hold on! I’ve told you not to sell when the markets are down – right? Well, in this case, the market between your coin and ETH is NOT DOWN. Relative to each other, they are both in the same place they were yesterday. So, you are simply trading at parity between your OOPS and ETH. Lucky for you, they will likely both rise and fall together all day long.

They will also do so at slightly different times…. Meaning you will still be making your 1%! And you won’t lock in any permenant losses.  Hopefully, both coins go back up together, just like they both dropped together. Ultimately, you might reclaim all that value and be the beneficiary of all your bot trading revenue. 

OK, so to recap – you are always in business to make your 1%… And I’ve given you a couple great options to make sure that keeps happening even when the market is down. And you’ve learned a couple important lessons: 1. This market is very volatile! Are you ready for the ride? Did you feel sick watching your portfolio’s value drop – or were you comfortable with the risks? If you felt sick, then you are playing with too much money – take some off the table until you feel comfortable. 2. Always make your 1%. You should still come out ontop in the long run as long if you keep tezing. Keep in mind, 1% means you will double in 70 days (check out this calculator if you ever doubt the power of compounding interest). 

If you double in 70 days, then this little blip – even a loss of 50-60% is only going to be a reality for a couple weeks at most. You should dig out before you know it.

Happy Tezing!

-As Always – Choose to do what ever you like – these are just ideas. TRADE AT YOUR OWN RISK. NOTHING SAID HERE IS AN INSTRUCTION, JUST IDEAS – WIN, LOSE, OR DRAW, YOU MAKE YOUR OWN DECISIONS.

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1 Comment
  1. Some great advice here Rob. Enjoying reading it and the ride so far! Thanks.

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