Within the cryptocurrency trading world, there are a variety of methods or mindsets to buying and selling the digital asset. Generally, users fall under three types of mindsets; a trader, gambler, or a spectator. A trader is a person who generally takes risk and reward deeply into consideration. A gambler, on the other hand, is a person who acknowledges the risks and rewards but is far more inclined to taking higher chances on trades to result in “hopefully” much higher rewards. Finally, a spectator is someone who might or might not know what or how cryptocurrency works. But they choose to observe this space while gathering knowledge. This type is often too cautious to buy into cryptocurrencies due to the high volatility associated with this asset as well as the lack of knowledge on the subject.
The trader mindset
The category of crypto users that fall under the idea of a Trader mindset limits their risks. But they usually don’t generate high rewards like that of a gambler. Alternatively, their risk appetite is also comparatively low.
They generally trade with a calm demeanor and take time to decide whether a trade would be within their risk and reward limits. They don’t generally hold their eggs in one basket so to speak. Traders often diversify their portfolios across various common and trusted cryptocurrencies. Traders take into account their own experiences along with trusted methods and trading advice from experts. They trade as often as daily or as little as weekly. However, they always stay on top of their investments with an aim to generate steady returns with minimal losses. The majority of the active cryptocurrency traders can be found or allocated somewhere within this mindset.
A gambler has a high risk appetite
A gambler’s risk-to-reward allocation is vastly different from that of a trader’s as they generally sacrifice higher risks for higher rewards. A gambler relies more on intuition and “gut” feeling when deciding on trades. They expect a certain cryptocurrency will rise quickly after the trade. They can often trade every day or weekly like a trader. However, when the price of a cryptocurrency is in decline, a trader could generally pull out the investment from that coin to limit their loss. A gambler would rather invest more or keep the original investment, expecting a larger upturn. Gamblers can also become involved in trading unbacked cryptocurrencies on other exchanges. This might mean they eventually end up with a variety of “worthless” or “unknown” coins.
The gambler community may be smaller in number due to the high risk to reward opportunities. But this community stands to experience breathtaking highs as well as depressing lows.
A spectator is like a window shopper
The final mindset is that of a spectator. Most spectators in the cryptocurrency world aren’t even invested in cryptocurrencies. However, those that are, don’t pay as much attention as a gambler or a trader. Most spectators first heard about Bitcoin during its steep climb back in 2017. Then, a single Bitcoin had reached a whopping $20,000. This stellar rise gained many people’s attention. It meant simply holding onto a coin could net tens to hundreds of thousands of dollars. From that point, the crypto world was widely covered in the mainstream media and Bitcoin even became a common household term. The broad majority of spectators never buy a single bitcoin but always watch whether a cryptocurrency will fulfill the prophecy to become the currency of the future.
The other minority of people who watched cryptocurrency during the boom actually bought into the market around that time. Some bought in during the peak only to watch it fall and they generally lost all interest along with their investment. Others bought in later on and held their coins. They generally have little intention of selling them. Instead, they may casually watch the market over the years to see if their investment will one day reap them with high rewards.
CoinSmart can help a trader, gambler, and a spectator
These are just broad categories and it’s quite possible to fall outside the scope of this classification. Irrespective of these categories, it is important to know and understand your trading style. This in turn will help you plan your investment strategies. Here at CoinSmart, you can be a trader, gambler, or spectator as we have the tools that can be used to take full advantage of the market and your investment future. For newer users or for those quick trades CoinSmart offers simple smart trade that will allow you to quickly and simply trade your cryptocurrencies between any coin or CAD. If you’re an advanced user or a day trader who likes to use charts, setting specific trade limits or stop losses, CoinSmart has extensive advanced trading features. No matter your investment mindset or tactics take full advantage of the market with their wide variety of tools and active support.