Post
Topic
Board Trading Discussion
Re: natural constant: high Risk = high reward
by
blackhawkeye1912
on 23/08/2018, 12:55:30 UTC
buy the bottom don't buy the dips
Lol.  I think everyone would do this IF they could easily tell the difference between a dip and THE bottom.  In practice, very few traders ever get this one right--and that's not surprising, since nobody I know of has a functional crystal ball.

When I took corporate finance in college (one of just a few economics classes I elected to enroll in), one of the major points was that for riskier assets, a higher rate of return is expected.  That makes sense.  That's why a savings account in your local bank doesn't pay a lot of interest.  That's why junk bonds pay such a high interest rate.  It's been a long time since I took that course, and I don't know exactly how this principle applies to bitcoin, but it's definitely high-risk.  It has the potential to be high-reward, but that certainly isn't guaranteed.

You made a good point on that, its really hard to differentiate dip and bottom. I think it's better to buy in a series of dips. From there, the average low will be achieved. Don't buy in a single transaction, better to distribute.