Currently the crypto market is undergoing a correction, although it is still relatively small, this seems to raise concerns among investors.
However, it should be remembered that correction will always occur in financial markets so that appreciation will occur in a healthy manner.
In this article, therefore, we will provide some suggestions and insights to take advantage of current corrections for future gains.
There are several ways to take advantage of correction movements that occur on a large scale.
1. Buy
It is best to buy during a market correction, but using several methods.
When the market corrects, the majority of investors, especially new investors, generally new investors, tend to experience fear and worry.
This is because of concerns about buying when prices fall and worries about prices continuing to fall deeper.
But what you need to know is that the higher the price, the higher the risk of loss.
This sentence is likely to start mixing in the dictionary of investors, especially early investors who are only tempted to pursue profits.
However, these terms are necessary to know so that when you believe in the fundamentals and future of an asset, corrections can be used as opportunities to buy.
On the other hand, high asset prices are also not an obstacle to buying, but it is important to understand that purchases should be made after a personal analysis.
Besides that, what you need to know is, if you want to buy, ask yourself first.
Ask yourself. If this crypto is further corrected by 30%, will you continue to buy? Or will you be afraid and panic?
If the answer continues to buy, it means you believe in crypto fundamentals, and a correction is not something to worry about.
Therefore, fundamental analysis also needs to be done before you make a purchase, which is also to convince yourself.
How to Buy When Correction
Correction itself can be used as a buying opportunity because correction is a natural thing so that appreciation occurs in a healthy manner in the long term.
One safe way to buy during correction is Dollar Cost Averaging (DCA) where you can make purchases in stages.
So when a correction occurs you buy slowly and gradually if you still have funds to invest in the crypto market.
By doing this, the average value of your portfolio will adjust to corrected market conditions and the overall loss will be smaller.
Also, the advantage is that, when the correction is complete, your portfolio value will be higher than that of investors who did not buy at correction but bought at the peak price before the correction.
In this average you can do it in stages so that you do not immediately use all the capital in one step.
Then another security measure is to do the average by diversifying or spreading investment across several types of crypto.
So that when one crypto continues to fall but another goes up, your portfolio is still safe.
2. Open Short Positions in the Derivatives Market
If your intention to buy is for the short term or as a trader, one of the things you can do to make a profit is to open a short position.
This short position is a short position that is generally carried out in the derivatives market, one of which is the futures market.
So to do short positions you have to use the futures market by selling futures contracts.
What's interesting about the futures market is that you don't have to own an asset before selling, so you can make a profit when the market corrects.
In short, the mechanism is that you borrow crypto assets from a broker or exchange and immediately sell them.
When the asset price falls, you buy the asset back to return it to the broker when the price drops, so there is a profit on the buying and selling price.
However, the risk in the derivatives market is also very high, especially if you use leverage or debt funds from brokers or exchanges.
Therefore, it is necessary to do analysis, especially technical analysis, because generally taking advantage of a short during a correction means taking advantage of market fluctuations which are generally very sensitive.
This sensitivity increases, especially if the asset being corrected is an asset with good fundamentals and the price tends to go up.
Keep in mind that this article is only educational and does not constitute an invitation or suggestion for opening short positions while the market is correcting. The risk is borne by each individual.
3. Hold on
The last way is to HODL or hold and leave your investment and don't sell, if you believe in the asset.
This step is especially good if the investment objective is long-term, as a result of long-term movements that will be fulfilled by appreciation and correction.
By doing this, you will avoid the incurred losses if you sell during the correction before the appreciation starts again.
It is best to stay away from apps or digital wallets containing your investment and distract from the crypto market.
In doing so you will avoid psychological worries about selling, even if you believe in the fundamentals.
But keep in mind again, selling is also not a bad thing if you think selling is the right move and according to your original plan.
Keep in mind that this article is only educational and does not constitute a suggestion or solicitation to save your personal investment.
These steps are some of the steps that can be taken when the market is making a correction. You can use this article as additional knowledge but not for making informed decisions.
This is because the mature decision must come from your personal analysis as an investor or trader, because the risk is borne by each of you.