Bitcoin Forum

When I first started to invest I used to panic whenever the market dropped by a few dollars, now I've started to enjoy the drops. It provides an ideal opportunity to average down, something I really should have learned about earlier, but glad I did eventually. For those who don't know what 'averaging down' is, it is buying more coins (in this example anyway, but works in exactly the same way with regular stocks) when the price drops to bring down your average buying price, therefore lowering the price at which you can cash in a profit. Using Bitcoin as an example...

1. Bought 1 BTC at $18,000 back in January (aaaarrrgggghh, unlucky...)
2. Price of Bitcoin drops to $9,000 (aaaarrrggghhh, why me...) - your $18,000 of Bitcoin is now only worth $9,000 and you cannot make any profit until it gets back above $18,000 - or can you??
3. Buy 1 BTC at $9,000 (clever, buy the sh*t out of that dip) - your average price paid for 1 BTC is now 'only' $13,500
4. Cash in profit at any point above $13,500 (champagne corks popping)

Obviously there are additional factors to work into this, as it would normally be worth making more than one extra purchase as the price drops to get a better average and to cover any sudden bounces back up, but it definitely makes market drops easier to swallow. It also emphasises the need to not put all your eggs in one basket and make sure you have the funds to buy 'if' (translates in cryptospeak as 'when') the market falls. Deciding when you make these averaging down purchases is the key, as no-one has unlimited funds to keep buying more if the market keeps dropping, but plenty of research and use of technical analysis will go a long way to helping pick out buy points.

There are unnecessary things that commonly did by the new traders:
1. Buying coins in its peak.
2. Selling coins during bearish period.
We all know that they are commonly the mistakes of new traders specially when there is a big dump and speculations in the coin they hold. But I know that we will be mistaken in our first trading but for sure, we will be more expert on holding dump when we our in amidst of our journey in trading.

Averaging down is a tactic that everyone needs to use at some point. Eventually you will buy a high by mistake and being able to average down your position makes it much more likely you get out in a positive.

The difficulty is that most people don't have spare fiat to continue to invest. It's sensible to only invest about 50% of what you are willing to invest so that you always have fiat spare for such a scenario but many of us don't do that (myself included)

You are right, take the downtrend as an opportunity for you to go and buy more coins, don't be sad and feel sorry when the price is going low it is just normal, just make things go with the flow and take every negative as a positive way.

Averaging down is a longtime tactic that is used with shares trading. It is sensible to use the same method with crypto buying.

Yep, the mentioned tactic certainly is better than selling stuff in a fit of panic when the price goes down. Not advisable to do this with some random shitcoin as it could turn out to be a bottomless pit, but in the case of BTC it is actually a reasonable thing to do. I've implemented this tactic since a year or so and it beats the buy high sell low shenanigans for sure.

Drops are indeed opportunities. My plan was to accumulate as many coins as possible below the $10,000 mark, but got surprised by how quickly the market recovered back up to even nearly $12,000 again.

I was a little bit disappointed because my sub $10,000 accumulation goal was no longer applicable. Right now I am happy that I can start accumulating again, but have to wait for my wire transfer to post.

I like how you understand the importance of having fiat aside, because the far majority of the people either choose to go all in or all out, which is never a good idea. It severely limits your options since you depend on just one outcome.

A nice piece of advice that always gets unnoticed due to panic and paranoia.

Averaging is just one trick to ensure that you are not going down together with the price, but rather using the crashing price as a leverage to get you to a point wherein you are even or you can cash out without any loss. Think of it as a pulley; you are the piece that is bottomed out since you bought during the peak, and the piece that is over you is the current market price. If the price crashes, the piece goes down, and if you are smart enough to buy during those crashes, you are going up and removing the loss on your self piece by piece until it comes to a point that you're over the current market price and can sell without a loss, but with a profit.

It's simple but it works, and I've used that since I started to realize that holding is just a small part of a bigger picture.

you right  when iam a newbie also if the price go down in the market trend i was very wondering i tell to myself what will happen i'm very afraid, but suddenly after a month with of this forum, i continue to read and reseach abot the movement of cryptocurrency how it works.
so far the price are not in danger do not panic the expectation trend for bitcoin price going to 8k usd and after that price fly into the moon.

Crypto is very unpredictable. I already lose 1btc before due to bad trading. The best thing to consider before any trading is the price of BTC.  If Bitcoin is oversold, or may approach huge correction. Dont trade it with alts. Or better do not trade it all.  Invest only a portion,  then buy part by part until you entered all in a perfect position.

That is a very good explanation and good idea, but since crypto is very unstable and maybe things can be turned out a little  unexpected and caused more lost,  this technique need a big capital and need  time to make it work, but its a good advice and one of the good way to cover your lost and make profit when the price volatility is high

Completely agree. I like to cost average in on a Friday. Especially during dip periods

yeah always bear in mind that bitcoin will never become worthless in the future and in fact it will exceed again because  of some investors that still believing on bitcoin promises. .just buy more instead of worrying about it price nowadays 'cause surely soon it will start to increase when it have enough strength    .think positive guys.  .

great advice , but this only counts if you invested what you can lose. most people that panic are people that don't fully understand the market and maybe invested a bit to much. but in general it is good advice and give you a good price on a coin. just wait long enough and there is a big chance prices will go up and you are back in the green.

That's the reason we shouldn't invest all our money at one time instead buy in small quantity at regular intervals then we will get a good average buy price.


Even experienced traders also can't tell you exactly which is peak price to invest. Everything is just guessing game based on some calculations so better follow a systematic investment plan.


It always better to set some limits for both profit and losses and when you reach those limits then you can partially book your profit or loss. Most of the time it works out well. 

We do have different approach regarding to this investment, the market is really wild and the basic attitude that we needed inside is being patient, as we will keep seeing more and more unexpected sway, OP's have a great attitude considering that he already loses when he bought his coin when the price still at the pick then hold and never to sell out, then invest again believing that the market will grow again and bounce back is just around the corner, profits will be much sweater if we will just wait for another new height to achieved.

Averaging down is an old technique done by traders. This is an effective way to make some profit if you bought it in a peak and this is one of the reason why we discourage new traders to go all in. You always need to have a buying power just in case the price action did not go your way.

You can usually do this on Blue chips or in this case Established coins like Bitcoin or Ethereum but be careful doing this strategy on unproven coin because you will not know if that coin will go to die.

Of a truth the right things to do now is to keep holding and buy more out of the deep. Bitcoin get to around  $20,000 and for those that buying then and sell now has loss serious amount of money. Bitcoin had fall below  $9,000 and this also provide another opportunity for those that want to get it cheap and has the fund to really buying them.

These are very convincing materials and it helps me less anxiety when the market goes down. I am a newcomer in the crypto market and the downfall of the market has caused me great panic and fear.
The above statistics have helped me less worry and have more experience in trading. I think you should convey this article in the topic of helping new people. Thanks very much.

here is your problem right in the beginning of your comment!
you have to decide whether you want to start trading bitcoin or you just want to make an investment in bitcoin. i say they are two very different options.

if you want to just invest, none of the things you are listing after this makes any sense because they are market fluctuations and an investor should not even care about these short term fluctuations anyways!

if you want to trade then that means you have to be more serious about it. you said you bought at $18,000 then follow it up with "unlucky"? that doesn't make sense. ok price dropped but so what? as a trader you should immediately adjust your strategy with the market. you sell at a loss with your stop loss and then buy back at the bottom (in the dip) sell on top buy back in the dip, rinse and repeat. that is what trading is not just buying and holding and hoping for the best and then saying things like "unlucky".

that's right take the opportunity to buy more and relax don't get panic read some news and articles 'cause maybe it can help,  and perhaps this is not the end of bitcoin and surely soon it will start to increase just keep holding ,

You need to initially correctly draw up a trading plan, use stop losses. You must accurately represent the point of sale in advance when the price goes down or up. This will help to avoid large losses and reduce risks. Sometimes you have to sell at a loss and this is normal for trading. Everyone can be wrong.

Fair point, I think I phrased it wrong. I should have said 'When I first started to take an interest in cryptocurrency...'. I have only been involved for the past six months and have held Bitcoin since then. I also do some trading with a number of altcoins, but not on a daily basis, nowhere near. My point was more that I didn't know about that strategy until further in, and it is a very useful one to keep in mind when the market drops. I really only trade to hopefully build up my Bitcoin, along with a couple of others that I think (hope) will pay off down the line. Using the word 'unlucky' was just to emphasise the dangers of buying after a long run up (and/or bad timing). Everyone says 'buy the dip', and it is great when you catch it; but I thought I bought the dip a few times, only for it to keep dipping. I do not have large positions (not yet anyway), and was lucky enough to not invest all my fiat, as it was definitely not a strategy based on knowledge at the time. Definitely still learning in all aspects, and have been fortunate enough to get some great feedback just by posting this topic.

You got the right strategy but I think its too early for you to cash out your money when you only gain few profit. You better practice your patience to wait for the price to increase so that you'll have larger amount of profit. Also, I think you need to research more about the strategies that could help you out. Investing is risky so we better be practical about our decisions. Keep holding!

Not planning to cash out any time soon, that's the whole point of the post. I have increased my position in a number of coins over the last couple of months, and happy I was able to get the opportunity to pick up some new ones too. Overall, the last couple of months should, over time, give me a good return. I am not looking short term (for most of them anyway, although there are a couple I would like to get out of), I am looking at least towards next year, and for a few of them, a lot further than that. The current market, in my opinion, will look almost unrecognizable in a few years. Just keeping my fingers crossed that I put my money on the right horse(s).

I think cut loss and averaging are some technical part of risk management in trading, both of them should be used with good analytical strategy and right approach to understand the market situation. Usually, good traders have their own rule to be obeyed tightly by themselves and this rule contain some of risk management strategy such as when to cut loss, and what situation to make averaging.

This is exactly how I look at trading as well.  Oh I just bought something that went down a ton?  Time to just buy more of it so my average cost is way down and I can get out in profit earlier than my initial price.  This of course doesn't apply to something that's been revealed as a scam like bitconnect, though, so be sure to make sure your project isn't tanking for a reason like this before you go deeper!

Agreed, no point in throwing more money away. Definitely need to analyse why the drop has happened, then make your decision accordingly. I guess I was more talking about the recent market drops which have created the opportunity for almost every investment to be 'averaged' - if you have the money to do so. Some will always have to be written off as 'lesson learned'.

Your method is not a bad idea however there are many reasons why it doesn't work for most people.

For one the people that bought at $19k usually used all their available savings or maxed out their credit cards. They want to average down but they can't.

Second of all most of those people who bought at $19k usually sold at $6k because they assumed "it will go to $5k" and we're going to rebuy cheaper. However $5k never came and they most likely chased the market again and bought yesterday at $9800.

If anyone spent all their savings and/or maxed out their credit cards, then they have not learned the basics of investing, and presumably will not have a clue about averaging down anyway.


I doubt (hope?) that most of those people didn't sell at a 65% loss on an assumption it will drop lower. And if they did, then once again, they need to get back to the drawing board on trading basics.

I actually think you are off the mark though, and using the term 'most' for all of your statements is guessing at best. Either way, good luck to us all, even the ones who have no clue what they are doing, as they need it the most.

These strategy works perfectly in good cryptocurrency. But once this approach applied in shitcoins then your pains will start to kick in. As time goes by the losses will accumulate until it will reach to the point that you have incurred heavy losses. I just like to remind all investor who are willing to do these to apply precaution on every step. Not every plan works perfectly in people; it is needs to review or check the effectiveness of the strategy.

almost all averages down, including Altcoins TRON who has migration events from the Ethereum network to his own network.

maybe when there is airdrop event will definitely go up the Altcoins price, because airdrop is an event where everyone is entitled to get free Altcoins, so who does not want free coin in this world? lol!

No, Airdrop is already dead and I doubt that it can really affect the price of crypto as this point. I would believed if this is 2017 but airdrops today? Nah, I wouldn't bother to join them at all. Most of them are scams already, requiring you to submit documents and I even read others require yo to deposit some Eth before they can give you your bounties. I like though the average down strategy, at least you minimize your potential lost and then at the same time give you advantages to gain more profit at the end.

now btc~ 7350 usd,eth~ 580 usd,the crypto market move very slow slow,i also buy with all money i have,i only see the market,not do nothing,pervious i think this year is year of crypto market,it will strong grow up but seem i wrong,this year the crypto market need stable before it increase.i hope the end 2017 and next 2019 the crypto market will strong grow up

This is one of the reason not to invest everything at one go, if it does get dumped then you still have sufficient funds to average down and cut your losses. Some people go all in with everything which means losses have to be accepted until further funding can be found to either invest elsewhere or average down.

Most people do not have the reserves to keep investing. It makes sense to only invest about 60% of what you want to invest so you always have a backup for such a scenario. Opportunity for you to go and buy more coins, do not be sad and feel sorry when the low price is just normal, just make everything run with the current and take every negative as a positive way.

At this very moment, there can be nothing other than staying patient which can help you in having some good earning and that this is the only possible way of your safe survival. The market values are down but this condition will not remain the same forever and that the market will soon recover in a way we want it to be. This will then result in great reward for the ones who are holding their coins for now.

Maybe from Rilex it also takes courage to StopLoss.
Because when you fall too deep it's hard to go back to get up.

Believe everything will be beautiful at the time.

Bitcoins fluctuate almost like the sine waveform they have when they are down, which makes bitcoin more attractive. Investors will look for opportunities to buy at low bitcoin and will sell it at it. Go up to profit from the investment.

indeed the average coin price on the trading market decreases, all coins price decreases, chances are if the price of bitcoin decreases, the price of all coins in the follow-up market decreases, maybe in November the market price of the price will improve.