Harsh corrections are the norm in cryptocurrency markets. Even in an uptrend there will be chunks of time where the whole market is down 10% or more (sometimes much more).
That means to enjoy an uptrend, you have to either be a really good trader, really lucky, or willing to see your account balance go down when the market corrects.
Given that corrections are normal in crypto, that most people aren’t really lucky or great traders, it is wise to prepare for the inevitable red day.
There is no perfect way to prepare, but there are tactics that can help.
Some people will average in and average out of positions (never overexposing themselves at one point and at one price and always making sure they took a little profit on green days), others will long and short based on charts (this takes a ton of skill), others will just try to trade when conditions are favorable (this also takes skill, but mostly in detecting when the market is bullish), others will just grit their teeth and HODL through the whole thing and maybe take some profits when the run has clearly come to an end (this can work wonders if you can tell the difference between a bull market and bear market), others will take a different route.
There are more effective and less effective ways to approach things, but the key is understanding what you are up against and coming up with a plan that works for you.
Take a look at the Litecoin chart above, how exactly do you get from the bottom to the top of that run without sitting through some harsh corrections?
The answer is, you don’t… not unless you are a great trader or very lucky.
Further, how do you tell the difference between the end of a run and a correction?
Well, that is very hard to do in the moment without risking missing out on the next leg of a run.
It is with the above points in mind that it becomes clear that it is important to have a plan that takes into account the inevitability of crypto corrections in an uptrend and the inevitability of the eventual downtrends too.