There are different types of investors. This is common for any kind of investment, especially digital. Before we look into those, it might be very interesting to look at this diagram:
All markets are a cycle. If there is a bull cycle, there has to be a bear cycle.
Let’s now look at the different types of investors or investment methods:
1) The wave trader: This is someone who starts investing once the asset moves in the upward direction. This type of investors get in and get out rather quickly and remove the profit each time.
2) The bottom fisher: This type of investors grab assets when the value has tanked so much so that further bottom trend is hardly possible. They keep the money ready for this moment, jumps in and grabs anything they can at heavily discounted prices. They are the accumulators.
3) The long termer: This type of investors just invest when they have the funds and they don’t really care about the prices. Their aim is to hold the assets for a very long time with a belief that the assets have to any way appreciate with time.
4) The averager: “Dollar cost averaging” is a method many investors follow. These are the people who buy one particular asset at every dips and average out entire cost.
5) The bag holder: These are the people who start investing at the peak and end up being caught in a bear cycle.
You develop investment strategies based on your experience. As you gain knowledge, you would know which one is better for you and you will adapt.
This is the 2 year graph of 4L.com chips. Where do we stand with regards to the wall street chart at this point?
5N.com chips in 2015 were trading at 3K plus, now available for 1200 USD. As the demand is less, you could grab really good patterns which goes for a premium otherwise. Just saying an example.