How Covesting Strategy Managers Profit During Sideways Trends

Bitcoin and the rest of the crypto market has been trapped in a grueling sideways trading range for months on end. The result is falling trading volume, reduced volatility, and dwindling interest in the normally exciting market.

The sideways action is the result of a market that is too scared of what is next after one of the worst drops on record. After an incredible rally to start 2021, the crypto market collapsed and left participants reeling. They are now afraid to go long and are not confident that a bull run is still in effect, while they are also appropriately worried about a shorting at resistance.

All while most traders are either frustrated by this stalemate or starting to move to the sidelines waiting for the range to break, top Covesting strategy managers were able to amount a sizable fortune during the sideways action alone. Here is how they did it.

Why Sideways Trends Happen In The First Place

The sideways trend exists for a lot of reasons, and when one appears it is the bane of both trader’s and investor’s existence. It is often a time when both types of market participants completely give up and exit all positions.

The phase could be due to indecision, due to a pause after an especially sharp move, or otherwise. It reflects both sides of the market, bears and bulls, in a standoff. Neither side is winning although both sides are trying their best.

Traders also know that when these ranges take especially long, when they do ultimately break it can result in some of the largest and most profitable moves around. That keeps traders trying and trying again and only adds to the frustration of the situation. It is only when everyone finally gives up, shorts close, longs are few, and then the market picks its ultimate direction.

Moves from these periods of consolidation and low volatility tend to set the trend for sometimes months ahead, so being on the right side of the trade here is critical. Unfortunately, very few and far between know how to survive in sideways markets much less profit during it. Yet somehow Covesting strategy managers are confirmed to have achieved over 20,000% profits during the last couple months of the crypto market sideways trend.

How Covesting Copy Traders Survive Sideways Situations

Covesting is a copy trading module on the award winning PrimeXBT that lets followers and strategy managers come together in a peer to peer trading community. Members of this community are ranked based on total profits for all potential followers to see. Not to be confused with social trading, copy trading lets followers copy the trades of strategy managers who regularly show success through the fully transparent risk and success metrics found within the Covesting global leaderboards.

When a follower copies the trades of a strategy manager, their capital is subject to similar gains, sans the strategy manager’s cut and the fees that go to the house. That means that while followers don’t quite get 20,000% in total profits themselves, they get a massive share of that pie. Followers can also diversify their capital and put it behind dozens of strategy managers at once for the most possible total profits.

The idea behind this is similar to how regular portfolio diversification works. By relying less on one profit driver, there is less risk when that driver turns sour. It also reduces risk by spreading it around. All strategy managers aren’t going to have a bad day at once. And not all of them are going to know how to trade their way out of a paper bag let alone an extremely difficult sideways trend.

How Strategy Managers Stayed Successful During A Sideways Market

So, for those strategy managers, how did they manage to pull off such a feat during a sideways trend and reach more than 20,000% profits? The answer is leverage. What is leverage you ask?Well it is a powerful tool that both increases profitability and risk at the same time. Leverage is only available in margin accounts, and allows traders to amplify the power of the trading capital by a much larger amount than what would normally allow.

Margin is borrowed funds from a broker that is used to make positions much larger than otherwise possible. With much larger position sizing, the profits are also much greater. However, the risk that is possible is also just as large. Risk can be managed with the proper tools and strategies, and in the right hands leverage can be the best tool in a trader’s arsenal.

It allows traders to make money when there’s next to no movement at all, without as much on the line, and lets traders get into position for both sides the market could break with long and short positions. Margin and leverage go hand in hand with longs and shorts, and other tools like stop loss orders. Combined with technical analysis software offered by PrimeXBT, Covesting strategy managers were able to churn out profits from even the sideways action.

When the trend breaks, a decision will be a lot clearer and the market will follow for weeks to come. Sometimes these moves are dramatic, and set the tone for months to years, depending on the severity. Such moves cause a switch from a bull to bear market, and that is what traders are waiting to see.

Before the decision becomes clear and the next time the trend starts to move sideways, remember the tools that the strategy managers at Covesting have at their disposal and how they used them to their advantage. If all else fails, copy their lead and their trades with the Covesting copy trading module on PrimeXBT. Trading isn’t easy, and it is even more challenging when the market becomes stagnant, fearful, and indecisive. While that happens and there’s no trend to speak of, there’s still a way to profit no matter what with Covesting, whether you are a follower, strategy manager, or want to try your hand at both.

 

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