Dual Investment: Buy Low and Sell High
Dual investment is a popular strategy that leverages the market volatility of crypto assets to generate profits. This strategy involves buying an asset at a low price and selling it at a higher price, capitalizing on price fluctuations. While this approach can be executed manually, platforms like Binance and Kucoin offer specialized tools that automate the process, making it more efficient and accessible.
To maximize profits, investors need to have a sound understanding of market trends and future price movements. By purchasing an asset at its lowest point within a given period (such as the weekly low) and selling it when it reaches a higher point (such as the weekly high), investors can achieve substantial returns. Additionally, diversifying investments across multiple crypto assets can provide protection against the volatility of a single asset, reducing overall risk.
How Dual Investment Works
The Dual Investment tool functions similarly to limit and conditional order types, executing trades at a specified future date and price. It allows users to leverage the market volatility of cryptocurrency assets by controlling the timing of trade execution. There are two main types of Dual Investment products: Buy Low and Sell High.
Buy Low: This product enables you to buy a specific cryptocurrency at a target price on the settlement date. If the market price is at or below the target price on the settlement date, the trade will be executed.
Sell High: This product allows you to sell a specific cryptocurrency at a target price on the settlement date. If the market price is at or above the target price on the settlement date, the trade will be executed.
If the Buy Low product successfully acquires cryptocurrency for you at the target low price, you will need to manually set up a Sell High product for the newly acquired cryptocurrency. This Sell High product will sell the cryptocurrency at your target price in the future to potentially earn a profit. Trades are executed only on the settlement date if the target price is reached. Consider using the auto-compound feature to automatically re-subscribe to new dual investment opportunities at each settlement date if target price is not reached.
Starting Investment on Binance
Before subscribing to dual-investment products, it’s crucial to understand the key terminologies. Target price is the specified future price at which you aim to buy or sell your cryptocurrency. Settlement date is the date when the trade is executed and you receive your returns. Deposit currency is the cryptocurrency that you need to deposit to subscribe to product, and target currency is the cryptocurrency you want to receive. And finally, subscription period is the time between subscription date and settlement date.
To make informed decisions, analyze weekly or monthly price movements using charting tools and indicators to determine the optimal settlement date and target price. If you have subscribed to multiple Dual Investment products, monitor their performance closely. The Basic Auto-Compound feature, enabled for each subscription, will automatically re-subscribe you to the plan on each settlement date unless the target price is reached or you choose to turn it off.
Risks and Rewards
The profitability of dual investment strategies largely depends on the target price and market movements. If the market moves in the favourable direction, the trade will be executed, potentially generating significant profits. Success in this strategy depends on accurately predicting favourable market movements and setting optimal settlement dates and target prices.
During the subscription period, interest earnings accumulate and are distributed at settlement. To continuously benefit from investments, consider using the Advanced Auto-Compound feature, which re-subscribes you to a new position based on market conditions. If the target price is reached, the Advanced Auto-Compound feature will open a new position in the opposite direction. For example, if a Buy Low product successfully acquires cryptocurrency at the target price, the system will automatically set up a Sell High position for the same asset.
However, if the market does not move as anticipated, investors may incur losses. Persistent unfavourable market conditions where the target price is not reached could delay profit generation and potentially result in losses. The Auto-Compound feature will continue to re-subscribe to new positions based on the initial strategy, but this may not always lead to profitable outcomes if market conditions are consistently adverse.
Concluding Remarks
Dual-investment products, just like auto-investment and staking products, allow investors to earn passive income with crypto. These products use algorithms for automating the execution of trades at specified date and price, allowing investors to capitalize on crypto market conditions. The general principle of dual-investment is simple: Buy Low and Sell High. Users can buy crypto assets at low price and sell at high to earn profits. The return on investment (ROI) depends on target price, settlement date, nature of crypto asset and its market conditions. That’s why, sound knowledge of crypto market can be helpful in the strategy.