A bear trap in crypto or in trading in general refers to a situation where the price of an asset like a cryptocurrency appears to be in a downtrend, causing traders to think it’s heading lower, that is, bearish market. They might sell or short the asset in anticipation of further drops.

The saying “buy the dip” is frequently used in the context of investing, particularly when there is a chance to buy at a lower price when the price of an asset or stock momentarily drops. It is predicated on the notion that you may make money by purchasing when prices are low and that the market will eventually rebound. The biggest dilemma in trading is deciding on whether to buy and hold your crypto asset or to sell it in time before making a loss.

I would also like to talk about two very important disciplines in the crypto world and that is spot trading and copy trading.

Spot trading refers to the buying or selling of a cryptocurrency for immediate delivery. When you buy a cryptocurrency through spot trading, you’re actually purchasing the asset and owning it. The transaction happens “on the spot,” and the exchange delivers the cryptocurrency to your wallet immediately (or within a short period). Let’s look at some of the characteristics of spot trading:

• Ownership: When you engage in spot trading, you own the cryptocurrency you purchase.

• Market: You’re trading directly with the market price (based on current supply and demand).

• Risk/Reward: Spot trading can be highly profitable, but it also carries the risk of losing money based on market volatility. It requires you to make decisions about when to buy and sell based on your own analysis or market trends.

• Trading Pairs: Commonly involves trading pairs like BTC/USD, ETH/BTC, etc

Copy trading (also known as social trading or mirror trading) allows you to automatically copy the trades of more experienced or professional traders. Instead of doing all the research and analysis yourself, you follow the trades of others, effectively “copying” their strategies. Let’s delve into the characteristics of copy trading:

• Ownership: You still own the cryptocurrency that you trade, but the decisions of when to buy or sell are made by the trader you copy.

• Market: The trades you make are executed based on the trades of others, but you’re still using the market price.

• Risk/Reward: The success of your trades is dependent on the trader you’re copying. If they do well, you do well. But if they fail, you’ll lose money. It’s also worth noting that some platforms charge fees for copy trading.

• Trading Pairs: Similar to spot trading, but you don’t pick the individual trades. Instead, you follow a trader or multiple traders

Key Differences

• Control: With spot trading, you’re fully in control of the decisions. In copy trading, you’re delegating that control to another trader.

• Skill Level: Spot trading typically requires more skill and knowledge of the market, while copy trading allows beginners to potentially profit from experienced traders.

• Time Investment: Spot trading often requires constant monitoring of the market, while copy trading can be more hands-off, as you rely on others’ strategies.

So, the big question which strategy should you choose. I will give my own opinion and this should not be taken as plain truth, just a disclaimer.

• Spot Trading is ideal if you’re confident in your understanding of the market and enjoy making your own decisions.

Copy Trading is perfect if you’re new to crypto or don’t have the time to do deep analysis, but still want to take part in the market