As a female analyst who has been in the crypto industry for many years, I have seen too many people come in with high hopes, only to leave in disappointment due to missteps. Today, I want to share a few survival rules that can truly help you live longer in this space, in the most straightforward way possible.
1. Don't get emotionally attached to hot cryptocurrencies; you must leave when it's time to go.
I have seen too many people, including myself, who once held on to a rising hot cryptocurrency and were reluctant to sell, always fantasizing that it could double again, only to watch profits evaporate, or even find themselves deeply trapped.
The essence of hot cryptocurrencies is a game of passing the parcel. You must be clear that you are only here to profit from the price difference, not to grow old with the project. When prices are crazy, market sentiment is your biggest enemy. Remember, you can make a lot when you sell at the top, but if you're trapped, you might incur losses. Once you reach a certain level of profit, gradually exchange it for stable assets or Bitcoin, and keep the profits in your hands to sleep soundly at night.
Second, grasp the market rhythm, don't stubbornly hold on at the wrong time.
"When the price is consolidating at a high level before a breakout, seize the opportunity to prepare to sell; when the price is consolidating at a low level with new lows, there is a high chance of a good opportunity arising." This statement is particularly practical.
When the market environment is poor and the entire market is falling, if your coin does not fall or even stays stable, once the market warms up slightly, it will often be among the first to surge. Conversely, if the market is booming but your coin is stagnant and not rising, be careful; this likely indicates that it is fundamentally weak, and it will drop even harder when the market adjusts.
Therefore, don't go against the trend. If something feels off, and the market leader says to change, don’t try to force your way in; it's easy to get caught. We should only take the confirmed ride of the tailwind.
Three, position management is crucial; don't stubbornly hold onto losses.
This is the most expensive lesson I’ve learned: only add when making money, do not average down on losses.
Many people's habit is to average down when the price falls, trying to lower their cost, but the more they add, the bigger the hole becomes, ultimately leading to their entire account being dragged down by one coin. The correct approach is to only increase your position when the price confirms a breakout above the previous high and the trend is strengthening. If the price drops after you buy, it indicates that your initial judgment may be wrong. At this point, you should decisively cut losses and stop the bleeding instead of continuously throwing money in. Remember, preserving your principal should always be the top priority; as long as you have principal, you will always have opportunities.
Four, to seize the trend, you need a bit of patience.
If you are truly confident in a trend opportunity, and the price is showing an 'advance two, retreat one' upward pattern, then don't easily exit just because of minor fluctuations.
The formation of trends takes time; truly strong coins will continuously shake off those who are not steadfast during the upward movement. At this time, what you need is to trust your judgment. As long as the core logic remains unchanged and the support line has not been effectively broken, it’s worth being a bit more patient, as often great surprises follow.
Five, first look at sectors, then look at coins; don't be a bottom-tier player.
"Top-tier players first look at sectors, second-tier players only look at individual coins, third-tier players look at indicators, and bottom-tier players only gamble." This sentence reveals the levels of trading in cryptocurrencies.
Capital is influenced by sector effects. When a hot sector rises, it’s like a gust of wind; good and bad coins within it usually get lifted. What you need to do is first determine which direction the wind is blowing (the sector) and then look for the sturdiest ship within it (an individual token). If you only dive in because the technical indicators look good without considering which track it belongs to or if it currently has heat, that’s no different from gambling with your eyes closed, and naturally, your success rate won't be high.
Six, indicators can be misleading, but volume and price rarely lie.
Various technical indicators (such as KDJ, MACD) are calculated based on historical prices and trading volumes, belonging to the 'effect' rather than the 'cause'.
Therefore, what truly needs attention is the core of 'price' and 'volume'. When the price breaks through a key position, is there an increase in trading volume to accompany it? A significant increase in volume usually indicates a real breakout, while a decrease in volume during an uptrend should be approached with caution as it may be a trap. Ignoring the relationship between volume and price and blindly believing in indicators like golden crosses and dead crosses will inevitably lead to frustration in trading.
In the end, trading cryptocurrencies is not about who is smarter, but about who adheres to discipline and can control their hands. The most brutal yet fair aspect of this market is that your understanding always determines your wealth ceiling. Those who earn money through luck will eventually lose it back through skill.
I hope these words can help you establish a foothold in the cryptocurrency market's ups and downs. The road ahead is long, and we will walk steadily together.
I wonder what the most perplexing issue is for friends who have just entered the market? Feel free to discuss in the comments; perhaps my next sharing can help you.
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