Trading cryptocurrencies seems simple, but in practice, there are pitfalls everywhere. If you want to earn money in the long term, you can't rely on luck; you need to rely on a few fundamental rules. These methods aren't sophisticated, but there are really not many who can implement them.
The first and most important rule is to not be swayed by emotions. When prices are surging, and everyone is rushing in, you should hold back; when prices are plummeting, and everyone is fearful, you should calmly look for opportunities. It’s easy to say this, but hard to do. I’ve made mistakes myself—chasing highs only to get trapped, cutting losses on every dip; these are all lessons learned.
The second rule is to never invest all your money at once. Going all in is like gambling your entire fortune; when your mindset goes awry, your actions will distort. The market is never short of opportunities; if you have no cash on hand, when the opportunity arises, you can only watch helplessly. Keep some backup funds so you can feel secure.
In terms of specific operations, I have summarized a few experiences, all tested in real situations:
If the direction is unclear, don't act. When the price of the coin is consolidating at a high level, it might occasionally surge to a new high; when at a low level, it might continue to break lower. Don't guess; wait for the market to establish its direction.
Try to trade less during consolidation. Most people lose money by frequently entering and exiting during these times, losing out on fees and disrupting their rhythm.
Buy on big drops and sell on big rises. For instance, if there is a large bearish candle on the daily chart, consider buying in batches; conversely, if there's a large bullish candle, consider selling a little. This rhythm is very practical.
Pay attention to the speed of the drop. If the drop is slowing down, the rebound generally lacks strength; but if it suddenly accelerates downward, the rebound could be quite strong. This change can help you judge the timing.
Building positions is like stacking blocks, starting from the bottom. The more it drops, the more you should buy gradually, this way you can average down your cost and not fear short-term drops.
After rising too much, it will consolidate; after dropping too much, it will also consolidate. Don’t sell your entire position during consolidation, and don’t go all in trying to catch the bottom. The key is to see which way it breaks out after consolidation, and then adjust accordingly.
Ultimately, trading cryptocurrencies is a battle with yourself. These methods sound simple, but to truly execute them requires strong discipline. I don’t aspire to become rich overnight; as long as I can stabilize and earn slowly, that’s enough.
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