I have distilled eight golden rules specifically designed to help retail investors quickly grasp the essence of investing. Though brief, every word contains profound meaning; once understood, it may help you avoid years of detours on your investment journey.
All these rules stem from my years of exploration and practice in the market. Today, I wish to share them with you, hoping that every reader can gain wisdom from them, reduce the hardships of exploration, and write their own glorious chapter in the cryptocurrency space as soon as possible.
1. Skillfully use morning market conditions: In the morning, the sentiment in the cryptocurrency market is at its purest. If the price drops sharply, don’t panic; this could be a good opportunity to 'pick up bargains.' If the price surges significantly in the morning, don’t be greedy; take the opportunity to secure profits.
2. Grasp the afternoon strategy: If there is a sudden surge in the afternoon, don't get carried away and follow the crowd; most of the time, it's just a false heat, and buying at high positions can be risky. Conversely, if there is a significant drop in the afternoon, stay calm, observe for a while, and find the right low point to enter the market the next day; this often leads to acquiring cheaper shares.
3. Stabilize your mindset during downturns: Waking up in the morning to see a significant drop in cryptocurrency prices can be alarming.
Don't rush to cut losses; the market changes rapidly, and morning volatility is often a 'smoke and mirrors' tactic. If the market is stagnant and shows no signs of movement, don't get anxious. It might be wise to take a break, conserve your energy, and wait for opportunities.
4. Strictly adhere to buying and selling rules: If the coins you hold haven't reached your expected high, don't sell easily; even small profits can be a loss. If it hasn't dropped to your psychological price level, resist the urge to buy recklessly, so you don't end up buying in the middle of a downtrend. During a sideways phase, with chaotic trends and unclear direction, trading is undoubtedly like a blind man trying to grasp an elephant; it's better to observe from the sidelines.
5. Operate according to candlestick patterns: Buy on bearish candlesticks and sell on bullish candlesticks; this is a classic strategy.
Slightly. A bearish candlestick indicates a price correction, and the chips are getting cheaper; it is precisely the
Good timing to enter; when a bullish candlestick appears, it indicates that a short-term uptrend is forming. Sell high and secure your profits.
6. Breakthrough through contrarian thinking: To stand out in the cryptocurrency space, sometimes you have to go against the grain. When everyone is frantically buying, remain calm; when everyone is panicking and selling, be bold and dare to act contrarily. This way, you can find niche opportunities for wealth outside the mainstream trends.
7. Endure the grinding process of consolidation: When prices are consolidating for a long time at high or low levels, it can be very taxing. At this time, don't let anxiety push you into action. Be patient and wait until the trend becomes clear—whether it is an upward move or a downward probe—before committing fully.
8. Seize the tail end of a rally: After a long period of consolidation at high levels, once there is a renewed upward thrust, don't hesitate; this is likely the last frenzy. Sell in time to secure your profits, or else they may vanish, and the cooked duck could fly away.
Many people say that short-term trading is speculation.
First of all, I must say that short-term trading is not speculation. True short-term trading is an investment behavior that requires mastering certain market operating rules and strong skills. Short-term trading tests a person's skills and patience.
1. Develop a clear investment plan. If you want to do short-term trading in cryptocurrencies, first set a clear investment plan for yourself, including how much capital to use and how much return you can expect each month. This needs to be planned according to your risk tolerance.
2. Ensure you have enough time and energy. Intraday trading emphasizes making many small profits rather than one large profit. Develop your trading principles and habits, and don't trade just for the sake of trading; avoid the itch to trade when you're not placing an order.
3. Because short-term investments generally involve frequent trading, it is very important to choose the right coins; trading must be continuous.
4. When holding a profitable position, close the position when you reach your psychological price point; do not try to maximize profits. Also, be cautious about position size and leverage. Learn to control your position strictly based on the leverage of the products you are trading and your own capital.
5. Use technical indicators: There are countless technical indicators in the market, at least over a thousand, each with its focus. Investors cannot master them all; just familiarize yourself with a few. Commonly used technical indicators include KDJ, RSI, etc.
6. Use moving averages: Short-term trading usually references the 5-day, 10-day, and 20-day moving averages. A 5-day moving average crossing above the 10-day and 20-day moving averages, and a 10-day moving average crossing above the 20-day moving average is called a golden cross and is a buying opportunity. Conversely, it is called a death cross and is a selling opportunity.
7. During rapid price fluctuations, try not to trade.
8. Don't look at too many analyses from others; everyone has different opinions. The price trend is influenced by many factors, and all predictions about the future are fifty-fifty—half right and half wrong. Just believe in yourself.
Learn to release the burdens of your heart; don't be overly joyful because of profits or overly depressed because of losses. Actively put down your phone and computer, reduce excessive focus on market trends, and face each trading challenge with a calm and resolute heart.
After six years of trading cryptocurrencies, I have gained more insight into swing trading and identifying tops and bottoms. Choose the right mainstream topics, and under the backdrop of a rising trend, hold onto valuable coins acquired at low positions; victory will eventually belong to you!