1. Capital management.
Divide the capital into 10 parts and use no more than one-tenth of the capital for each trade. For example, if you have 50,000 to trade, then your stop-loss cannot exceed 10,000. Set the stop-loss at 1,000 when you feel it's appropriate to open a position. If you are a beginner with a poor risk tolerance, you can also divide the capital into 20 or 50 parts to reduce losses accordingly.
2. Always use a stop-loss when opening a position.
Open positions with stop-losses to protect your capital. Plan your stop-loss position before opening a position, rather than impulsively opening a position and then thinking about when to stop-loss. At this time, you have no plan and you likely do not know where to set your stop-loss, which is very dangerous.
3. Do not overtrade.
Excessive trading violates the first principle of capital management. If you divide your capital into 10 parts, each time you lose 1/10. In case of frequent trading, if you make ten wrong trades in one day, your capital will be exhausted. Do not overtrade; maintain patience and wait.
4. Do not let profitable positions ultimately stop-loss out.
Do not let unrealized gains turn into unrealized losses. Once you have a certain level of unrealized gains, set a protective stop-loss near the entry price. If a formerly profitable position turns into a loss, the psychological impact is significant, even more painful than simply taking a stop-loss. Experienced traders can relate to this. As for how much unrealized gain to set a stop-loss, it depends on individual tolerance, but generally, it should be above 3%.
5. Do not go against the trend.
If you are unsure about which side the trend is on, do not trade. The trend is clearly upward during a bull market and downward during a bear market. Do not confidently try to catch the top or bottom and go against the trend.
6. Exit and observe when confused.
Referring to point 5, if you cannot distinguish the trend, stop trading and wait for the trend to clarify before entering.
7. Buy liquid and actively traded cryptocurrencies.
Stay away from illiquid assets. For example, new cryptocurrencies on exchanges may have poor liquidity. Even with airdrop tokens, you know there will be obvious dumping, but in fact, you cannot capture it. In conditions of insufficient liquidity, your short position can easily stop-loss or even get liquidated, and assets with insufficient liquidity generally do not meet technical analysis standards.
8. Diversify risks.
Trade multiple assets instead of putting all your eggs in one basket. Even in a clear trending market, there can be single asset fundamental issues leading to counter-trend movements. My advice is to diversify investments among mainstream coins and those with high trading volume and market cap.
9. Try to use market orders more often.
Do not only use limit orders; be flexible and responsive to enter at market prices. Sometimes the market moves very quickly, and limit orders may miss opportunities. For instance, when stop-lossing, if the market moves rapidly, limit stop-losses can easily miss the chance to stop-loss, resulting in significant losses.
10. Do not terminate trades without reason.
Strictly adhere to the plan; do not change it arbitrarily without sufficient reason. Many people feel anxious about taking profits after opening a position, so they think about securing profits when the price moves in a favorable direction. At this time, patience is essential. If you are worried about significant profit retracement, you can refer to point 4 and set protective stop-loss or trailing stop-loss near the cost price.
11. Withdraw timely.
If your trades are going smoothly, you can transfer some profits to a backup account or withdraw them for emergencies. Money that hasn't left the casino never belongs to you. When trading, do not reinvest all your earnings to snowball; instead, take out some and keep it in another account for emergencies.
12. Do not buy for a single dividend.
In cryptocurrencies, do not buy certain coins just because of the profits from airdrops or staking; it often leads to significant losses.
13. Do not attempt to add positions to lower costs.
Try not to continuously add positions to lower costs; this is the biggest mistake traders may make. Buying more as prices decline may occasionally yield profits if prices rebound to the ideal level. However, if prices continue to fall without rebounding, a single one-sided market can wipe out all your capital. Many big players on Wall Street have gone bankrupt from catching falling knives.
14. Do not exit due to losing patience.
Do not enter the market out of impatience after waiting for a long time. Be patient and wait for trading opportunities. Do not place orders just to trade, and do not exit due to a lack of patience. When you have orders, patiently wait for the results of your take-profits and stop-losses.
15. Avoid small profits and large losses.
Do not take small profits and exit before reaching your take-profit point, nor should you hold a position at your planned stop-loss point, letting a small stop-loss turn into a large loss. Small profits and large losses ultimately result in a loss.
16. Do not revoke your set stop-loss point during trading.
Referring to point 15, once a stop-loss is set, do not cancel it arbitrarily to avoid small losses turning into large stop-losses.
17. Avoid frequent trading.
Frequent trading can silently erode your capital due to transaction fees, and frequent trading increases the probability of losing your capital. Maintain patience and wait.
18. Do not exclusively go long without going short.
Speculation is not investment. During a bull market, the market trend is clearly upward, and you may love to go long. However, during a bear market, when there is an obvious downward trend, do not stubbornly go long. Instead, short at highs and align your trades with the trend; that is the way to make money.
19. Do not buy because the stock price is low, and do not sell because the stock price is high.
Some cryptocurrencies were originally worth 100 USD, but during a bear market, they may drop to only 1 USD. At this time, do not buy just because the price is low; in fact, it can drop another 90%, like Luna. Conversely, if a cryptocurrency is only 1 USD and rises to 100 USD during a bull market, do not short it just because the price is high; it may actually rise to 1000 USD.
20. Pyramid adding position method.
The pyramid adding position method means that when you open a position, you start with a relatively large position size, and as the market moves in your ideal direction, you then add a small amount. For example, in an uptrend, when prices rise a bit and enter a consolidation area, wait for a breakout before adding to the position. If it does not break out, do not add to the position.
21. Go long on small-cap stocks and short on large-cap stocks.
In the cryptocurrency space, during a bull market, going long on small-cap coins makes doubling very easy. Illiquid assets often have massive slippage when closing or stopping losses, while shorting liquid mainstream coins, like Bitcoin, is relatively safe.
22. Do not engage in hedging trades.
When the direction is wrong, clear out your positions and admit your mistake while waiting for opportunities. Many people do not stop-loss when their long positions hit the stop-loss point; instead, they open a short position to hedge, which is meaningless. If you believe the price will continue falling, you can close your long position and open a short, or stop-loss when reaching the stop-loss point and rest. Leaving the original long position while opening a short will only waste margin.
23. Plan your trades, trade your plan.
Without a good enough reason, absolutely do not change your trading plan casually. Every trade must have sufficient justification, and execute according to the established plan. Do not exit easily before a trend reversal.
24. Do not increase your position after making profits for a while.
Do not increase your position size just because you have made a few profits. If you always trade one Bitcoin at a time, after experiencing many profitable trades, you will become overly confident. When the next opportunity arises, you increase your stake to 10 Bitcoins. If you then incur losses, you will wipe out the profits from your previous 10 trades. As the saying goes, every time you want to make a big move, you will always end up with a big loss.
In a bull market, we must not miss any opportunity to continuously generate profits. If you crave to double your capital, earn a big profit, or recover your losses, then please closely follow the steps of the expert and layout for the upcoming bull market! The expert will do their utmost to help you realize your dream of doubling your capital in a bull market, making your investment journey easy and enjoyable!
