Short-term trading of cryptocurrencies, you must remember these three iron rules!
First, if you make money, you must protect your profits. For example, if you buy a coin and it rises more than 10%, you need to be careful. Set a rule for yourself: if the price drops back to your purchase price, sell immediately without hesitation! If you make 20%, you need to be even more cautious; at least ensure you secure a 10% profit before acting. The more you earn, the higher your baseline should be. For instance, if you make 30%, then if it drops to a point where you only make 15%, you must sell. This way, even if you don't accurately judge the peak, you can still let the profits roll in.
Secondly, if you lose money, you must cut your losses in time. For example, if you buy a coin and end up losing 15%, don't hesitate; cut your losses and exit. Don't think about waiting for it to come back up; if you're wrong, you have to admit it and bear the loss. Remember, whenever you open a position, you must set a stop-loss; this is a fundamental skill in trading cryptocurrencies.
Finally, buy back at the original price, don't miss out. If you sell a coin and it drops, but you still have faith in it, wait for it to drop to a certain level, then buy back the same amount of coins. This way, your coin quantity remains unchanged, but you have more funds available. If it doesn't drop after you sell and instead rises back to your selling price, you must unconditionally buy it back. Although you might waste some transaction fees, it's better than missing out. This principle can be used alongside the stop-loss principle: buy back when it rises, cut losses when it drops. Try this several times, and you'll be able to find your own suitable buying and selling points.
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