The secret to trading tokens can be summarized in two sentences: limit losses to the smallest possible, and let profits run. This means that if you find the trend of the token is not right, immediately stop loss and minimize your losses as much as possible. Once you have made a profit, you must be patient and let small profits turn into large profits.
The first priority in choosing a buying point: the three criteria for choosing a stop-loss point when buying tokens are value analysis, technical analysis, and market cycles. Some people only look at value analysis when buying tokens, focusing on the inherent value of the project without considering other factors. Others only look at technical analysis, believing that the market's view of the token is fully reflected in the changes in stock price and trading volume.
Most traders belong to the second category. The price of a token reflects the future prospects of the company. A more suitable method is to use value analysis to select tokens. The operations after finding a token mainly rely on technical analysis. Then, the principle is to lose small amounts when losing money and make large amounts when making money, with timely stop-losses. Imagine you are a big player; how would you manipulate public psychology?
The tricks of big players are actually quite simple. When they want to buy in, they either do it quietly or try to trigger a panic sell-off among the public. In the former case, you will notice an increase in trading volume, but not significantly, and the price slowly rises step by step. In the latter case, they create some universally recognized good selling points. When big players want to sell, they may first buy in, causing the price to skyrocket. The process of finding the critical point of price fluctuations is the process of learning to trade tokens, requiring constant discovery of critical points that suit one's personality and risk tolerance.
When to sell can be divided into two parts: the first is how to choose a profit-taking point; the second is how to choose a suitable selling point to profit after making a profit. It is difficult to catch the head and tail of a token, traders should learn how to capture the middle 70% of the price fluctuations. Do not try to find the highest point of the token; you never know how high it will rise. Deciding when to sell is more difficult than deciding when to buy. When losing, you hope to break even; when making a profit, you want to earn more, and the thoughts are in constant struggle. For beginners who are just learning to trade tokens, having a mindset of not selling without making a profit is extremely detrimental. With such a mindset, a fate of failure is almost predetermined.