In the cryptocurrency market, experienced investors are often better able to seize opportunities and avoid unnecessary losses. The following are some valuable experiences accumulated over many years in the cryptocurrency circle, hoping to help both novices and veterans to move forward steadily in this volatile market.
1. Long-term holding is better than frequent trading
Tips: Don’t exchange coins easily, your assets will have opportunities sooner or later.
Explanation: Frequent trading not only increases transaction costs, but may also lead to missed opportunities for long-term growth due to market fluctuations. Selecting some potential projects and holding them for a long time can reduce the negative impact of emotional decision-making.
2. Beware of overly hyped projects
Insight: Don't touch the coins that everyone is hyping.
Explanation: When a project is widely discussed, its price likely already reflects all current optimistic expectations. Entering in this situation may pose the risk of buying at a high level, especially during a bear market, where such projects often experience larger declines.
3. Use leverage cautiously in a bull market
Insight: Don't touch contracts in a bull market.
Explanation: While using leverage can amplify returns in the short term, it also significantly increases risk. For most ordinary investors, using leveraged products in a bull market is unwise because even in an upward trend, a sharp market correction can lead to liquidation.
4. Stay calm and overcome FOMO (fear of missing out)
Insight: Stay calm when others are crazy.
Explanation: During market upswings, people are easily influenced by those around them and make impulsive investments. It is necessary to evaluate potential investment returns and risks more rationally at this time, ensuring that one's decisions are based on thorough information analysis rather than emotion-driven.
5. Technical indicators are not万能 (universal)
Insight: Contract indicators are unreliable.
Explanation: Especially under extreme market conditions, technical analysis tools may fail. Market makers sometimes intentionally create illusions to mislead retail investors, so one should not rely entirely on these indicators for investment decisions.
6. Maintain confidence in chosen projects
Insight: Trust your choices.
Explanation: If a project can survive a bear market, it is likely to have real value and good fundamentals. Such projects usually perform better when the next bull market arrives.
7. Reasonable capital management
Insight: Be cautious when handling funds that exceed a certain amount.
Explanation: For larger amounts of capital, it is advisable to diversify investments across multiple mainstream coins to reduce risk; for smaller amounts, one can consider whether to try some more speculative altcoin investments based on personal risk tolerance.
8. Follow market trends
Insight: Go with the trend.
Explanation: It is very important to recognize that the market is in a correction phase most of the time. Patiently waiting for the best buying opportunity and acting decisively when the market improves is one of the key strategies for obtaining stable returns.
By following the above principles, even in the complex and ever-changing cryptocurrency market, one can improve their chances of success. Remember, investing always carries risks; the most important thing is to find an investment style that suits you and always prioritize risk management.