Big players and whales in the market rarely buy coins at high prices just to hand out free money. Instead, they use smart strategies to maximize their profits while causing regular investors to incur losses. This is how their game works:
1. Sell at peak prices: When coins reach high prices, whales and large investors start to liquidate their holdings. This often results in a sharp price drop, causing panic in the market.
2. Retail investors panic: When the market crashes, many retail investors panic and sell their assets at a loss, causing prices to drop even further.
3. Small recoveries to trap traders: After the initial crash, the market may show a small recovery, only to drop back down. This creates what we call a "small collapse," designed to extract more money from unsuspecting traders.
4. Accumulate at the bottom: When prices hit their lowest, whales will quietly buy back large amounts of coins at a discount, restarting the cycle.
How can you protect yourself from these moves?
Although you can't stop whales, you can protect your investment with smart strategies:
1. Protect your profits early: Don't hold onto coins while waiting for unrealistic profits. Whenever you see reasonable gains, take them and protect your capital. Even a small profit is better than a large loss.
2. Set stop-loss orders: Always set stop-loss levels to minimize potential losses. For example, if your coin drops by 3-4% from the purchase price, convert it to a stable coin immediately. Don't hold and hope for a reversal; act quickly to limit losses.
3. Have a plan: Decide on profit and loss targets before entering a trade. Stick to your strategy and don't let emotions dictate your decisions.
By following these rules, you won't eliminate risk entirely, but you can significantly reduce the likelihood of losses while continuously locking in small and steady profits. Trading is not about hoping for miracles; it’s about making disciplined decisions.