1. Be Cautious with Adding Positions
Do not blindly add positions during losses in cryptocurrency trading. Many people become extremely anxious after being trapped, only wanting to reduce costs to recover losses, neglecting market rules. Downward trends are difficult to reverse in the short term; adding positions often serves only as self-comfort. Hasty actions can lead to mistakes, resulting in regret. First, consider why to add positions at this level and whether it is truly feasible.
2. Avoid Adding Positions
Do not continuously add capital to the account before having stable profitability, especially do not lower your standard of living due to investment. Losses indicate that the trading system has flaws; at this time, reflect and improve, rather than trying to fill the gap by adding capital. Increase investment only after finding effective methods.
3. Go with the Trend
The cryptocurrency market trend has three types: upward, downward, and sideways. In a downward trend, maintain light or no positions; in an upward trend, actively participate. Following the trend can significantly increase the success rate; do not go against the trend.
4. Simplify Trading
Traders often combine various indicators, news, and K-line patterns to find trading points. While this is not wrong, one must guard against over-analysis leading to complexity. Trade when you see K-line patterns that suit your own system, while also ensuring proper stop-loss and position control.
5. Seek Victory in Stability
Entering the cryptocurrency market should not be in vain; losses should not be a reason for fear. It is normal for investments to have both losses and gains; one should not shrink back due to temporary losses, nor should one have a mentality of taking chances. Steadily build a foundation, and those who laugh last are the true winners.
6. Mindset is Paramount
In speculative markets, the focus is on managing risk rather than purely seeking profit. Cryptocurrency trading is all about mindset; magnify returns when profitable, and be willing to stop losses when at a loss. Remaining calm when misjudging the market is the hallmark of a skilled trader.
7. Be Cautious with Adding Positions
Increasing positions during losses can greatly increase risk, as seen from the lesson of stop-loss exit in Bitcoin. At the same time, do not expand the stop-loss distance in pursuit of win rate; operate according to trading rules, and making mistakes is normal.
8. Trend Analysis
Break through resistance levels to add positions; short when falling below the main distribution area. After a long-term rise, if there is high-level volatility, do not chase after secondary breakthroughs during specific periods, and do not hold positions overnight; if there is a significant drop after a high-level breakthrough the next day, do not hold either. Determine trends based on changes in high and low points; the duration and magnitude of declines indicate potential trend reversals.
9. Control Desires
Being eager to make money is a major taboo in cryptocurrency trading. If you cannot control greed and desire, it is difficult to stand firm in the market for a long time. Investors are easily influenced by bullish and bearish emotions; breaking free from this state is necessary to become a qualified market participant.
10. Reasonable Allocation
Follow the principle of 'not putting all eggs in one basket'; diversify investments across multiple cryptocurrencies to reduce the risk of a single currency. Retain some cash (stablecoins) for buying at low prices during market downturns.