1️⃣: Allocate assets wisely; do not put all your eggs in one basket. "Don't put all your eggs in one basket" is the golden rule of investing, especially in the highly volatile cryptocurrency market. Asset allocation and diversification are crucial. In the crypto space, sectors often rotate; if you heavily invest in one coin and it doesn't rise, it will be difficult to roll your assets, or if there is negative news about that coin, it could lead to severe losses.
2️⃣: When trading cryptocurrencies, one must follow the trend. There are three types of trends: upward trends, downward trends, and sideways consolidation trends. Undoubtedly, during a downward trend, one should hold light positions or even stay out of the market. Participate during upward trends for a much higher success rate. Never chase prices; wait for stability after a decline before entering at the start of an upward movement. Gradually reduce positions at highs during an uptrend instead of going all in when seeing a price rise, as this can easily lead to buying at the top.
3️⃣: The more losses you incur in cryptocurrency trading, the more cautious you must be in adding to your positions. There are many traps in the crypto market; many become anxious and keep averaging down to reduce their costs, hoping for a recovery, which actually goes against common sense. At this time, the key is not to lower the average price but to reflect on whether the assets purchased are the right ones or if the current downward trend has stopped. If the bought coin is a poor investment and is experiencing a significant drop, do not add to your position. Instead, decisively cut losses. Not cutting losses means increasing losses!
4️⃣: When you make money, you need to know how to realize those gains and convert them into stable fixed assets, such as gold or real estate. When losing money, refrain from continuously adding to your positions. Before you have the ability to make profits, do not keep adding to your account. Losses indicate that your trading system has flaws; at this time, you should not try to fill the hole with more investments. Instead, reflect and calmly explore an effective method before increasing your commitment.
5️⃣: 50% of funds should be allocated to Bitcoin and Ethereum, 30% to quality altcoins, and 20% as reserve funds for buying on dips.
6️⃣: Learn trend analysis. Increase positions only after breaking through resistance, and short after breaking down from the main distribution area. After a long-term rise (with significant gains nearing sensitive cycles), expect short-term fluctuations at high levels.
7️⃣: The mindset of being anxious to make money is a big taboo in cryptocurrency trading. If you cannot control your own emotions, greed, and desires, you will not succeed in the market long-term.
8️⃣: Pay more attention to news and information in the cryptocurrency space, understand market trends, and when you notice negative news, timely reduce or clear your positions. Avoid risks at the first opportunity. When you find positive news, buy in promptly and go with the trend!
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