💥 Why can't hot coins make money? Even leading to liquidation!
Recently, I helped a decent-sized spot trader allocate coin positions.
The sectors are vague and chaotic, and then I discovered a problem, which is also the most discussed issue.
He shared with me his holding coins, buying prices, and fund allocation ratios.
Among 18 coins, the ME sector accounts for a small half, with BTC, ETH, and BCH having a significant ratio. This is not a problem.
However, another problem is that the number of new coins actually accounts for over 50% of his holdings. And the loss amount accounts for 30% of the total funds. I checked the buying prices and times of each coin and found that each purchase was of highly promoted coins from the square or some hot spots, often only days apart from the project party's promotion. After buying, I asked him about this kind of purchase, and aside from one or two new coins rising, all others lost money, including Squirrel.
So here I have to expand on this topic, which may offend some people. But I am just a trader, and there is no intention to target any project parties. I still want to remind novice coin friends about trading risks, discussing the topic solely from the perspective of asset allocation and medium to long-term investment trading.
As for hot coins, I won’t name names. These are the words that my fans see the most in my articles or daily trading. I give it a definition:
Hot coins in the crypto space: Announcing that a certain coin is about to go live, until the actual launch time. Various promotional ads, big influencers' recommendations, various news platforms, narratives, themes, etc. You will see this coin everywhere.
Time: Duration, approximately within one week after being listed.
Method: Contract intraday leading technique. At this point, some people will come to argue with me, saying is it suicidal to use contracts for new coins? Yes, this is a mechanism issue. High volatility coins are definitely dangerous for contract trading. But I use 2-3 times leverage to play, mainly for stop-loss issues. It facilitates stop-loss, and I enter using intraday charts; if I'm wrong, I can exit immediately, possibly with a 1-3% stop-loss space. It's good for turning around and won't be a case of pulling for one or two days and then leaving.
Why you shouldn't buy spot: In October, I compiled statistics on all the trends of new coins. The data shows that after a new coin is launched, only 20% of the coins rise, while 80% fall. Moreover, it is extremely rare for a coin to skyrocket after being listed. This probability is very, very small. The logic is clear, and I can't explain it further. Otherwise, this v will be canceled.
Why you shouldn't buy when a new coin is falling: There is no place to die, there is no lowest point, only lower. Don't attempt to catch the bottom of any new coin. You might say there is no risk in spot trading, but an 80% drop might only take three to five days. Can you handle that?
When can you buy new coins in spot: At least one month later, wait until the primary market has sold what it needs to sell, then buy in the secondary market when everyone confirms their positions. Make a dragon turnaround. A good main force won't let a coin keep falling or drop absurdly.
Spot: In my understanding, having a good price, a good time, and good assets to hold for ten days to half a month, six months, or a year is reasonable.
Contracts: Under 5 times, do short-term or swing trading. Steady and solid, keep funds stable, or don't miss the leading coin's market. Testing the waters is a mark of a qualified cryptocurrency trading platform.
The above are my feelings today; perhaps many people have encountered the issues mentioned above. Please think deeply. I don't know if this article will be taken down.
Thank you all for your likes and attention. A genuine trader always considers issues from the perspective of coin friends.
