I have been trading cryptocurrencies for two years, turning 50,000 into 20 million. After all the struggles and experiences... trading insights.
1. Divide your capital into 5 parts, only invest one-fifth each time! Control a 10% stop-loss; if you make a mistake once, you only lose 2% of your total capital, and only lose 10% of your total capital after 5 mistakes. If you are right, set a take profit of over 10 points. Do you think you will still be stuck?
2. How can we further improve our win rate? In simple terms, it is two words: go with the trend! In a downtrend, every rebound is a trap to lure buyers; in an uptrend, every drop creates a golden opportunity! Which do you think is easier to profit from: catching the bottom or buying on dips?
3. Do not touch cryptocurrencies that have rapidly skyrocketed in the short term, whether they are mainstream or altcoins. Very few cryptocurrencies can go through several main upward waves. The logic is that after a short-term surge, continuing to rise is quite difficult. When high positions stagnate, they will naturally decline later; it’s a simple principle, yet many people still want to take the gamble.
4. Use MACD to determine entry and exit points. If the DIF line and DEA cross above the 0 axis, and then break above the 0 axis, it is a stable entry signal. When MACD forms a dead cross above the 0 axis and moves downwards, it can be seen as a signal to reduce positions.
5. I don't know who invented the term 'averaging down', but it has caused many retail investors to stumble and suffer huge losses! Many people keep averaging down as they lose more, which is the biggest taboo in trading cryptocurrencies, putting themselves in a dead end. Remember to never average down when you're at a loss; instead, average up when you're in profit.
6. The volume-price indicator is the first priority; trading volume is the soul of the cryptocurrency market. When the price breaks out with increased volume at a low level during consolidation, it deserves attention.
7. Only trade cryptocurrencies that are in an upward trend; this way, the odds are maximized and you won't waste time. If the 3-day moving average turns upwards, it indicates a short-term rise; if the 30-day moving average turns upwards, it indicates a medium-term rise; if the 84-day moving average turns upwards, it indicates a main upward wave; if the 120-day moving average turns upwards, it indicates a long-term rise.
8. Insist on reviewing each session, checking if there are changes in your holdings, whether the weekly candlestick trends match your judgments, and if the direction of the trend has changed, timely review and adjust your trading strategy.