Today, I had tea and chatted with a cryptocurrency expert who shared his investment experience: starting with 400,000 in the crypto market, experiencing losses down to just 80,000, but now his assets have exceeded 10 million. The key that changed his fate was persistent learning and cognitive improvement. He summarized five valuable insights, hoping to inspire everyone!
1. Do not rush to stop losses
When the market drops sharply in the morning, do not rush to stop losses. This is usually an overreaction to negative news from the previous night; it is advisable to patiently wait for market repair and reversal. When the market rises sharply towards the end of the session, also be cautious about chasing prices, as some major players may be testing the waters or inducing buying, and the next day may open lower to suppress and accumulate.
2. Make good use of trading volume
Trading volume is an important tool for judging market direction. If there is an increase in price with decreasing volume, it indicates that the main players have strong control; while a decrease in price with decreasing volume suggests that panic selling has not yet subsided, and the market may continue to decline.
3. Understand sector structure
Learn to analyze the top structure of the sector. Generally, market trends are composed of five waves: the first wave triggers speculation, the second wave undergoes a washout adjustment, the third wave is the main upward wave, the fourth wave shows complex divergences, and the fifth wave is for pulling up to sell. Note that market changes are unpredictable, and the five waves do not always exist. When a leading stock experiences stagnation, the supplementary rise may have already peaked.
4. Pay attention to sector dynamics
When the price of Bitcoin accelerates upwards, certain altcoin sectors often experience significant increases, which may trigger a reversal in Bitcoin. Just observe whether the leading stocks stop falling and start rising, and the index will subsequently recover.
5. Focus on one strategy
Especially for friends new to the market, it is recommended to focus on studying one trading strategy and master the techniques within it. Greed often leads to loss, and superficial learning can easily result in being taught a lesson by the market. Do not switch trading modes casually; take the time to learn, and once stable profits are achieved, then expand to more techniques for better integration.
As an investor, while pursuing high returns, it is essential to carefully assess risks and invest rationally.