1. Why do most retail investors lose money?
Many people think that retail investors do not make money because they can't choose the right coins; in fact, the bigger reason is improper operations. It’s either frequent trading or going all in without considering the overall market trend. Many people can’t resist staring at the market whenever they have free time; seeing a drop makes them anxious, leading them to make moves and ultimately miss out on real market opportunities. Clearly, the coin price trend is downward, yet they stubbornly hold on, turning short-term trades into long-term holds and losing more and more. The correct operation is to select coins with solid fundamentals and growth potential; as long as the overall trend is upward, hold firmly.
2. Opportunities arise from declines; risks arise from increases
Retail investors often love to chase after rising prices and cannot stand it when their holdings do not increase. If their positions are stagnant for a day, they become anxious, always thinking of chasing other coins, which often leads them to buy at high prices. As soon as their holdings experience any adjustment, they can't help but cut losses, regardless of the overall trend, missing out on truly strong coins. In fact, declines are opportunities, especially during a volume-reducing pullback in an upward trend, which is a golden pit.
3. Only engage in operations within your own system
Once you have your own operational system, trading cryptocurrencies will become much easier, and you won't be led by market trends. For example, if I prefer trend-based value trading, I focus only on undervalued sectors with good fundamentals, then add them to my watchlist and wait for market capital to enter before following the trend. Once I make a profit, I exit immediately and look for the next target, decisively and efficiently. This way, I rarely get trapped at high prices, and even if the coin price does not meet expectations, I will exit decisively.
4. Set take profit and stop loss
Trading cryptocurrencies is essentially a probability game, and there will always be times of success and failure. For most people, setting take profit and stop loss is crucial. If the coin price does not meet expectations or falls below a key trend line, you must decisively cut losses and not hold onto false hopes. Similarly, when profits are already considerable, exiting at any time is a good decision; do not aim to sell at the highest point, being able to sell at a relatively high price is already quite good.
5. Learn to diversify your investments; do not go all in
Never put all your funds into one cryptocurrency. If you are particularly optimistic about a coin and go all in, but it retraces by 10%, you will find yourself in trouble. Diversifying your investments can effectively spread risk and give you a chance to turn things around even in a storm.
Trading cryptocurrencies relies not on momentary enthusiasm, but on a long-term mindset and operational strategy. If you want to survive in this market, remember to proceed steadily and not be misled by the fluctuations in the market.