I was once a beginner as well, rushing into the industry and chasing after rising and falling prices. The result was that I borrowed courage and luck, and ultimately lost the hard-earned money due to my lack of resilience.
I have also followed so-called teachers in the industry to do contracts and learn technical analysis. Following the teacher to do short contracts on Bitcoin at very critical points, I almost lost everything! I eventually realized that choosing the wrong guide and not having systematically learned spot trading led me down many unnecessary and wrongful paths! Without solid professional skills and understanding of the patterns in the industry, it is very difficult to achieve sustained and stable profits through trading.
After going through many twists and turns, I ultimately chose to study the natural trading theory systematically. I also learned about data analysis in the industry, combining volume and price relationship analysis. Finally, I established a three-dimensional trading system suitable for myself, which is continuously being improved and practiced.
Before the great bull market arrives, to help more new entrants avoid repeating the unnecessary paths I have taken, and to seize the once-in-a-lifetime opportunity of a bull market, I have specially written twelve guiding principles for beginners in trading coins, hoping to help them grasp some trading rules and principles, avoid unnecessary paths and traps, and accelerate achieving stable profits.
Back to the point, I encourage beginners to carefully read, understand, and practice the following trading principles. Feel free to DM me on Twitter for discussions.
1. Only do spot trading, do not engage in contract trading.
Spot trading is a steady stream. Contract trading can lead to total loss. Beginners entering the industry often wish to get rich overnight, have an anxious mindset, and lack professional skills and guidance. Seeing others leverage contracts to make quick money, they also engage in high-leverage contract trading, resulting in quick gains and losses. The final outcome is usually a total loss of principal or even financial ruin, leading to a severe loss of confidence. Some financial experts face heavy debts after leveraging contracts, and news of suicides due to margin calls is not uncommon. Contracts are zero-sum games; compared to spot trading, they require more specialized skills and a good mindset. If beginners cannot even master spot trading, they cannot succeed in the intense competition of contract trading. They must stay away from contract trading and focus on spot trading.
2. Invest with spare money, do not borrow to trade coins.
Trading is 30% technique and 70% mindset! Beginners, if you use your spare money to trade coins and are temporarily trapped or lose a small portion of your funds, maintaining a calm mindset will not affect subsequent trading opportunities. Ultimately, you can wait for the clouds to part and seize good trading opportunities. Conversely, if you are trading coins with borrowed funds, you will be highly anxious and fearful, making you prone to impulsiveness. With such a poor mindset, it is difficult to earn continuous profits, even if you occasionally encounter good coins and make profits.
3. The principle of following the big trend and going against the small trend.
Follow the big trend, which addresses the direction of trading: against the small trend, which addresses the entry point. We all know that swimming with the current is easier and faster, while swimming against the current is very strenuous, even leading to regression. Trading coins is like swimming; it requires going with the flow. When the medium- to long-term trend of the market is upward, buying mainstream coins on dips will make money, and even chasing after rising mainstream coins can also yield profits. Conversely, if the medium- to long-term trend of the market is downward, even buying on dips is counter-trend trading. If you cannot exit in time, you will ultimately incur heavy losses or become trapped.
Therefore, trading coins must comply with the medium- to long-term trend direction of the market. When the market is in a bull market cycle, you must dare to go in heavily with the trend; when the market is in a bear market cycle, you should learn to stay out of the market and rest. This is the principle of following the big trend. So, what is the principle of going against the small trend? When the large trend direction is upward, you should dare to look for a good entry point on dips during a short-term decline in the coin.
4. The principle of right-side entry and left-side exit.
Buying coins can be divided into left-side buying and right-side buying, with profit-taking also divided into left-side selling and right-side selling. As shown in the figure below, during a price decline, choosing to enter on the left side by buying in batches—such as at points A, B, and C—may allow you to buy at a halfway point or even at the lowest point. The left-side buying method is more aggressive and carries higher risks, which is not suitable for beginners. Point D is the entry point after the price breaks through the neck line of the W bottom reversal structure, confirming the right-side buying method. Although you may not buy at the lowest price, it is more stable and certain, suitable for beginners. After buying on the left side, as the price rises, you should sell in batches—small profits for small rises, large profits for large rises, and hold the profit. As shown in the figure, selling at point E belongs to the left-side selling method, while choosing to sell at point F after the price breaks the upward trend line belongs to the right-side selling method. For beginners, prioritizing the left-side selling method is more prudent and maximizes profits.
5. The principle of trading new coins rather than old coins: The coins in exchanges are divided into new coins, relatively new coins, and old coins. Coins that have just been listed on the exchange are called new coins, those listed for a few months are relatively new coins, and those listed for more than half a year are old coins. Traders with larger capital should prioritize mainstream coins such as Bitcoin, Ethereum, and SOL. Traders with smaller capital, including beginners, should focus on new and relatively new coins for better profit opportunities. Why trade new coins instead of old ones? This is because old coins, unless there is a new technological breakthrough or narrative driving them, will not attract new speculative opportunities. Investors are already well aware of them, and there are no fresh stories to tell. Moreover, they have already been speculated multiple times in the market, and the trapped positions are quite serious. It is also difficult for institutional investors to lift them up and attract market funds' attention. New and relatively new coins have new technologies, new tracks, new narratives, and new models, which easily attract investors' interest. When new and relatively new coins complete their bottoming-out and break upwards, there are fewer trapped positions, making it smoother for institutional investors to push them up. Once they break past historical highs, there is a greater space for imagination and a larger potential for profits.
These days, I am preparing for the launch of the divine order that is about to begin!!!
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