The fatal mistake that ordinary people make when trading cryptocurrencies is: holding only a small position when the price rises, while holding a large position when the price falls significantly. The fundamental reason for this phenomenon lies in poor trading habits. When investors are lucky enough to buy a rising cryptocurrency, their limited position often results in limited profits. As the price continues to rise, investors find it hard to resist temptation and start to increase their positions, attempting to gain more profit. However, this behavior of increasing positions often lasts until the moment the market corrects, leading to a significant loss of the profits gained from the initial small position, while the later large position suffers losses from start to finish. Although sometimes increasing the position can coincidentally align with the right timing, in the long-term process of trading cryptocurrencies, this poor trading habit will eventually lead to major losses.
To avoid this habit, investors should develop good trading strategies:
Fixed Position Building: Before trading, investors should set a reasonable position ratio and strictly adhere to it. Avoid adjusting positions arbitrarily due to market fluctuations, which can lead to emotional trading.
Only Reduce After Building: Once a position is established, investors should adhere to the principle of 'only reducing positions, not adding further'. Even if the market continues to rise, they should remain calm and avoid excessive chasing of prices. Conversely, when signs of a market correction appear, they should promptly reduce positions to lower risk.
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