Chasing Gains? Bottom Fishing? Master These Trading Strategies for a Well-Ordered Approach!
1. Chasing Gains: Enter Rationally, Follow the Trend
The chasing gains strategy might sound like “buy high, sell high,” but in reality, chasing gains does not mean blindly pursuing any price increase. The core of chasing gains is to “follow the trend,” which means entering when the market trend is confirmed to be strong, rather than randomly chasing prices. When the market shows a breakout rise and prices start to steadily increase, chasing gains can help you catch the tail end of a bull market. However, be aware that chasing gains is not a fixed rule; the key lies in assessing the sustainability of the rise.
Practical Tips:
Breakout Confirmation: When prices break through key resistance levels, confirm the strong reaction of market sentiment. This is the best time to chase gains. Volume Confirmation: When chasing gains, ensure that there is an increase in trading volume to confirm that the rise is not fake. Set Stop Losses: It’s easy to be swayed by emotions when chasing gains, so it's essential to set stop-loss levels to avoid losses from short-term pullbacks.
2. Bottom Fishing: Counter-Trend Strategy, Patient Waiting
In contrast to chasing gains, bottom fishing is a counter-trend strategy that is usually applicable when the market experiences a significant pullback or short-term slump. The goal of bottom fishing is to find undervalued opportunities during periods of excessive panic or short-term adjustments, aiming to buy at a lower price. However, bottom fishing does not mean just buying low-priced coins at random; it’s important to enter when there is support from technical and fundamental analysis.
Practical Tips:
Market Sentiment: When market sentiment is extremely low, it often represents the best time for bottom fishing. Excessive panic is often a signal for the market bottom. Trend Confirmation: Do not blindly wait for the lowest point, as the market is often difficult to predict accurately. It is advisable to wait for initial reversal signals before considering entry. Gradual Positioning: Bottom fishing requires patience; gradually build positions to avoid investing too much capital at once and to reduce risk.
3. Combining Strategies, Flexibly Adapting
The strategies of chasing gains and bottom fishing are not mutually exclusive; they can be flexibly combined. For instance, during a bull market, you can chase gains to capture the rising trend, while during market corrections, you can flexibly apply bottom fishing strategies to accumulate quality assets at lower prices. The key is to learn to identify market cycles and trends, determining when to chase gains and when to bottom fish.
Practical Recommendations: