The three most vulnerable types of people in the cryptocurrency world, and how to avoid these mistakes and keep your wealth:
1. People who go all-in with a heavy spot position without a stop loss:
This approach is simply dancing on the edge of a knife. The market is ever-changing, and no one can predict how big the next fluctuation will be. If you go in with a heavy position and do not have a stop loss, your assets may be "cut in half" if the market is slightly unfavorable. For example, the market crash in May 2021 caused many people to suffer heavy losses because they did not set a stop loss.
2. People who like to go all-in with a heavy contract position and high leverage:
High leverage can indeed allow you to make considerable profits in a short period of time, but it is also a double-edged sword, and the risk is magnified several times. Sudden market fluctuations, such as news events or sudden changes in market sentiment, will cause you to blow up your position instantly, and all your funds will disappear.
3. People who do not stop profits in time when they make money, and like to carry orders all the time when they lose money:
This mentality makes many people miss opportunities or even suffer greater losses. Greed makes you miss the opportunity to stop profits, and fear makes you unwilling to stop losses when you lose money, and the final result is often a worse loss. Especially in some volatile altcoin investments, this mentality is particularly fatal.
How to avoid these mistakes:
Reasonable position management:
Never put all your eggs in one basket. Diversified investment can effectively reduce risks. Moreover, only use a part of the funds for each transaction, and do not go all-in to cope with the unpredictability of the market.
Set stop loss and take profit:
Before each transaction, you must plan the stop loss and take profit points to prevent the market from going unfavorable and stop loss in time to protect the principal. When you earn the expected return, you must also stop profit in time to lock in profits.
Use leverage with caution:
Leverage is a double-edged sword. Be careful when using it, and do not pursue high leverage. Reasonable leverage multiples can help you gain returns while controlling risks.
Maintain a good mentality:
Investing is a marathon, not a sprint. Don't lose confidence because of a temporary loss, and don't be blindly optimistic because of short-term gains. Only by calm analysis and rational decision-making can you be invincible in a volatile market.
