This Black Monday was caused by concerns about the US economic recession, which led to the collapse of the market. In addition, industry giants were not optimistic about the US economic outlook and global geopolitical turmoil. In the short term, these will keep the market in a period of policy volatility.

According to the cyclical laws of finance in the past, crises and opportunities are born together. Generally, economic downturns, market fluctuations and investment losses may bring anxiety and panic, but they also provide investors and companies with opportunities to regroup and find innovative opportunities.

That is what the cryptocurrency circle often says, be greedy when others are fearful. After experiencing 94, 312, 519, and 805, is the plunge a suitable time to enter the market? Which stocks should be bought at the bottom?

The formula for buying the bottom in this round of bull market: mainstream coins + mainstream memes

When the market crashes or makes major adjustments, it usually brings the best "bottom-fishing" opportunities, but it is recommended to bottom-fish in batches and not all in. In addition, it is recommended to bottom-fish mainstream coins + mainstream memes.

Meme coin bottom-fishing strategy: For those meme coins with large trading volumes and continued popularity, they usually follow a relatively predictable pattern.

Whenever such tokens reach a new all-time high (ATH), their retracement is likely to be no more than 60%. This means that strategic buying can be considered at the following times:

When the token pulls back 40% to 60% from ATH

Trading volume remains at a high level

The market is still discussing the token

Don't touch leverage, especially contracts

The reason is simple, a liquidation will leave you with nothing. Coincidentally, today Synthetix’s former CFO SynthaMan revealed in a tweet that he had lost all his SNX tokens due to liquidation.

Secondly, everyone is happy if the order can be carried through, but the funding rate is often an overlooked cost. Finally, the contract has a negative impact on emotions and psychology, which further affects trading operations.

Stop loss in time, here are some stop loss strategies

If a position falls below key support or no longer fits your investment logic, don't be afraid to sell to protect your capital.

Rather than risking a big loss, it is better to accept a small loss. When the market conditions improve, you can re-enter the market. It is important to control risk when the market starts to fall, rather than waiting until the decline deepens.

Especially when trading those "junk coins" with large fluctuations, if you choose the wrong timing and strategy, it will often lead to serious losses, or even zero.

Specifically:

Quick stop loss: If the market shows an unfavorable trend, take quick action and accept a small loss. For example, it is not terrible to accept a 5%-10% loss. Don't be afraid of making mistakes. If you make a mistake, admit it and make it back next time. What is terrible is that you don't admit your mistakes and insist on holding on. First, the losses will increase and affect your mentality; second, if there is a good opportunity, you may not have the bullet to seize it, which will occupy the utilization rate of funds.

Find buying points flexibly: If the market does reverse, you can buy again when the support level is reconfirmed. If the market continues to fall, re-enter the market at a lower price to get a better buying price. Although this will incur some transaction costs, it can effectively control risks.

In short, it is a smarter approach to pay a small loss of 5% in exchange for protection against a possible 50% drop.

Step-by-step bottom-picking

Going all in to buy the bottom may make you lose money. You can combine technical and fundamental analysis to set several possible entry points, such as historical support levels or important moving average positions.

When the price hits these preset points, start buying in batches, and gradually reduce the purchase volume in a "pyramid" form, while setting a stop loss point for each purchase to control the risk. Then adjust the strategy in time with market changes. This is also what I have always emphasized to everyone in the group. Bottom-hunting should be done in batches. It is almost impossible to buy at the real bottom. For example, the day before yesterday, the price of the pie fell to 50,000. There are always people who want to wait for 45,000 or 40,000 to buy. Although there is a chance that it will reach the price, what if it doesn't reach the price? Will you wait until the price reaches 70,000 before chasing it?

Avoid over-diversification

Focus your investments on the tokens you recognize, rather than spreading your portfolio across too many tokens, so that you can more easily actively manage your investments when the market fluctuates.

The more types of tokens you trade, the greater the risk of losses. Over-diversification will reduce the overall performance of your portfolio because it is difficult to effectively manage too many positions when the market falls, especially not holding too many altcoin positions.

Get enough stablecoins

Keeping at least 20% of your portfolio in stablecoins can serve as a “bullet” to seize opportunities when prices fall, without being forced to sell existing positions at inopportune times.

Even if the market is rising, holding a certain percentage of stablecoins will allow you to have enough liquidity to operate when the market pulls back.

If you can't remember the above investment rules, remember to protect your capital first and survive. This is the most important thing! Only by staying at the table can you have a chance to continue.

Later, I will bring you analysis of leading projects in other tracks. If you are interested, you can click to follow. I will also organize some cutting-edge consulting and project reviews from time to time. Welcome all like-minded people in the cryptocurrency circle to explore together.