"Be greedy when others are fearful." After yesterday's experience, is now the right time to enter the market? Here are 6 tips from Lao Likes:
The formula for bargain hunting in this round of bull market: mainstream coins + mainstream memes
Don't touch the contract
Stop loss in time, here are several stop loss strategies
Step-by-step bottom-picking
Avoid over-diversification of positions
Get enough stablecoins
1. The formula for bargain hunting in this bull market: mainstream coins + mainstream memes
When the market drops sharply or undergoes a major adjustment, it usually brings the best opportunity to "go beyond the bottom", but it is recommended to buy bottoms in batches and not All In. In addition, it is recommended to buy mainstream coins + mainstream memes at the bottom.
Meme Coin Dip Strategy: For meme coins that have high trading volume and remain popular, they will usually follow a relatively predictable pattern.
Whenever such a token reaches a new all-time high (ATH), the retracement will most likely not exceed 60%. This means that you can consider making strategic purchases at the following times:
When the coin retraces 40% to 60% from ATH
Trading volume remains at a high level
The market’s discussion of the token remains unabated
Taking $WIF as an example, the current maximum retracement after ATH is almost 59%. This strategy takes advantage of the volatile nature of meme coins and market sentiment.
However, there are still risks, memes can rise as fast as they fall, and decisions need to be made with caution and in conjunction with other technical analysis and market research.
Source: Biteye
2. Don’t touch leverage, especially contracts
The reason is simple, liquidating your position will leave you with nothing. Coincidentally, SynthaMan revealed in the post that he had lost all $SNX tokens due to liquidation due to liquidation.
Secondly, everyone is happy to be able to carry the order, but the funding rate is often a cost that is ignored. Finally, contracts have a negative impact on emotions and psychology, which further affects trading operations.
3. Stop losses in time. Here are several stop loss strategies:
If a position falls below a key support level or no longer fits your investment logic, don't be afraid to sell to protect your principal.
It is better to accept a small loss than to risk a big loss. When market conditions improve, you can re-enter the trade. 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 improper timing and strategies, it will often lead to serious losses, or even zero.
Specifically:
Stop Loss Quickly: If the market moves against you, act quickly and accept a small loss. For example, it's not terrible to accept taking a 5% loss.
Set partial stop loss points: Instead of clearing all positions at a certain price point, you can set multiple price points and reduce a certain proportion of the position at each point. For example, if Bitcoin drops below $60,000, you could choose to sell 10% of your position.
Be flexible in finding buying points: If the market really reverses, you can buy again when the support level is reconfirmed. If the market continues to fall, re-enter at a lower price to get a better buying price. Although doing so will incur some transaction costs, it can effectively control risks.
In short, it is smarter to pay a small loss of 5% in exchange for protection from a possible 50% plunge.
4. Pick the bottom step by step
Buying All In at the bottom may make you break your thigh. 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 buying amount in a "pyramid" form. At the same time, set a stop loss point for each purchase to control risks. Then adjust the strategy in time as the market changes.
5. Avoid excessive diversification of positions
Concentrate your investment in 10 (no more than 20) tokens that you recognize, rather than spreading your portfolio across too many tokens, making it easier to proactively manage your investments when the market fluctuates.
The more tokens you trade, the greater the risk of loss. Over-diversification can reduce the overall performance of a portfolio because it is difficult to effectively manage too many positions during a market crash, especially not to hold too many altcoin positions.
6. Get enough stablecoins
Keeping at least 20% of your portfolio in stablecoins can serve as a “bullet” to seize opportunities during dips without having to be forced to sell existing positions at inopportune times.
Even if the market goes up, holding a certain percentage of stablecoins will give you enough liquidity to operate when the market pulls back.
If you can’t remember the above investment rules, remember to preserve your principal and survive first. This is the most important thing!
[Disclaimer] There are risks in the market, so investment needs to be cautious. This article does not constitute investment advice, and users should consider whether any opinions, views or conclusions contained in this article are appropriate for their particular circumstances. Invest accordingly and do so at your own risk.
This article is reprinted with permission from: "Rhythm Blockbeats"
Original author: Viee, Biteye
