The five iron laws of cryptocurrency trading are summarized. Read them patiently to help you avoid years of detours in cryptocurrency trading. There are no shortcuts in cryptocurrency trading, but there are paths. Share them with friends, hoping that they can take shortcuts on the road of investment and gain wealth.
First, regarding holding positions, if you can’t hold on to a good position, don’t hold on to a bad position. If you can’t let the profits run, at least don’t let the losses run.
Second, regarding positions, many people are promoting the magical technical positions. In fact, the magical thing is never the technical positions, but the positions. Knowing when to use large positions will solve the core problem in trading. There is no rush for long-term trading. Do not place more than one-tenth of the position each time. The only reason to enter the market in the short term is that the market is strong. Making money depends on the strength of the market, not on your ability. Slow market is half a beat slower, and slow is fast.
The third rule is about trends. Being an enemy of trends is dangerous, but being a friend of trends is fatal. You are using trends, and trends are also using you. The essence of a bullish trend is to bring you to a high position, make you feel good about yourself, and buy the order at the same time. Dealing with trends is like fighting with a master. You need to keep a clear mind at all times. You can wait until the trend is established before entering the market, but you must not wait until the trend breaks before leaving the market. By then, it will be too late. You can enter the market slowly, but you must leave the market quickly.
Fourth, regarding profit taking, sometimes you sell too early, sometimes too late, how can you sell at the right time? Don’t waste your time on this unanswered question. Many people pursue the high point of selling. However, a world-class trading master said: “I made money by selling too early.”
There are several profit-taking methods that I personally agree with. The first is the next-day settlement method, which means you should stop profit when you see a good profit the next day. The second is the first-line understanding method, which means you should stop profit when you see a negative line if there is no negative line or no shipment. The third is the profit-taking method that does not create a new high, which means you should stop profit when neither the highest price nor the closing price creates a new high. The fourth is the profit-taking method that breaks the moving average, which refers to the general principle of stopping profit when a certain moving average is broken, with strict entry and loose exit, strict buying points and loose selling points.
Article 5. About stop loss. I will not repeat the importance of stop loss. Here is a brief introduction to the effective single K-line stop loss method. The first point of the entry K-line cannot be broken. If it is broken, stop loss should be made. Hesitation is because there is no clear stop loss standard. Before placing an order, you should tell yourself how much loss you may bear for this order. Put psychological preparation in advance, instead of asking around whether to stop loss after being trapped. Good positions cannot be held, and bad positions must not be held. This is basically right.
The above five cognitions belong to the top-level design of trading, which belongs to the law of Taoism. Trading is the realization of cognition. Beyond the law of Taoism are techniques and tools. Every penny earned in the stock market is ultimately the realization of cognition. There is no magical technology, only magical risk control. If you keep an eye on the risks, you are not far from success.
