In the cryptocurrency market, three common problems can often be observed:
Hold on when you lose money, sell when you make a profit: Many investors choose to hold on when they suffer losses, and once their accounts have slightly turned losses around or recovered, they are eager to sell, completely ignoring market trends and trading volume. This practice often leads to infinitely magnified losses, but minimal profits.
The correct strategy should be: Hold on when you make a profit, set the stop loss point at the cost line, and allow profits to have sufficient room to grow. When market trends or expectations change, you should leave the market quickly. Assuming that after buying, if the loss reaches 5% of the principal, consider stop loss, and if the loss reaches 10%, resolutely leave the market, even if the winning rate is only 50%, it can ensure that the overall return is positive. However, the greed in human nature makes it rare for people to truly achieve unity of knowledge and action.
Ignore trading volume: When many retail investors buy currencies, they often turn a blind eye to the key indicator of trading volume and do not conduct in-depth research. In fact, the rise of currencies requires substantial capital inflows to support it, which is often ignored by retail investors.
Over-diversification of holdings: A common problem among retail investors is that they have limited capital but hold dozens of currencies, hoping that one of them will rise sharply and become rich. However, this way of diversifying investments often leads to meager returns. Usually, only a few currencies rise, while all fall.
More importantly, almost no one can hold a currency until it rises a hundredfold, unless they completely forget about their investment, and such success depends more on luck.
