A reasonable step-by-step investment strategy combined with rolling positions is a possible path.
A reasonable step-by-step investment strategy combined with rolling positions is a possible path.
First is the step-by-step investment strategy. Assume the total account fund is 200,000, and the maximum loss limit is set at 20%, which is 40,000. In this case, a relatively risky yet reasonable loss distribution plan could be: initially invest 10,000, then invest another 10,000 the second time, and 20,000 the third time. This arrangement ensures at least three opportunities to respond to market changes; as long as one of the investment decisions is correct, there is a possibility of profit or the ability to continue to stand in the market.
Grasping market trends is crucial. Trend trading is more challenging compared to a sideways market, as it requires investors to have a firm belief in their positions. In an upward trend, any significant major pullback is a good opportunity to go long. If the initial entry opportunity is missed or if one has exited early, then patiently wait for the market pullback to reach 10% to 20% before decisively entering to go long.
Setting profit-taking and stop-loss targets is a core element of achieving profitability. To achieve a total profit that exceeds total losses, the following guidelines can be followed: each stop-loss amount should be controlled within 5% of the total funds, while each profit should exceed 5% of the total funds, and ensure that the overall trading win rate exceeds 50%. Only by meeting these conditions can one reap profitable results in cryptocurrency investments.
Avoiding frequent trading is not to be overlooked. Given the 24-hour continuous trading nature of the cryptocurrency market, novice investors are easily caught in the trap of frequent operations. However, frequent trading often leads to mistakes, and after a mistake, the mindset can easily become unbalanced, potentially leading to worse investment decisions. Therefore, it is essential to restrain the impulse for overly frequent trading and always maintain a calm and rational investment attitude.
During the implementation of the rolling position strategy, there are many points to pay attention to. Patience is indispensable; while rolling positions may bring substantial profits, one must patiently wait for high-certainty investment opportunities. High-certainty opportunities usually appear in the consolidation phase after a sharp drop, and once there is an upward breakout, the probability of success by following the trend is quite high. Additionally, in the rolling position strategy, it is recommended to focus on long positions and avoid shorting as much as possible to reduce investment risks and increase the likelihood of profitability.
