1. Trend selection, 2. Coin selection, 3. Timing, 4. Take profit, 5. Position management
Trend selection: The importance of trend is self-evident. Finding the right trend and following the right direction is essential. As the saying goes, even pigs can fly in the right wind. The trend in cryptocurrency is quite obvious, with periodic trends brought about by halving every four years, combined with the factors of the Federal Reserve's monetary policy. Understanding these two aspects and selecting the trends that benefit your trading while grasping the overall direction is not difficult.
Choosing coins: Once you choose the right direction, you need to choose which coin to buy. Most coins accumulated at the bottom of a bear market will perform well in a bull market, but there are also projects like EOS that perform poorly. Therefore, choosing the right coin is crucial.
Regarding the method of selecting coins, you can explore through observing the fundamental information of the coins, signs of institutional accumulation, price strength performance, as well as technological evolution, emotional evolution, narrative development, and other methods.
Timing: Once you have selected your desired token, you need to observe the market to find the right time to enter. This step is also crucial. Good coins are often available, but good entry opportunities require professional data support to buy in. Lower entry prices and suitable entry time points can help keep your mindset calm during large fluctuations and maximize profits. I recommend that everyone learn candlestick charting techniques. Various schools of thought, Dow theory, and derived charting methods, or Wyckoff's method, as well as commonly used modular trading systems in quantitative trading, and the principles of institutional orders currently used by institutions, are all classic technical theories. Mastering these techniques can help you find suitable buying opportunities.
Take profit: It is often very difficult to take profits precisely. I commonly use the method of taking profits in batches, leaving the last 10% of the position to feel the market's emotional fluctuations.
Finally, the most important aspect is position management. This step is almost crucial to the length of your lifeline in cryptocurrency. If this step is not done well, you basically cannot achieve sustained and stable profits. You can adopt the principle of 334 or the principle of 136. The core is to control your position to control your mindset and emotions.
When you find the right opportunity to hold 30% of a coin, you won't be hoping for a surge; instead, you'll think about adding more when it pulls back. If you start with a full 100% position, any pullback will affect your mindset.
If there is a direct surge at this moment and you also have 30% of your position in play, you will have no psychological pressure. You can attack when the opportunity arises and defend when necessary. This way, you can maintain a calm mindset for trading.
The crypto space is not short of opportunities; what is lacking is your clear mind when facing opportunities and risks.