Perhaps some will say that short-term trading is speculation! First of all, let me clarify that short-term trading is not speculation. Real short-term trading is an investment behavior that requires mastering certain market operation rules and strong skills. Short-term trading actually tests a person's skills and patience. Those who excel in short-term trading must have seen many candlestick charts, studied their trends, and summarized general rules.
Candlestick charts not only reflect short, medium, and long-term fluctuations, but also can tell you which projects have good market capitalization management and which projects plummet after being dumped, purely to profit from naive investors. For example, we have mentioned several times before that there are many forked coins of BTC, but in reality, aside from BCH, other forked coins' candlestick charts are unreadable.
These forked coins' candlestick charts have been declining since the start of trading, with basically no fluctuations, sliding down like a slide, giving investors no chance to escape. From their candlestick charts, it can be seen that the speculators no longer hold large amounts of coins; these coins are concentrated in the hands of retail investors, so no one is driving the price up, and they have basically become worthless. Many inexperienced traders have turned short-term trades into medium-term, then to long-term, and ultimately to worthless holdings.
In addition to understanding candlestick charts, we also need to adhere to several major principles of short-term trading. The first is the principle of profit withdrawal: when buying a cryptocurrency, if you earn over 10%, you should start implementing capital protection. (If it later drops to the purchase price, sell unconditionally). If you earn around 20%, then set a rule that this trade must earn at least 10% to sell. To maximize profits, when earning 20%, set a rule that you won’t sell unless the profit drops to only 10%, unless you are very certain of a technical peak; otherwise, do not sell.
Secondly, there is the principle of capital protection: when buying a certain cryptocurrency, if it gradually loses 15% (this figure is personal; I suggest 15% as the most suitable), then cut losses and exit. This is to stop losses in a timely manner. If it rises again afterward, it doesn’t matter; after all, that time was an incorrect entry point, which was a wrong trade. Mistakes come with a price, and that price is the loss. Losses will make you remember, and with that memory, you won’t think of chasing after it.
In summary, short-term trading should adhere to some basic principles, especially noting that: quick entry and exit does not mean frequent trading, chasing trends does not mean making blind choices, taking profits does not mean being timid, staying on the sidelines does not mean avoiding the crypto space, and trading points do not need to be forced to hit the lowest or highest prices. Some strategies or points to pay attention to in short-term investing:
1. Position: The position for short-term trades should not be too large, at most 10% of your total position. The rest should be allocated to long-term or used for averaging down. After all, long-term positions are the foundation of our profits.
2. Cryptocurrencies: Although we are engaged in short-term trading, try to avoid touching currencies you do not understand. Prioritize those you are familiar with and can comprehend. If it is a bear market, I suggest only dealing with mainstream currencies or even Bitcoin, because these currencies, even if stop losses are not timely, will only result in temporary losses, while altcoins may not be the same; being stuck could mean forever.
3. Time: Personally, I define short-term trading as anything within half a month to one month. Unless you can constantly monitor the market or have related automated software, I do not recommend trading in short bursts of a few hours. The specific short-term duration should depend on market trends, ranging from a few days to about ten days.
4. Take profit and stop loss: I have found that significant losses in short-term trading are often due to untimely take profit or stop loss actions. Therefore, when participating in short-term trades, everyone must devise a rough take profit and stop loss plan. This plan does not need to be overly detailed; just having a general direction is enough, and then adjust according to market changes.
In addition to sharing some skills for short-term trading, I have also summarized some tips for trading cryptocurrencies, hoping to be of help to investors.
1. Familiarize yourself with various technical analyses of candlestick charts.
2. Do not go fully invested or fully short in a short time.
3. Give yourself a military order to take profit and stop loss in a timely manner.
4. During rapid price fluctuations, try not to trade.
5. Do not put too much pressure on yourself; maintain a balanced mindset.
6. Do not look at too many analyses from others; everyone has different opinions. Price trends are influenced by numerous factors, and all predictions about the future are fifty-fifty, half right and half wrong. Just believe in yourself.
7. Overtrading can affect your physical health, but when a significant rise or fall occurs, you must use your wisdom to go long or short to make money.
In the upcoming layout direction, I will guide everyone to aim for the lucrative opportunities in altcoins, especially those with high potential. An expected space of ten times or more is not a problem. If you want to make big money during a bull market, like and leave a message, and I'll help you plan for the entire bull market!
