In cryptocurrency trading, there is a relatively conservative but effective method. Although this method may weaken some profits, it is suitable for long-term learning and accumulation of experience. First of all, when conducting transactions, there are three points that need to be kept in mind to avoid falling into risks:
1. Don’t buy when the market is rising
Never chase higher when the market is rising. We should follow the principle of "be greedy when others are fearful, and be fearful when others are greedy". Buy when prices are falling and make it a habit to be contrarian.
2. Do not engage in pressure trading
Pressing orders is often accompanied by high risks, and this type of behavior should be avoided.
3. Don’t operate with a full position
A full position will put investors in a passive state, because opportunities are everywhere in the market, and a full position will increase the opportunity cost and limit the ability to respond flexibly to market changes.
### Six tips for short-term trading
1. After consolidating at a high level, it may reach a new high, and after consolidating at a low level, it may reach a new low.
When currency prices consolidate at a high level, they tend to rise again; while after consolidating at a low level, the price may fall further. Therefore, we should operate after the market direction becomes clear to avoid entering the market prematurely.
2. No trading during sideways trading
Many people lose money when trading sideways, mainly because they are unable to resist the urge to trade. Therefore, entry should be avoided during sideways trading.
3. Buy when there is a negative line, sell when there is a positive line
When a negative line appears on the K-line chart, we can consider buying, and when the positive line closes, we should consider selling. This is a relatively stable operating strategy.
4. When the decline slows down, the rebound will also be slow; when the decline accelerates, the rebound will be rapid.
When the market decline slows down, the rebound is usually smaller; when the decline accelerates, the subsequent rebound will also accelerate.
5. Use the pyramid method to build a position
When building a position, you should use the pyramid method to gradually buy in batches. This is a time-tested value investment strategy that helps spread risks.
6. Entering a consolidation state after a long-term rise or fall
When a cryptocurrency experiences an extended period of gains or losses, it often enters a sideways phase. There is no need to clear the position immediately when the market is trading at a high level, and there is no need to buy a full position when the market is trading at a low level. After consolidation, the market will usher in changes, and positions need to be flexibly adjusted according to the direction of market changes. If the price changes from high to downward, positions should be cleared in time to avoid losses from expanding.
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