Three Major Principles of Short-Term Trading

Profit Withdrawal Principle: When you buy a cryptocurrency and it gains over 10%, you should start implementing the capital protection principle (if it later drops to the purchase price, sell unconditionally). If it gains around 20%, then the rule is that this trade must earn at least 10% before you sell, in order to maximize profits. When you earn 20%, you set a rule that you won't sell unless your profit drops to only 10%, unless you are very certain about a technical peak. Similarly, if you earn 30%, you must sell unconditionally if it drops to a profit of 15%. This principle is about allowing profit withdrawals to help roll over your profits if you do not have the technical ability to judge peak points.

Capital Protection Principle: After buying a certain cryptocurrency, if you see a gradual loss of 15% (this number is personal; 15% is generally suggested), you should cut your losses and exit. This is to stop losses in a timely manner. If it later rises again, that’s fine; after all, it was a wrong entry point, which was a mistake in trading. Mistakes have a cost, and that cost is the loss, which helps you remember and not chase after losses. We must ensure that we do not let our mistakes turn into pain. Therefore, setting a stop-loss as soon as you open a position is a very necessary condition in futures trading.

Original Price Buyback Principle: The principle for buybacks at the original price is as follows: If you sell and later it drops, and you are optimistic about it, you should buy back the same amount of coins. Remember, the same amount, because you sold at a high position; this way, your quantity of coins remains the same, but you have some extra funds. If you sell the coins, and after they drop you do not buy back, and they later rise back to your selling price, you must buy back unconditionally. This only wastes transaction fees but can avoid many missed opportunities. This principle can be repeatedly executed with the capital protection principle: if it rises back, buy back at the original price, and if it drops again, protect your capital. If you do this multiple times, you don't need to trade at the current price point; this proves that your chosen point is neither a support nor resistance level, which makes it easy to break through. Re-select another price point.

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