Before entering the cryptocurrency market, there are some basic knowledge that novices must understand in order to avoid unnecessary losses in a risky investment environment.

1. Choice of wallet and exchange
For beginners, it may be safer to store your cryptocurrency on a well-known exchange rather than managing your own wallet. Exchanges usually have better security measures and insurance mechanisms, but it is still important to choose an exchange with a good reputation.

2. Be cautious with new coins
New coins or new projects tend to fluctuate wildly and lack stable historical data and market recognition. For novices, it is best to avoid these high-risk investment targets. A prudent choice is to start with widely recognized currencies such as Bitcoin and Ethereum.

3. Stay away from contract trading
Contract trading is extremely unfriendly to novices due to its high leverage and complexity. Even experienced traders may suffer huge losses due to the drastic market fluctuations. If your understanding of the cryptocurrency market and investment strategy are not clear enough, buying Bitcoin or Ethereum is a safer choice.

4. Mental preparation
Before entering the cryptocurrency world, you need to be mentally prepared: extreme market volatility is the norm. Bitcoin and Ethereum, as currencies with larger market capitalizations, are relatively stable, but you still need to be cautious about other small currencies (altcoins), as they are very likely to return to zero for various reasons.

5. Position Management
Position allocation is the cornerstone of successful investment. Never invest "all in", especially in the highly volatile field of crypto market. Maintain a certain liquidity (keep "bullets") so that you can adjust your strategy in time when the market turns.

Position management and mentality adjustment
- Position yourself: Determine your goal in entering the cryptocurrency world, is it short-term trading or long-term investment? This will affect your operating strategy.
- Short-term operation: Short-term traders should sell near the pressure level, do not be confused by the short-term rise of the market, and keep short-term thinking. Do not change your original intention just because the price rises, try to switch to long-term holding, or trade frequently when the price falls.
- Long-term investment: If you choose to hold for the long term, you need to be patient in the face of market pullbacks. Long-term strategy means that you should focus on the final result, not the fluctuations in the process. Even if you face a 50% or even 100% retracement, you must have confidence that the market will continue to rise.
- Swing trading: For swing traders, the strategy is to reduce positions when prices rise and to cover positions when prices fall back. The key is to avoid missing out on opportunities to rise again due to price corrections and reduce the risk of missing out.

Adjust your mindset
During the investment process, it is equally important to manage your mentality:
- Keep a stable mindset: No matter how the market changes, keep your emotions stable and avoid being driven by greed or fear.
- Learning and Adaptation: Continuously learn market knowledge and adapt to changes in the market environment.
- Rational Decision Making: Make investment decisions based on data and analysis, not emotions.

In summary, you should be fully prepared before entering the cryptocurrency circle. You should not only understand the basic knowledge of the market, but also manage your investment mentality and positions. Only in this way can you be invincible in the cryptocurrency market full of opportunities and challenges.