Here are some practical tips for the cryptocurrency market:
Cost Calculation and Position Management
- Accurately calculating cost dilution is essential. For instance, after investing and adding funds, you cannot simply average to calculate costs. Understanding the cost calculation method helps manage positions rationally and avoid making wrong decisions during price fluctuations.
Utilizing Compound Interest
- Compound interest can have a significant effect on returns in the cryptocurrency market. If you can maintain a certain daily return rate, your assets may grow substantially over multiple trading days. However, it is important to note that in practice, consistently generating returns to maintain compound interest is challenging, requiring a mature trading strategy and a good mindset.
Understanding Take Profit and Stop Loss and Probability
- Be clear about the probability of your investment success, and set take profit and stop loss points reasonably. Execute strictly according to your trading plan without being swayed by emotions; only then is it possible to achieve a good return rate after multiple trades.
Controlling Greed
- Greed is a major enemy in cryptocurrency trading. During trading, even if there is a good return rate, if you cannot control your desire to gain more profit, it can easily lead to trading failures.
Contract Trading Position Management
- In contract trading, position management is crucial. Compared to many people using a larger capital (20%-30%) as the base position, using 2%-5% of capital with a 20x leverage approach can better control risks and reduce the emotional fluctuations affecting trading.