Profit is simple:
"Buy a bag of rice and sell it."
But why do you turn the rule against yourself? Buy expensive and sell cheap?!
If the problem was at the wrong time of purchase, it is not reasonable to hold on to a sinking ship and take more risks with it.
Ok, what's the solution? How can I save my skin?
In the world of cryptocurrency trading and financial markets, price declines and corrections are normal and frequent. However, what distinguishes a successful investor from others is the ability to control oneself and make strategic decisions during these periods. In this article, I will discuss how to deal with a market decline without rushing to sell or holding on to a losing position incorrectly, while providing the best strategies to overcome volatility and reach the right selling areas.
📊 First: Why does the price correction or price decrease occur?
• A correction occurs when prices fall by a certain percentage after a strong upward wave.
• It is usually the result of:
• Earn profits from major investors.
• Negative news or market rumors.
• Panic selling pressure among small traders.
⚠️ Correction does not mean a market collapse - it is a healthy part of market movement to ensure its continuity.
🚫 Don't rush to sell because of panic.
1. Selling during a big decline causes an actual loss:
• When you sell your currency during a temporary decline due to fear, you are turning your theoretical loss into an actual loss.
2. The market will rise again over time:
• Markets go through cycles of ups and downs.
• Those who have patience and “long breath” often overcome these stages with subsequent profits.
⚖️ Balance and avoid stubbornness and clinging to losses
Conversely, continuing to hold on to a losing trade indefinitely is like holding on to a sinking ship.
• Don't be stubborn:
• If the project or asset has lost its basic elements of success, there is no point in holding on to it.
• Selling to reduce the loss and investing the money in a better asset may be the right choice.
• Re-evaluate your position:
• Is the decline due to temporary factors or fundamental problems with the asset or the market?
• Use fundamental analysis and charts to determine market direction.
🛡️ Effective strategies for dealing with correction waves:
1. Use Smart Stop-Loss:
• Place a stop loss order at a specific level to avoid large losses.
• Do not place it too close to the buy price to avoid selling on small fluctuations.
2. Applying the Dollar Cost Averaging (DCA) strategy:
• If you believe in the project in the long term, buy small amounts of the currency during dips.
• This way, you will lower your average purchase price and increase your chances of profiting on the upswing.
3. Identifying support and resistance areas:
• Use technical analysis to identify support areas (potential price bounces) and resistance areas.
• Selling at resistance areas yields higher profits, and buying at support reduces risks.
4. Analysis of causes:
• If the decline is due to temporary news or general selling pressure, the market will most likely rebound.
• If there is a major problem with the project, come up with a rational decision.
5. Secure profits gradually:
• Sell part of your positions when the price rises to make some profit, and keep the other part.
• This way you ensure profit and reduce risks.
6. Diversification of investments:
• Don't put all your money in one asset. Diversification protects your portfolio from large fluctuations.
• Invest in strong projects with good fundamentals.
🔑 Conclusion: How do you act wisely and decisively, not impulsively? #
1. Don't rush to sell during a decline due to panic.
2. Evaluate the reasons for the decline objectively: is it temporary or radical?
3. Set a strategy: Stop loss, buy on the dip (DCA), sell gradually.
4. Be balanced: Don't hold on to losing trades if the fundamentals lose their strength.
5. Learn patience: Trading is not always a quick profit, but patience and good analysis make for success.
