Three Key Points for Spot Trading: The Core Principle of Minimizing Losses and Maximizing Gains

In the cryptocurrency world, spot trading seems simple, but if you don't understand the core logic, you can easily fall into the trap of being stuck with losses. The following three points are basic principles that must be remembered when making spot investments, which can help you avoid significant losses and increase your profit opportunities:

1. Do not blindly increase positions, control your holdings

• Observe the trend after being stuck: If the price trend is downward, absolutely do not casually increase your position. You should first reduce your holdings or directly withdraw to observe, to prevent a significant drop with heavy holdings.

• A significant drop with heavy holdings is a taboo: Averaging down in a falling market often leads to deep entrapment of your capital, losing flexibility for future operations. Stay clear-headed, control your holdings, and avoid falling into a cycle of losses.

2. Hold onto strong coins, stay away from weak coins

• Identify strong coins: Among your selected coins, those that have smaller declines than others but larger increases are considered strong coins. These coins are typically “star projects” in the market.

• Decisive reallocation: Convert weak coins into strong coins, concentrating your funds on truly promising cryptocurrencies. In a bull market, the performance of strong coins can bring unexpected returns.

3. Identify risk signals, timely switch coins

• Be cautious of worsening patterns: If a coin continues to create new lows or fails to rise or even declines when Bitcoin is rising, it's likely that the major holders have sold off.

• Decisively switch coins: Don’t hold onto a losing position due to unrealized losses; immediately switch to a more promising coin to reduce opportunity costs.

Summary:

The core of spot investment lies in adhering to discipline: do not blindly increase positions, seize strong coins, and timely cut losses and switch coins. While it cannot guarantee profits, it can significantly reduce the risk of losses and increase the probability of profits. In the cryptocurrency world, minimizing losses is a form of profit!

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