Bottom hunting refers to the operation strategy of buying when the market price drops to what we think is the lowest point, expecting the price to rebound soon. But how do we know when the lowest point is? This is actually difficult to determine because changes in market prices are affected by many factors, including technical analysis and fundamental analysis. Therefore, we can only increase our probability of judging the bottom based on some clues and rules, but we cannot guarantee that it is 100% correct.

Therefore, when we buy the bottom, we are actually buying our psychological bottom, which is the lowest point we expect, not necessarily the real lowest point of the market. Therefore, we have to wait until the market gives us a confirmation signal before we can buy the bottom with confidence. This signal is that at the bottom of a certain cycle (such as weekly or daily), the price no longer hits a new low, but forms a shock range. When the price breaks through the upper boundary of this range, it is the best time for us to buy the bottom. If the price falls below the previous low again, it means that our judgment is wrong and we need to stop the loss and exit in time. Otherwise, continue to hold.

But there are two issues to note here. First, the bottom of some coins is very sudden. There is no shock range, but a V-shaped reversal directly occurs. In such a situation, it is difficult for us to seize the opportunity to buy the bottom. Second, if we misjudge the level of decline, it may cause us to stop losses continuously. In order to avoid these problems, we can adopt the following strategies. The first is to choose currencies with obvious bottom shocks, and do not greedily pursue V-shaped reversal currencies. The second is to at least observe the trend at the daily or weekly level, do not blindly buy the bottom, and wait patiently for the market's verification.

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