In the ocean of digital currency investment, I have experienced ups and downs. The losses in the first two years made me reflect on my mistakes, and the profits in the next five years are the affirmation of the iron law I have summarized after struggling. The following are eight valuable experiences I have accumulated. Although there are not many words, every word is precious. If you think it makes no sense after reading it, it is my personal opinion.
1. Fund management is crucial
I always insist on diversifying my funds and investing them in five parts, investing only one-fifth each time. This strategy allows me to stay calm and control risks when facing market fluctuations. Set a stop loss point of 10 points. Even if the judgment is wrong, the single loss only accounts for 2% of the total funds, and five mistakes only lose 10%. Once the judgment is correct, the stop profit point is set at more than 10 points, and the profit potential is greatly increased.
2. Go with the trend and get twice the result with half the effort
The secret to improving the winning rate is to go with the trend. In a downward trend, each rebound may be just a short-term lure; in an upward trend, each callback may be a golden opportunity to buy. Instead of blindly buying at the bottom, it is better to buy at a low level, which makes it easier to seize the opportunity of rising.
3. Beware of the trap of skyrocketing
Whether it is mainstream currency or altcoin, the skyrocketing in the short term is often accompanied by huge risks. After all, only a few of these currencies can get out of the multi-wave main rising wave, and high-level stagnation is often accompanied by a decline. Therefore, I avoid touching these currencies that have skyrocketed in the short term to avoid falling into the trap of gambling.
4. Use MACD to grasp the entry and exit opportunities
MACD is an important tool for me to judge the entry and exit points. When the DIF line and DEA form a golden cross below the 0 axis and break through the 0 axis, I regard it as a steady buy signal; and when MACD forms a dead cross above the 0 axis and runs downward, I regard it as a signal to reduce positions.
5. Avoid covering positions when losing money
The strategy of covering positions is extremely dangerous in my opinion. Many investors continue to cover positions when they lose money, but the more they cover, the more losses they lose, and eventually they fall into a situation where they cannot extricate themselves. I always insist on adding positions when I make a profit, which can not only guarantee returns but also control risks.
6. Pay attention to trading volume
Trading volume is the soul of the digital currency market. When the price of a currency breaks through a low level with a large volume, it often means that a new upward trend is about to begin;When the volume is high and stagnant, it may be a precursor to a decline. Therefore, I always pay attention to changes in trading volume so that I can adjust my trading strategy in time.
7. Only do currencies with an upward trend
In the digital currency market, only doing currencies with an upward trend can greatly increase the chances of winning. By observing the moving averages of different periods, such as the 3-day line, the 30-day line, the 84-day line and the 120-day line, the upward trend of the currency can be judged. When these moving averages turn upward, it means that the currency is in an upward trend, and buying at this time can often obtain considerable returns.
8. Adhere to the review summary
The weekly review is an indispensable job for me. By checking whether the logic of holding the currency has changed, whether the technical trend is in line with expectations, and whether the market trend has changed, I can adjust the trading strategy in time to ensure that my investment always stays on the right track.
