The three types of people who are most likely to lose money in the cryptocurrency circle; how to avoid these mistakes and keep your wealth;
1. People who do not stop loss when they are heavily invested in spot trading:
This approach is extremely risky. Once the market fluctuates unfavorably, it may lead to huge losses. For example, in the market crash in May 2021, many investors suffered heavy losses because they did not set stop losses.
2. People who like to do high-leverage Solitaire with heavy contracts:
High leverage can magnify returns, but it also magnifies risks. Many investors have their positions blown up in a short period of time due to short-term market fluctuations. For example, in the violent market fluctuations caused by certain emergencies, the risks of high leverage are particularly prominent.
3. People who do not stop profits in time when they make money and like to carry orders all the time when they lose money:
This mentality is very dangerous. Missing the opportunity to stop profit and being unwilling to stop loss when losing money will only make the losses bigger and bigger. For example, in the investment of some altcoins, many people missed the best time to stop profit because of greed and eventually suffered heavy losses.
How to avoid these mistakes:
1. Reasonable position management:
Position management is the first rule of trading. Don't put all your funds in one currency. Diversified investment can reduce risks. At the same time, use only a part of the funds for each transaction to avoid full-position operation.
2. Set stop loss and stop profit:
Set stop loss and stop profit points before each transaction. This way, you can stop loss in time and protect the principal when the market fluctuates unfavorably. At the same time, stop profit in time when the expected return is reached to lock in profits.
3. Use leverage reasonably:
Be cautious when using leverage, and don't blindly pursue high leverage. Reasonable leverage multiples can increase returns while controlling risks.
4. Maintain a good attitude:
Investment is a long-term process. Don't be anxious because of temporary losses, and don't be blindly optimistic because of short-term gains. Stay calm, don't blindly follow market sentiment, and make rational decisions.
There are gains and losses in currency circle transactions. We should look at whether the long-term overall profit is profitable, not one or two short-term orders. Only by managing positions and risks, staying calm and rational can we survive and make profits in this volatile market.
I hope these suggestions are helpful to you! If you have more questions or need further discussion, please feel free to communicate.