Mastering Cryptocurrency Trading: 10 Essential Rules

To succeed in cryptocurrency trading, it's crucial to follow a set of rules that can help you make informed decisions and minimize risks. Here are the 10 rules to get you started:

Risk Management Rules

- *Rule 1: Monitor Continuous Drops*: If a strong cryptocurrency drops continuously for 9 days at a high level, keep a close eye on it for potential buying opportunities.

- *Rule 2: Reduce Positions After Consecutive Gains*: If a cryptocurrency rises for two consecutive days, consider reducing your position to lock in profits.

- *Rule 6: Exit After Failure to Recover*: If a cryptocurrency fails to recover the previous day's cost the next day, exit your position promptly to limit losses.

Trend Analysis Rules

- *Rule 4: Enter After Bull Run Ends*: Always enter the market after a previous bull run ends, as this can be a good time to buy into emerging trends.

- *Rule 9: Trade with the Trend*: Only choose cryptocurrencies that are in an upward trend for trading, maximizing gains and minimizing losses. Use moving averages to gauge short-term and long-term trends ¹ ²:

- 3-day moving average for short-term rise

- 30-day moving average for medium-term rise

- 80-day moving average for main upward trend

- 120-day moving average for long-term rise

Market Analysis Rules

- *Rule 3: Watch for Pullbacks*: If a cryptocurrency rises more than 7%, consider the opportunity for a pullback the next day and continue to observe.

- *Rule 7: Identify Patterns*: On the gainers list, if there are three consecutive gainers, there may be five or seven. For cryptocurrencies that rise for two consecutive days, consider entering at a dip, as the fifth day is usually a good selling point.

- *Rule 8: Monitor Volume and Price*: Trading volume is crucial; pay attention to breakouts at low levels during consolidation and stagnant price movements with increased volume at high levels.

Strategy Execution Rules

- *Rule 5: Observe Low Volatility*: If a cryptocurrency has three consecutive days of low volatility, observe for another three days; if there's no change, consider changing your holdings.

- *Rule 10: Maintain a Rational Mindset*: Small capital doesn't mean no opportunities. Grasp the correct methods, maintain a rational mindset, and strictly execute strategies while waiting for opportunities to arise. Avoid trading cryptocurrencies full-time and never trade on borrowed funds