Short-term trading in cryptocurrencies, you must remember these three iron rules!
First, when you make money, you need to protect your profits. For example, if you buy a cryptocurrency and it rises by more than 10%, you need to be cautious and set a rule for yourself: if the price drops back to your purchase price, sell immediately without hesitation! If you make a 20% profit, you must be even more cautious; at least ensure that you secure a 10% profit before taking action. The more you earn, the higher your baseline should be. For instance, if you make a 30% profit, then when it drops to just a 15% profit, you must sell. This way, even if you don't hit the highest point, you can still let your profits roll in.
Secondly, if you lose money, you need to cut your losses in a timely manner. For example, if you buy a cryptocurrency and end up losing 15%, don’t hesitate; cut your losses and get out. Don’t think about waiting for it to bounce back; if you’re wrong, you have to accept it and bear the loss. Remember, when you open a position, you must set a stop-loss; this is a fundamental skill in cryptocurrency trading.
Finally, buy back at the original price, and don't miss opportunities. If you sell a cryptocurrency and it drops, but you still believe in it, wait until it drops to a certain extent, then buy back the same amount of cryptocurrency. This way, your quantity remains unchanged, but you have more funds on hand. If after selling it doesn’t drop and instead rises back to your selling price, you should also buy back unconditionally, even though it may waste some fees, it’s better than missing the opportunity. This principle can be used alongside the stop-loss principle: buy back when it rises, cut losses when it falls; with more practice, you’ll find the trading points that suit you.
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