Regarding on-chain trading, there are a few important principles:
Avoid using large amounts of capital.
The definition of large capital varies from person to person.
For example, if you have $100,000, participate with $10,000; if you have $1,000,000, invest $100,000 to $200,000; if you have $10,000,000, invest $1,000,000.
In short, only use funds you can afford to lose.
Because the risks of on-chain trading are relatively high, far above traditional exchanges.
Clarify your own trading strategy.
The wizard shared three trading strategies on Twitter, while others are often traps:
a) Hot Tokens
For example, recent ones like PINUT, LUCE, BAN, etc., these tokens can quickly rise to tens of millions or even over a billion in market value.
The key is to judge whether enough people recognize the narrative.
The best entry timing: if the market cap is within $10 million, it can be considered; be cautious if it exceeds $30 million.
Hot tokens generally experience an 80% decline; entering at an 80% decline has a higher chance of success, but beware of traps.
b) Blue-chip and potential tokens
Such as ACT, POPCAT, etc., these tokens do not rise based on hype but through multiple setbacks and the accumulation of community consensus.
These tokens also often drop 80%, but they have strong long-term viability.
The best entry timing is when the market cap is in the millions to tens of millions of dollars; an 80% drop is a good opportunity to increase positions.
Observe the project's community atmosphere and think about the project's feasibility.
c) Large-cap blue-chip tokens
Generally speaking, only large-cap tokens listed after being on major exchanges are worth paying attention to.
The logic is to judge the weight of funds and sectors.
For example, when Neiro reaches a market cap of $300 million, I dare to take over; ACT still has a lot of development space.
But if it hasn't been listed on a major exchange like Binance and the market cap exceeds $1 billion, participation is not recommended.
Conclusion
These principles and strategies come from the wizard's years of experience and thinking.
Everyone's standards and judgments may differ, but the most important thing is to have your own trading logic and avoid blindly following trends.
Deeply think about the logic behind each trade to better seize opportunities.
I hope these suggestions from the wizard can help you better understand the risks and opportunities of on-chain trading!
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