5 Laws of Trading in the Cryptocurrency Market
1. Rapid price increase and slow decrease indicate accumulation. A rapid rise followed by a slow fall indicates that the market makers are accumulating positions in preparation for the next round of price increase.
2. Rapid price decrease and slow increase indicate distribution. A rapid decline followed by a slow rise suggests that the market makers are gradually selling off, signaling that the market is about to enter a downtrend.
3. Don’t sell when there is high volume at the top; run when there is no volume at the top. High trading volume at the top may indicate further price increases; however, if volume at the top shrinks, it suggests a lack of upward momentum, and one should exit the market quickly.
4. Don’t buy when there is high volume at the bottom; you can buy when there is sustained volume. Volume at the bottom may indicate a continuation of the downtrend and requires observation; sustained volume indicates continuous inflow of capital, making it a potential buying opportunity.
5. Trading in cryptocurrencies is about trading emotions; consensus is reflected in trading volume. Market sentiment determines price fluctuations, and trading volume reflects market consensus and investor behavior!
In fact, many people understand these concepts, but they cannot control their impulses or manage their mindset, ultimately leading to significant losses! Risk management is a discipline! Listen to advice, eat well! Wisdom equals being able to follow trends; if the market doesn’t look good, it’s okay to stay out!
