A summary from years of experience in the cryptocurrency space.
True experts are not necessarily those with exceptional technical skills, but rather those with profound insights into market rules and strict adherence to them.
Rising does not mean the top, falling does not mean the bottom.
Market trends often exceed most people's imagination. Take Bitcoin for example; many people did not believe it could reach a high of 150,000 USD while its price gradually climbed. They were limited by their inherent perceptions, thinking the price had risen to an absurd level and could not go higher. But they overlooked the crazy power of the market; once a bull market arrives, the space for price increases is unimaginable.
Similarly, during the decline process, people often misjudge. When Bitcoin was at 68,000 USD, many investors thought this was the bottom and prepared to buy in, but the market ruthlessly continued to dive. When it fell to 62,000 USD, it had already caused panic among these investors.
Even more unexpectedly, the price has also experienced a spike, reaching 56,000 USD directly. This situation caused significant losses for investors who blindly guessed the bottom. It's like a person groping in the dark, thinking they've found a safe foothold, only to discover that they are standing on a deeper abyss. This tells us not to guess the market's top and bottom based on subjective assumptions, as market changes are endless and will not operate according to our expectations.
Each transaction should preferably not exceed 5%.
In cryptocurrency investment, capital management is crucial. Especially for investors with small amounts of capital, they often feel they need to bet everything to achieve high returns, but this approach often backfires. True experts often build positions in batches at a ratio of 5 percent.
For example, an investor with 1 million in capital only invests 50,000 each time they build a position. The benefits of this approach are obvious. First, it greatly increases the opportunities for trial and error. If the market trend goes against expectations after the first position is built, their loss is only 5% of the total capital, leaving enough funds for subsequent operations.
If a large amount of capital is invested all at once, a wrong judgment could lead to severe losses or even complete loss of capital. Secondly, this method of building positions in batches allows for continuous optimization of costs. With market price fluctuations, subsequent positions may be built at lower prices, thereby lowering the overall cost. It's like building with blocks, constructing a stable investment portfolio piece by piece.
Fear of heights is the mark of a miserable person.
In the crypto space, there is always a main force operating behind each cryptocurrency. The main players invest extremely high costs to promote the development of a cryptocurrency. From initial advertising costs to acquiring chips and developing related technologies and applications, the cumulative cost is a huge number. This is not a simple 20%-50% cost ratio; it could be several times or even dozens of times more than we imagine.
For example, some emerging cryptocurrencies need to conduct large-scale advertising and promotion globally to stand out in a fiercely competitive market. The advertising costs, salaries of marketing personnel, etc., are all significant expenses.
At the same time, to gain enough chips to control price trends, the main players may need to buy large amounts in the market, which further increases costs. Therefore, when we see a cryptocurrency's price continuously rising, we shouldn't shy away just because the price is high. Behind this price, there is solid value support, and the main players need higher prices to realize profits, which provides us investors with opportunities to follow and profit.
A bull market is the only opportunity for a turnaround.
Legendary investor Buffett's investment strategy is largely based on long-term value investing and relies on the relatively stable market environment of the US stock market. However, even investment masters like Buffett must face losses if they encounter a bear market. He chooses to steadfastly remain in the US stock market and stay in Omaha because the market environment there suits his investment style. In the crypto space, the situation is even more complex and extreme.
In a bear market, nearly all cryptocurrencies are falling, market sentiment is extremely pessimistic, and investors find it difficult to profit. The bull market is completely different; in a bull market, a large amount of capital floods into the market, and prices of various cryptocurrencies soar. Like the tide, the strength of a bull market can lift all boats. At this time, as long as investors choose relatively high-quality cryptocurrencies, there is a great opportunity for significant asset appreciation. Therefore, for cryptocurrency investors, seizing the opportunity of a bull market is key to turning things around.
The lagging nature of technical indicators.
Technical indicators are tools that many investors rely on in cryptocurrency investment, but we must clearly recognize their limitations. Technical indicators are often calculated and generated based on historical data, which leads to their lagging nature. For example, when the cryptocurrency price is strongly rising, we will find that some commonly used technical indicators, such as MACD+, also begin to show positive trends.
But at this point, the price has actually risen very high. Many investors see the positive trend in technical indicators and blindly chase the rise, often getting stuck at high levels. Take the MACD indicator for example: there are often golden crosses on the same day, and investors are excited, thinking that an upward trend is coming, only for the next day to turn into a dead cross, and the market trend plummets. This situation is common, indicating that we cannot solely rely on technical indicators as the main basis for buying and selling; instead, we should use them as a reference and combine them with analyses of market fundamentals, capital flow, and other factors to make more reasonable investment decisions.
Firmly believe that you will ultimately overcome the market.
In this challenging field of cryptocurrency, confidence is key to success. Every successful big player in the crypto space has full confidence. Their investment processes have not always been smooth, and they have all experienced losses. However, they have never been defeated by these setbacks.
They believe in their judgment, trust their understanding of the market, and always adhere to their investment strategies. Like travelers moving in the dark, they have a bright light in their hearts, which is their confidence in themselves.
If an investor does not believe that they can make money in the crypto space, they will easily waver when facing market fluctuations and various complex situations, leading to incorrect decisions. This confidence is not blind arrogance, but is built on a deep understanding of market rules, continuous improvement of their investment strategies, and summarizing past experiences.
Using just one strategy: the volume trading strategy - EMV indicator, I would like to share my recent experiences and insights. At the end of last year, I entered the market with 200,000, and at that time, I was just trying it out. I didn't blindly follow the trend but deeply studied the EMV indicator. When the price was at the market top, I noticed a very obvious phenomenon: whenever there was a large trading volume, the EMV value would change.
Will react in advance. It starts to decline and gradually approaches the 0 axis.
This process is like the calm before a storm; the market may still be lively and trading on the surface, but in reality, danger is quietly approaching. When the EMV value changes from positive to negative, it is a clear signal that the market is about to reverse and enter a downward trend. Based on this signal, I decisively sold the cryptocurrencies I held. It was precisely through the accurate application of this indicator that my assets grew like a snowball.
In repeated buying and selling operations, I continually accumulated profits. Now, my assets have reached 40 million, easily achieving a hundredfold profit. This deeply makes me realize how important it is to master an effective analysis method in the crypto space.
It is like a key that opens the door to wealth, allowing me to find my own successful path in this market full of opportunities and risks.
After years of navigating the market, having a deep understanding of opportunities and pitfalls, if your investments are not going well and you feel dissatisfied with losses, leave a '999' in the comment section!
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