Why do we say that in trading cryptocurrencies, those who can buy are apprentices?
Those who can sell are masters, and those who can stay in cash are the ancestors.
Based on my extensive experience in the cryptocurrency space over the past few years
Here are some buying and selling strategies I have summarized:
Firstly, those who can buy are apprentices.
The best trading strategy in the cryptocurrency space is:
a. Regardless of bull or bear markets, 5 layers of positions should be in BTC and ETH, while the remaining 5 layers should be for taking big risks.
b. When the bull market retraces, many altcoins drop to 10% or even 1% of their price. At this point, it is a good opportunity to buy some promising altcoins with broad consensus, and then wait for the bull market to arrive.
c. During a bull market, various hot topics emerge. For instance, in this bull market, areas like artificial intelligence, GameFi, RWA, public chains, and platform tokens can be participated in with a small amount of funds for hot speculation. Once profits exceed 5 times, take profits and convert everything into BTC and ETH, clearly distinguishing between 'living life' and 'playing around.'
The essence of finance is a Ponzi scheme. When the tide goes out, you can see who is swimming naked. It is very wise to exit before the bubbles of various new projects burst.
Secondly, those who can sell are masters.
Trading cryptocurrencies to the point of becoming a shareholder. Never think you can sell at the highest point; the highest point is only known in hindsight. Two relatively reliable selling methods are: target profit-taking and technical indicators.
Target profit-taking method:
Contentment brings happiness; money is not something you can earn indefinitely. Nothing can rise infinitely; the essence of the trading market is fluctuations, with cycles in everything. Set your profit targets or expected prices in advance. For example, if you need 1 million to buy a house this year, set a price that allows you to earn 1 million, and place your orders in advance to execute automatically once the target is reached. Alternatively, use the ATH price as a reference point, as breaking previous highs is challenging and often leads to a significant drop, so place your sell orders around 4% below the recent high.
Technical profit-taking method:
Set MACD to (12, 26, 9), and choose the 5-day and 7-day moving averages for the candlestick chart. When the 5-day moving average crosses down into the 7-day moving average to form a death cross, and the MACD's DIF line crosses down through DEA to form a death cross, it indicates that a significant drop is about to begin.
Taking ETH as an example, ETH saw significant drops on December 4, 2021, September 7, and May 13. In all three instances, this theory proved to be quite accurate.
Thirdly, those who can stay in cash are the ancestors.
In a bull market, hold onto your coins firmly; in a bear market, maintain a cash position. The highest realm of trading is to stay in cash because waiting for a significant drop, to step in during times of widespread losses can yield the greatest profits. Staying in cash is quite challenging, as you must endure prolonged periods of tedious waiting and the FOMO mindset while others continue to make money. Based on ETH's volatility, the opportunity for a 20% drop can be grasped well 4-5 times a year.
