Some people become rich overnight and achieve financial freedom, while others lose everything and leave in despair. If you are a newcomer with limited capital who desires to get a share in this blue ocean, don't rush! The following six survival rules are practical experiences gained from countless struggles. Mastering them can not only reduce your risk of loss but also help you earn 10%-30% more in trading.
1. In a sea of weak water, only take a ladle to drink. The cryptocurrency market is like a vast sea of stars, with so many types of virtual currencies that it can be dazzling. Dozens or even hundreds of currencies flicker on trading platforms. However, for small investors with limited funds and energy, blindly chasing every currency is like trying to catch all the raindrops with bare hands during a downpour, ultimately resulting in futility. It is recommended that newcomers focus on 1-2 mainstream currencies, at most 3. For example, Bitcoin and Ethereum, which have strong liquidity and high market recognition, are like 'top students' in the investment world and are more suitable as entry-level research subjects. Focusing on a few currencies allows you to understand their characteristics and trends more deeply, giving you clarity in trading.
2. In the midst of storms, stay steady and don't wave. When the market suddenly surges and the price curve rises like a rocket, many people become excited, filled with fantasies of 'financial freedom,' and can't wait to go all in; when the market crashes and the price plummets like a waterfall, fear takes over, and they choose to cut losses in a panic. This kind of operation influenced by market emotions is often the beginning of losses. Imagine you are navigating a small boat through a storm; the wisest move is not to blindly change direction but to grip the helm tightly and wait for the storm to subside. In the cryptocurrency world, when prices fluctuate sharply, consider pressing the pause button to calm yourself down and wait for the market to return to rationality before making decisions.
3. Keep the green mountains, and you won't worry about firewood. The biggest taboo in trading cryptocurrencies is 'all-in,' putting all your funds into the market, like putting all your eggs in one basket. Once the basket is overturned, all efforts will turn to vapor. The correct approach is to retain 30%-50% of your funds as a 'safety cushion.' When the market falls, these reserve funds can be used to average down and reduce holding costs; when the market rises, you can also add to your investment and expand your profits. Having food in hand keeps you calm, and reasonable fund allocation can help you maintain a stable mindset in the face of market fluctuations, avoiding wrong decisions caused by excessive anxiety.
4. Take profit when it's good, and stop loss in time. Greed and fear are the biggest enemies on the path of trading cryptocurrencies. Many people, when in profit, always think of 'a little more, earning another sum,' only to see the market suddenly turn, resulting in not only a retraction of profits but also a loss of principal; when in loss, they hold onto hope, fantasizing about a price rebound, unwilling to stop loss for too long, ultimately sinking deeper. To overcome human weaknesses, it is essential to set clear goals before trading. For instance, decisively take profits when gains reach 20%; if losses reach 10%, stop loss and leave promptly. Most trading platforms now support automated trading settings, allowing you to set prices in advance and let the system execute trades, avoiding impulsive and panicked decisions at the moment.
5. To forge iron, one must be strong oneself. Investors in the cryptocurrency market come from various industries, and many are not from financial backgrounds, but this does not hinder us from improving our investment abilities through learning. Instead of blindly believing various 'insider news' and 'expert recommendations' online, it is better to spend some time learning basic technical analysis knowledge, such as understanding candlestick charts and moving average indicators. These technical tools are like compasses when sailing, helping you judge market trends and identify buy and sell signals. Mastering these skills will give you more confidence in trading, allowing you to make decisions based on your judgment rather than following the crowd blindly.
6. Step by step, seek victory steadily. Whether buying or selling, do not complete all operations at once. Suppose you plan to invest in 10 bitcoins; it is advisable to divide this fund into 5 investments, either executing them in one hour or spreading them over several days. The benefit of this approach is that it can effectively reduce the risk brought by short-term price fluctuations, avoiding a total loss due to impulsive decisions. Investing is like building a house; it requires laying one brick and tile at a time, and only with a steady approach can you go further. In this high-risk and high-reward cryptocurrency market, emotions are often the key factors that determine investment success or failure. Maintain rationality, arm your mind with knowledge, and strictly adhere to trading rules to tread steadily in this tempting and challenging field, achieving profit goals. Remember, investing is a marathon, not a sprint; those who understand how to control risks and maintain patience will always be the ones who smile in the end.
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