Practical Tips: 1. Observe after high and low consolidation
When the market is in a high or low sideways consolidation phase, observing is a more cautious strategy. The appearance of a sideways market often precedes a trend change; after digesting previous fluctuations, the market will eventually choose a clear direction. At this time, acting rashly may bring unnecessary losses. Waiting for the market to clarify and then acting according to the trend is the rational approach. The predecessor repeatedly reminds, 'During sideways movements, observing is more valuable than blind trading.'
Do not cling to popular positions; adjust positions with the market
In short-term trading, popular positions are often the result of speculation. Once the hype dissipates, funds will quickly exit, and investors who remain will face a passive situation. Therefore, predecessors suggest not to linger on popular positions for too long, but to adjust flexibly and always maintain mobility. As he said, 'Short-term popular positions come quickly and leave just as fast; carelessness can lead to chasing up and down. Successful short-term trading is not about blindly following trends, but keeping a clear mind at all times, ensuring that 'from start to finish, it all ends in vain.' P16
2. A rising trend jumps high, positions must be firm
If a bullish candle with a gap up appears in an upward trend and is accompanied by increased volume, it indicates that the market has entered an accelerated upward phase. At this time, one should remain calm and hold the position firmly, as this situation often leads to a significant rise. The predecessor calls this the 'acceleration period' and emphasizes that during this phase, one needs to maintain firm beliefs and not be affected by short-term fluctuations, which is the only way to achieve substantial profits.
4. A massive bullish candle requires decisive exit
Whether the market is at a high or low, a massive bullish candle is always a signal to exit. In this case, even if you see a price limit up, you should decisively close your position, because in most cases, a correction will follow a massive bullish candle. The predecessor tells us, 'No matter how tempting the profit, knowing when to stop and decisively closing the position is key to avoiding profit reversal.' The core of this strategy is 'knowing when to enter and exit,' always preventing risks and controlling profit drawdowns.
5. Buy on bearish candles above the moving average, sell on bullish candles below the moving average
Moving averages are one of the key references for short-term trading. If the stock price is above important moving averages and a bearish candle correction occurs, it is a suitable buying signal; conversely, a bullish candle below the moving average may indicate weakness in the rise, making it suitable to sell and exit. In short-term investing, attention should generally be focused on daily moving averages or attack lines, and one should not linger too long, with holding periods ideally not exceeding one week. The predecessor reminds, 'Within three days, take action; don't linger if the opportunity is missed.' Short-term trading emphasizes speed and precision; holding for too long increases risks.
6. Don't sell on highs, don't buy on dips, stay put in sideways
In the cryptocurrency market, frequent market fluctuations make this principle a basic survival rule. If the current price is not significantly higher than the purchase price, do not sell easily; conversely, if there is no significant decline, do not rush to buy. When the market is in a sideways state, observing is a more prudent strategy. The predecessor calls this 'stability first,' as any rash trading may lead to losses. Long-term profitability relies not on frequent entries and exits, but on reasonable timing for entering and exiting.
7. Better to enter less than to enter more, act according to your ability
In the cryptocurrency market, ensuring flexibility is key. Even with a high level of confidence, it is unwise to invest a large amount of capital at once; reasonable position allocation is particularly important. The predecessor reminds us, 'Better to enter less than to be greedy,' as the market can experience unexpected fluctuations at any time. Diversifying funds can reduce risks of single investments. For each trade, a reasonable position ratio should be set, which will help avoid being caught off guard by sudden market movements.
8. Learn to interpret market news
In the cryptocurrency market, the impact of news cannot be underestimated. Market news often directly triggers significant price fluctuations, which can be a big rise or a big drop, so investors should learn to interpret market information, especially major events and policies. The predecessor suggests that novices should primarily observe when encountering major news because too much intervention may lead to unnecessary losses.
9. Master technical indicator analysis
Technical analysis plays an important role in the cryptocurrency market. Predecessors suggest that beginners should systematically learn technical indicators, create a learning plan, and master analysis tools such as moving averages, KDJ, Bollinger Bands, candlestick patterns, volume-price relationships, and capital flow. Technical analysis requires long-term accumulation and is not achieved overnight. Mastering technical analysis can help investors determine entry and exit points, reducing unregulated losses.
10. Create a trading plan to avoid frequent trading
Frequent trading not only incurs high fees but also disrupts trading psychology, leading to emotional operations. The predecessor emphasizes, 'Trading requires planning and should not be done blindly.' In this regard, frequent entries and exits often indicate greater uncertainty. An effective trading plan can help investors maintain rationality and clarity of thought.
11. Implement risk control, set stop-loss and take-profit
Before each trade, reasonable stop-loss and take-profit points must be set to keep risks within acceptable limits. When reaching the stop-loss or take-profit point, exit decisively instead of greedily pursuing profits. Given the volatile price fluctuations, the predecessor's experience tells us, 'Reasonable stop-loss and take-profit are the keys to trading success.' Even experienced investors cannot accurately predict the market, so comprehensive risk control measures are a must for every investor.
