Newcomers who have just entered the cryptocurrency space often hesitate between contracts and spot trading, finding it hard to make a decision. However, the real investment bigwigs have long abandoned a single model and instead employ combined investment strategies. Today, we will deeply analyze how to avoid the fate of being 'scalped' and achieve stable investments in the complex and ever-changing cryptocurrency market.
Contracts: The Deadly Risks Behind High Returns
Contract trading amplifies returns through leverage mechanisms, which sounds extremely attractive at first glance, as if wealth is within reach. However, this mechanism is like dancing on the edge of a cliff, hiding enormous risks. Taking 10x leverage as an example, when the market price fluctuates by just 1% in the opposite direction, your account funds may instantly drop to zero, turning previous profits and principal into nothing, sending you back to square one overnight.
The cryptocurrency market is ever-changing, and situations of double losses are not uncommon. Once you fall into the trap of chasing highs and selling lows, it is easy to suffer dual losses amidst the market's violent fluctuations, ultimately leading to total loss. Therefore, while contract trading offers enticing returns, the risks are extremely high, and a small mistake can lead to losing everything.
Spot Trading: Potential Crises Behind Stability
Compared to contracts, spot trading has no liquidation risk and appears to be more secure. However, in reality, it also faces the significant hidden danger of asset depreciation to zero. In the cryptocurrency market, the risks of investing in altcoins are extremely high, with severe price fluctuations and 90% drops not being uncommon. Many investors enter the market with expectations of value appreciation but unconsciously find themselves in a gambling-like situation, having to passively wait for market changes after their funds are invested, completely losing control over their assets.
Scientific Combined Investment Strategies: The Winning Path of the Big Players
Professionals who truly excel in cryptocurrency investment often adopt the following scientific combined investment strategies:
- Core Asset Allocation (65%): Invest 65% of funds in mainstream spot cryptocurrencies like BTC and ETH. These cryptocurrencies have high market recognition and strong liquidity, serving as the "ballast" of the investment portfolio, effectively ensuring the stability of the asset base and reducing overall investment risk.
- Short-term Operations with Potential Altcoins (30%): Allocate 30% of funds to promising small-cap cryptocurrencies. However, it is important to note that such investments should follow the principle of quick entry and exit, with holding periods ideally controlled within 7 days, capturing profits through short-term price fluctuations and avoiding the risk of significant price drops due to long-term holding.
- Cautious Participation in Contracts (20%): The remaining 20% of funds can be used for low-leverage contract trading, but risk must be strictly controlled. Only enter the market when there is a high degree of certainty in market conditions, avoiding blindly following trends and impulsive trading.
Rules for Dealing with Bull and Bear Markets
- Bull Market Strategy: In a bull market, the overall market trend is upward, and holding mainstream spot cryptocurrencies often yields considerable returns. At this point, contract trading can serve as a supplementary means to increase additional profits, but position control is essential to avoid losing principal due to excessive risk-taking.
- Bear Market Strategy: After entering a bear market, market prices generally decline, and holding spot assets can easily lead to asset depreciation. At this point, you can promptly exchange your spot assets for stablecoins like USDT to mitigate risks; at the same time, reasonably use contract shorting mechanisms to seek profit opportunities during market downturns.
Summary of Key Investment Points
- Trading Time Selection: Be sure to avoid trading during the early morning hours. This period has low market liquidity, making it easy for malicious price spikes to occur. Investors trading at this time are highly likely to incur losses due to abnormal market fluctuations.
- Position Management: Scientific and reasonable position management is the core of cryptocurrency investment. If you cannot effectively control your positions, blindly following trends or over-investing will ultimately turn you into a "cash machine" in the market. Only by mastering scientific investment strategies and flexibly adjusting the investment portfolio according to market conditions can you emerge victorious in the fierce competition of the cryptocurrency market and achieve steady asset appreciation.