The following ten core trading rules will guide you in the market:
Capture opportunities for strong cryptocurrencies' pullbacks: When strong cryptocurrencies in the market experience a continuous decline for nine days at high levels, this often serves as a signal worth noting. Such a continuous drop may be the result of short-term market adjustments, and strong cryptocurrencies usually have rebound potential, making it worthwhile to consider following up at this time.
Control short-term rising risks: If a cryptocurrency shows an upward trend for two consecutive days, it is recommended to moderately reduce the holding proportion. Short-term rapid increases may accumulate significant profit-taking, and timely reducing positions helps lock in profits and avoid potential pullback risks.
Focus on pullback opportunities after excessive gains: When a cryptocurrency's increase exceeds 7%, it is important to closely monitor the possibility of a price pullback the following day. At this time, it is advisable not to rush into action, but to maintain observation and make decisions once the market trend becomes clearer.
Seize the entry opportunity after a bull market: A wise approach is to enter the market only after the previous bull market has completely ended. The end of a bull market often presents significant bubbles, and the post-bull market environment is more conducive to finding undervalued investment targets, thereby reducing the risks of buying at high levels.
Respond to low volatility markets: If a cryptocurrency maintains a low volatility state for three consecutive days, it can be observed for an additional three days. If volatility remains unchanged, it indicates that the cryptocurrency may lack vitality in the short term, and it may be time to adjust positions towards more promising assets.
Timely stop-loss: If a cryptocurrency does not rise to the previous day's cost price the next day, it indicates that the market trend may have turned unfavorable, and one should decisively exit to prevent further losses.
Grasp the rhythm of sector rotation: In a rising market, the cryptocurrency sector often exhibits a correlated effect. If three cryptocurrencies start to rise, it often leads to more cryptocurrencies following suit. For cryptocurrencies that have risen for two consecutive days, one may choose to enter when their prices pull back, typically the fifth day may be a good selling opportunity, but it is essential to flexibly assess the overall market situation.
Value trading volume and price indicators: Trading volume is a core element of the cryptocurrency market, reflecting market activity and capital flow. When prices break out of a consolidation range at low levels, it is crucial to pay attention to the accompanying trading volume; conversely, when prices are high and trading volume expands but prices stagnate, it signals a potential market peak, and one should decisively exit.
Select rising trend cryptocurrencies: To improve the success rate of investments, prioritize cryptocurrencies in an upward trend. A rising 3-day moving average represents a positive short-term trend, a rising 30-day moving average indicates an optimistic mid-term trend, a rising 80-day moving average signifies the formation of a major upward trend, and a rising 120-day moving average shows a long-term upward trend. Following these trend indicators helps capture the main upward market movements.
Invest rationally and progress steadily: Even with limited funds, there are still profit opportunities in the cryptocurrency market. The key lies in mastering scientific trading methods, maintaining a calm and rational investment mindset, strictly executing trading strategies, and patiently waiting for the right entry moment. Additionally, it is important to remember not to treat cryptocurrency trading as a full-time job and never to use borrowed funds for trading to avoid unbearable losses due to market fluctuations.