In the cryptocurrency space, achieving stable survival in short-term trading is not easy. The following six practical rules can be referenced:
1. Accurately grasp trend turning points
Market consolidation at high levels often contains breakout potential, while sideways movement at low levels conceals downward risks. When prices are caught in range fluctuations, avoid blind operations; instead, patiently wait for key resistance or support levels to be effectively broken, and act decisively once the trend signal is clear.
2. Avoid oscillation traps
Oscillating markets are often a 'disaster zone' for retail investors. Many traders attempt to frequently trade during consolidation phases to seek opportunities, but in fact, they fall into the market's carefully designed 'power accumulation' trap. The wisest choice at this time is to remain on the sidelines and wait for the trend direction to become clear.
3. Interpret candlestick patterns contrarily
In short-term trading, one must break conventional thinking. When the market closes with a large bearish candlestick (typical bear market candlestick), it may actually present a buying opportunity; conversely, a market with a large bullish candlestick at the end (characteristic of a bull market candlestick) is often a signal to take profits and exit. There is no need to panic in the face of bearish candles, and one should avoid greed when encountering bullish candles.
4. Stay away from the temptation of rebounds during declines
Temporary rebounds in a downtrend channel are essentially more like a 'brief flash of light' and may trigger a new round of accelerated declines. Investors must restrain their impulse to bottom-fish and should not blindly buy at high levels; instead, they should patiently wait for the trend to completely reverse.
5. Scientifically construct a position system
Adopt a pyramid-style phased position-building strategy to avoid full investment in one go. Specifically, control the initial position to about 10%. If the price drops by 5%, increase the position to 20%, and so on. This method effectively averages down the cost and reduces the risk of misjudgment.
6. Decisively lock in trend profits
Market operations follow the principle of extremes leading to reversals. When prices rise to extreme highs or fall to historical lows, they often enter a consolidation adjustment phase. It is essential to take profits promptly at high levels and avoid fighting the trend; at low levels, careful judgment is needed, and one should only engage after the trend confirms a reversal. If prices show a downward trend, one should decisively liquidate their position to avoid the risk of trend reversal.
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