True wealth is created during consolidation phases, just like now.
But no one explains how to profit from it; everyone just says to buy on dips, and no one shares specific methods. This tweet will become your manual, helping you maximize the market's decline.
We are currently in a consolidation phase; our primary goal is survival. Those who achieve this will stand out in this bull market.
The key is to actively buy on dips and correctly position yourself. Here is my ultimate manual that teaches you how to do this.
1. Do not engage in high-risk operations
During such consolidation periods, taking on significant risks can lead to severe losses in your portfolio. Therefore, limit high-risk operations to within 3% of your portfolio; it's best to focus on low/medium risk operations.
2. Stablecoins
Put 30% to 60% of your portfolio in stablecoins, which help reduce volatility, and additionally allow you to buy on dips at the right time.
3. No funds to buy on dips, find a Web3 job
If you don't have funds to build a position, find a Web3 job. These periods usually last 4-6 months and give you enough time to build a minimum portfolio, especially now when there are many job opportunities.
4. Enhance your skills during boring market times
This is the difference between winners and losers. Those who research and actively learn new things during boring market times will stand out in this cycle.
Here are some skills:
Programming
Video editing
Copywriting
About how to buy on dips
This means buying at the lowest price, but there is a question: how to predict the lowest price?
The answer is simple: no one can predict. But we can get as close to the lowest price as possible through strategies.
To get as close to buying on dips as possible, you need to know the answers to the following three questions:
· When do you need to buy?
What needs to be bought?
- How to buy? Let's dive deeper.
When do you need to buy?
The typical pattern of all bull markets is: halving -> 18 months -> All-Time High (ATH). We can divide the entire cycle into:
. Phase 1 - Buy
· Phase 2 - Fixing
Here is a rough chart that includes these phases:
Buy and fix
- Phase 1 - Downward buying season, usually lasting 14 months, and our task is to accumulate positions.
· Phase 2 - The market is nearing its peak, and we begin to lock in profits.
What needs to be bought?
To maximize profits, we need to find undervalued altcoins.
But also remember the risks:
High market cap = low risk
Low to medium market cap = high risk
Based on your risk management and portfolio choices.
Undervalued altcoins are often in the price discovery phase; they can be assets with either high or low market caps.
You can also increase positions in SBTC/$ETH to reduce portfolio volatility.
How to buy?
Buying on dips is a complex process. We cannot invest all our money into a token at once, as this may not actually be the lowest point (the price may continue to drop). This is precisely why we will use the cost averaging strategy to buy.
Let me explain.
The cost averaging strategy simply means buying in batches to keep the average purchase price as low as possible.
For example: $1,000 portfolio
First buy - $100
Second buy - $200
Third buy - $300
Fourth buy - $400
You can freely adjust these numbers according to your situation.
But when should you buy?
The simplest method is to buy every time $BTC drops by 5-7%. Remember that altcoins may drop by 10-15% at this time.
Again, you can freely adjust the percentages according to your strategy.
Summary
Check if it's the right time to buy on dips, and also check if altcoins are still undervalued, then use the cost averaging strategy:
BTC -5% = Buy $100
BTC -5% = Buy $200
BTC -5% = Buy $300
BTC -5% = Buy $400
This method is essentially buying on dips.
There is nothing wrong with speculation, but bad speculation is a disaster.
Whether you can accurately grasp the market ups and downs and create long-term wealth is not a question of talent; fundamentally, it is an essential ability to work in the speculation industry.
Making one or two successful trades does not mean a successful career; anyone can do it at any time; this is not an industry where one becomes wealthy by luck. The goal of speculation is to continuously do the right thing, not to take shortcuts, not to feel discouraged by recent losses, and not to get carried away after winning two trades in a row. My interest in the art of trading far exceeds my interest in the last one or two trades. Everyone can drive in a nail or two on the board, but that does not mean they can build a house. To build a good house, one needs not only skills and plans but also confidence in executing the plans and the ability to work every day, regardless of the weather.
What is speculation
Speculation is the art of identifying potential future trends. It is difficult to accurately predict or foresee what will happen in the future or how it will happen. However, all investment predictions involve three elements:
Prediction involves choice, timing, and management. Mastering only one of these is not enough; you must thoroughly understand and familiarize yourself with all three elements. Therefore, let us study these elements one by one.
Choosing has two aspects: one is to select markets that are about to start fluctuating; the other is to choose markets where you can focus your attention. Don't expect that just because you trade in one market, your favorite market will surge, filling your pockets. You can discover an astonishing secret by studying stock or commodity futures charts, a secret that distinguishes you and me from potential speculators. This secret tells us that prices tend to fluctuate within a certain range and usually lean towards one side, thus vaguely presenting a trend. Throughout the year, there are only 3 or 4 opportunities when prices suddenly change significantly, and you can take advantage of these opportunities to profit. If you try to look at the charts, you will see and understand that significant price changes do not occur every day. In fact, the likelihood of significant price changes is greater than that of minor changes... Big changes are exceptions, not the norm.
This is why choice is important. Would you rather be stuck in a volatile, directionless swamp? It will exhaust you or completely knock you out. But in either case, you lose—either money or time. Therefore, it is crucial to understand when the market conditions for price surges are ripe.
Considerations about market conditions include monthly trading days, weekly trading days, holidays, and internal market correlations, etc. Additionally, there are factors such as the net long and short positions of the highest volume (and smartest) traders, mistakes that the general investment public cannot avoid, and even major news that affects the market. Successful speculators know how to be patient, while the average person cannot hold back; they would rather jump in and gamble as quickly as possible. At this time, the skilled speculator will patiently wait, knowing that only when the key finds the right lock will it function, meaning only then will there be profit.
The reason choice is important for profits is another reason. When I only trade in one or two markets, I always achieve the best performance. Excluding all other distracting markets allows me to focus on the operations of the markets I choose, what factors affect them, or more importantly, which factors do not affect them. Without investing skills, passion, and action into your career, you will not achieve significant accomplishments, and this industry is no exception. The more focused you are on your work, the more successful you will become.
This concept aligns very well with the state of the industry. Enthusiastic experts can earn more than average participants. In today's complex situation, specialization can yield great returns. Many years ago, I heard about a smart person who made several million dollars in the stock market. He lived in the mountains of Northern California and only called his broker about three times a year, only buying or selling the same stock. His broker told me that this guy really only relied on this one stock and made a fortune through concentrated investments.
Timing selection
If you focus on specific commodity futures, and your new tools, techniques, and dreams tell you that a marketable volatility is about to occur, this is not the time to rush in.
Choice is about things that are about to change; timing, on the other hand, is the second element of speculation, concerning when a real change will happen.
Choosing timing is when the price just begins to change, narrowing the range down to more specific points in time. At this time, simple trend lines, price breakout levels, and patterns can be used as tools. The importance of timing selection lies in having the market prove itself and prepare for explosive movements in the direction you have chosen. What does this mean? In the case of planning to go long, I can say: 'A price drop does not necessarily mean an explosive upward movement is coming.'
On the contrary, price declines may lead to another wave of downturn. This is the simple principle of Newton's law of motion. Traders are always in conflict; we want to buy, and according to traditional logic, we should buy at the lowest price possible, but trend experts say not to buy things that are falling! My advice is to wait until explosive moves begin before buying. Even in this case, you may not buy at the lowest price, but that's much better than being stuck at a new low.
Control trading:
The third level of speculation relates to how you manage trades and the capital you invest. Traditional theory tells us not to engage in trades you can't afford to lose. Perhaps.
But think about it; if your mindset is: what if these are toy stocks, I guarantee you will play, and you may lose. If this is real money, money you can't afford to lose, you might be more cautious, and the chance of winning is the same. Demand is not only the mother of invention but also the mother of speculation management.
Trade management is more important than financial management because it relates to how long you want to stay in the trading arena and how much you want to earn. It is closely related to your emotions, meaning you should not get carried away, overtrade, or trade too small. It represents doing the right things during trading and controlling your emotions.
Knowing how to trade does not equal knowing how to win money.
The art of trading combines selection, entry techniques, and money management, all of which are fundamental principles that need to be adhered to.
But super traders understand better that only through management, i.e., controlling or utilizing these skills, can you maximize your profits.
Investors in the crypto space, whether novices or experts, gain not only financial returns but also growth in investment knowledge and experience.
Stay tuned: $BTC $ETH #现货与合约策略 #币安Alpha上新
