In this journey, I have distilled 10 golden rules, concise yet precious.
If you intend to cultivate in the cryptocurrency world for a long time, this article will surely benefit you greatly, and you may feel enlightened after reading it!
1. The way to trade cryptocurrencies lies in selecting strong coins and closely following the upward trend. For coins in a downward trend, we choose to ignore them because time is precious, and it is not advisable to engage with strong players. If a coin remains above the trend line, the best strategy is to hold patiently; for instance, during the AI boom at the beginning of the year, as long as it does not break the 30-day moving average, hold steadily. Once it breaks below, exit decisively.
2. The main trend is the framework; when the market is good, there must be a leading trend. If the main trend is weak or absent, it indicates that the risks outweigh the opportunities. At this time, it is wise to observe the changes and wait for the main trend to emerge; do not act recklessly.
3. Diversify investments, and the same goes for cryptocurrency trading. Even if you have great confidence in a certain coin, do not invest all your funds in it. Learn to diversify your holdings; the number of different coins should not exceed four to spread the risk.
4. Frequent trading is not only unhelpful but can also lead to financial loss. In cryptocurrency trading, it is crucial to avoid the urge to trade too often; a day without trading may cause restlessness. Frequent operations may bring temporary pleasure, but will ultimately lead to significant losses, with only brokers benefiting. If you do not possess the skills for short and frequent trades, do not attempt to be a market maker.
5. After a big loss, you need to rest; after a big gain, you need to be more cautious. After a significant loss, your mindset can be affected, so it is important to understand the psychology of revenge trading and avoid blindly trying to recover losses, as this is a gambler's mentality and should be avoided. After a big gain, emotions can run high, leading to a loss of caution; thus, a big gain is often followed by a big loss, so remain vigilant at all times.
6. Diversified operations, stability is key. Even if you have great confidence in a certain coin, do not buy in heavily all at once; even if subsequent events prove this to be correct, this approach should still not be taken. The world is unpredictable, and no one can foresee what will happen tomorrow.
7. Do not pay too much attention to small minute charts. Retail investors should not stare at minute charts all day long; this is not only unhelpful but can also disturb your trading mindset. Cryptocurrency trading also requires a balance of work and rest; an hour of review each day is sufficient.
8. Thoughtful consideration before trading is better than impulsive decisions during trading. In cryptocurrency operations, boldly hypothesize and carefully verify. Through post-trade reviews and pre-trade planning, clarify market hotspots and make predictions about trading. However, remember that prediction is not forecasting; blind forecasting replaces market choices with subjective opinions, which is a major taboo in trading.
9. Missing opportunities is better than incurring losses. In trading, opportunities will always come again. Rationally identify and neutralize problems, focusing on successful outcomes rather than stress.
10. Improving trading skills and keeping a trading journal is crucial. Record all relevant information and experiences related to trading; without a journal, valuable experiences will be lost, and repeating mistakes is inevitable. A trading journal is indeed a powerful tool for managing funds and risks. Understanding the issues in trading is key to solving them. Therefore, make keeping a trading journal one of your goals.
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