In the cryptocurrency market, significant news often accompanies major market movements. Cryptocurrency trading is not gambling; it requires clear thinking. As a surfer, I summarize five key trading techniques for cryptocurrency investing, hoping to help everyone.
First Tip: Understand the Trend
Following the trend is the winning formula for any investment and financial management, so the first tip is 'Understand the Trend'. The trend is a medium to long-term concept that represents the direction of price changes over an extended period, including upward, downward, and consolidating directions. Therefore, once the trend is identified, using the traditional method of 'buy low, sell high' is very prudent. If you want to 'chase rising prices and kill falling prices' against the market, you must focus primarily on short-term operations.
Second Tip: Wait for the Buying Point
'Waiting for the Buying Point' is the second tip that must be mastered. Investors can use various methods such as the Fibonacci retracement method or trendline buying method to achieve this. There is no distinction between better or worse methods; it only depends on whether they suit the investor's operations.
Third Tip: Find Your Target
'Finding a Target' is the third tip. Investors can also use the Fibonacci retracement method to achieve this. A target is merely a target; it may not be reached or may be exceeded. Sticking rigidly to a target is not advisable. The key lies in the choice after achieving the target: to close the position or to hold it? This depends on the 'momentum'.
Fourth Tip: Take Profit and Stop Loss
The fourth tip, 'Take Profit' and 'Stop Loss', are actually two tips, but they are inseparable and complementary, thus can be regarded as one. Developing strategies for taking profit and stopping losses is crucial for investors. 'Why take profit?' Although this may be difficult for investors with a strong speculative mentality, in a one-way trend, it is the only means to maximize your profits. If you do not use take profit methods and the market suddenly changes, you will incur high costs and may even lose a significant market opportunity. The take profit price must be adjusted upwards or downwards continuously with price fluctuations. In an uptrend, use the previous day's closing price as a reference. In a consolidating market, use take profit sparingly and actively close positions.
Stopping losses at the first moment is a test for investors. When the price drops to the set stop loss point, it is important to stop losses in a timely manner. What support level should the stop loss be set at? What is an appropriate stop loss amount? It is best to set stop losses in conjunction with your feelings and understanding of the market. In medium to long-term trading, stop losses are not measured by how many points are appropriate but by the importance of the support level as a reference.
Fifth Tip: Avoid 'Greed' and 'Fear'
Prices are constantly changing, and investors cannot predict future price movements in advance; they can only make predictions based on historical data and certain methods. However, no matter how rigorous the analysis and predictions are, mistakes are possible. Therefore, it is essential to establish the correct mindset and maintain a good attitude. Avoid 'greed': protect your profits; avoid 'fear': dare to win.
The primary principle of investment is to avoid risks. If risks cannot be avoided, no matter how much money you earn, it will eventually be returned. Every person's success has its methods, and investment trading must also have its principles. Accumulating small amounts to achieve more and taking small risks for big rewards is fundamental to trading. However, many people forget their original intentions, focusing on immediate benefits while overlooking risks, unaware of how vulnerable and insignificant individuals are in the market. If one does not understand how to avoid risks, it is like a small boat sailing in the ocean, easily capsized by winds and waves.
I am Ah Yue, focusing on analysis and teaching, a mentor and friend on your investment journey! I hope that everyone investing in the market will have smooth sailing. As an analyst, the most basic thing is to help everyone make money. I will help you resolve confusion, manage positions, and provide operational advice, speaking with strength. When you lose direction and do not know what to do, look to Ah Yue (homepage) for guidance.
