If you truly plan to stay in the cryptocurrency market for the next three years and aspire to make it your primary career, please remember the following 10 operational insights; after reading them, you will thank me!
1. Short-term cryptocurrency trading. This is the most common way to trade contracts and the first approach for newcomers entering the cryptocurrency market. This method carries significant risk and often relies on luck to achieve profits; the gains are usually not enough to cover a single loss.
2. Learn to take profits and cut losses. In contract trading, taking profits and cutting losses are very important. The market is highly volatile, and prices can change quickly. Setting stop-loss orders can help you close positions in unfavorable market conditions to prevent significant losses. A good profit-taking strategy can help you secure better profits and prevent losses from market reversals, while also allowing you to control your profit points.
3. Trade with discipline. In contract trading, one is often influenced by greed, fear, and emotions, which are the primary factors leading to losses. Before entering a trade, set your stop-loss and profit-taking points, maintain a good trading rhythm, and reduce the emotional interference in your decision-making. Establish a trading plan, including the number of trades per day. Do not think about entering another trade to recover losses after a loss; it often results in even greater losses along the way.
4. Analyze the market. The cryptocurrency market can experience either one-sided trends or fluctuating trends. Fluctuating markets are most common during weekends, and long-term investments are not suitable in these conditions. If you have a profit, take it and secure your gains. One-sided trends will only occur for a limited time and are the easiest to trade. Buy on dips and sell on highs to achieve higher profits.
5. Analyze the trend. If you can accurately judge the trend, you have already won half the battle. You can use daily and weekly candlestick charts to determine if the market is trending up or down. If you chase highs and sell lows, it will lead to losses and a miserable exit.
6. Position management and leverage techniques. Position management is crucial in contract trading. For example, if your account has 1000, a margin rate of 5%-10% for a trade is good, which means 50-100. This way, you won't easily face liquidation. The size of leverage should be determined based on market conditions. Quick entries and exits with high leverage yield fast returns and high capital utilization. It is best to take profits when the profit rate is between 20%-50%. Markets change rapidly, so learn to control your greed and know when to stop; greedy individuals often end up with poor outcomes.
There is a saying I strongly agree with: the boundary of knowledge determines the boundary of wealth; a person can only earn wealth within their knowledge boundary.
Maintain a good mindset when trading cryptocurrencies. Do not let your blood pressure spike during significant drops, and do not become overjoyed during significant rises; securing profits is crucial.
For those with limited resources, being grounded is an unbreakable way to survive. Good luck!
