Avoid projects dominated by domestic investors
Stay away from projects primarily aimed at the Chinese community (referred to as 'domestic projects'). These are often funds that carry operational risks, and due to regulatory pressures, they may sell off assets for cash and leave for better opportunities abroad, lacking long-term visions for growth.
Do not play with new coins
New coins lack historical data and have significant volatility, making them easy to manipulate by market makers. They can skyrocket or plummet thoroughly, either rising several times or dropping tenfold, especially those listed on Binance, which are similar to those listed on the A-share market. It’s easy to get stuck at high prices after entering. Therefore, new coins should at least wait for 3-6 months of washing out before entering based on trends.
Do not short coins with a funding rate of -2%
When the funding rate reaches -2%, regardless of how much it rises, do not short. The funding rate is the fee charged by the platform for balancing long and short positions. At -2% funding, it occurs once every 4 hours, 6 times a day, totaling 24%. With 10x leverage, this means 240% of your principal. Each fee deduction makes your liquidation price precarious. During this time, the market makers will leverage the long positions to explode all shorts before dropping the price.
Only buy when consolidating sideways; do not chase during vertical rises
Buy during price consolidation or slight pullbacks; do not chase during vertical price increases. Reason: Consolidation usually indicates accumulation or a washout phase by market makers, allowing for lower buy costs and manageable risks; vertical rises often serve to lure in more buyers, making chasing at highs risky. Following the trend with low buy points has a higher win rate than chasing up.
Stay out of the market for more than six months during a bear market
Confirm that you have been out of the market for at least six months after a bear market, waiting for a clear reversal signal. There is no bottom in a bear market, and declines can exceed 80%. Entering during this time is likely to lead to being trapped or liquidated; conserving capital in cash is advisable until there are signals of a bull market.
Do not exceed 10 times your principal with full-margin trades
No matter how optimistic you are, do not use leverage exceeding 10 times your principal with a full position. Even if the market maker blows up a contract, they will target the smaller positions first, causing higher multiples of liquidation. Given the high volatility in crypto, there's no need for high leverage; give yourself some time.
Don't panic when the volume increases at the top, reduce your position
Don't rush to sell when the price rises significantly with high volume, but exit quickly during low volume consolidation or small increases. High volume indicates an influx of funds, which may still have upward potential; low volume reflects weakness in the bullish trend, making it easy to turn into a bearish one.
Do not exceed 30% total position with altcoins
Keep altcoin positions within 30% of total capital, with the main positions in mainstream coins like BTC/ETH. Altcoins have poor liquidity and are subject to manipulation by market makers, showing large gains in bull markets but much larger losses in bear markets, potentially reaching 95%.
Trading based on news is a dangerous game; follow the trend instead
Do not trade based on news from influential figures, as they can be wrong too; prioritize trends.
Token economic models with inflation rates >10% are likely to drop
Projects with unlimited issuance and massive unlocks will continually pressure the coin price, fundamentally lacking a bottom unless market makers forcibly pump it.
