Excellent traders usually learn from past experiences and establish specific trading rules to avoid making the same mistakes. Every trader has a different set of trading rules. Below are seven rules that are generally applicable to short-term cryptocurrency trading for your reference!

1. Avoid revenge trading

When a trade is closed, whether in profit or loss, it is essential to steadfastly adhere to the rules. After executing a stop-loss, try not to look at it again within 24 hours. This effectively avoids revenge trading; entering trades with a vengeful mindset can likely exacerbate losses. Some believe that one should get back up where they fell, but it is more important to calmly observe before triggering new entry conditions. Since traders need to look at charts for several hours daily, it is difficult to resist the temptation to open a position again after a stop-loss. Especially when using leverage for swing trading, it is crucial to avoid a revenge mindset!

2. Try not to engage in trading on weekends

Every weekend, the volatility of cryptocurrency prices increases, and trading volume is low. This makes it difficult to predict short-term price movements. The reason is simple: weekend buy and sell orders are typically smaller, market liquidity is lower, and whales can more easily manipulate short-term prices, making the disadvantages of retail traders more pronounced. Additionally, since the cryptocurrency market operates 24/7, the trading intensity is much higher than in the stock market, and weekends are a good time to decompress and relax; after all, life is more important than trading!

3. Maintain trading at specific times

As mentioned earlier, the cryptocurrency market operates 24/7 without rest, and even full-time traders cannot keep their eyes glued to the screen all the time. To maintain a clear mind, you can set fixed trading hours for yourself. After opening a position during trading hours, set your take-profit and stop-loss, and then you can do other things. This eliminates the impulse to constantly check your phone or study candlesticks, allowing trading to not interfere with normal life!

4. Do not get emotionally attached to an asset

If you fall in love with the asset you are trading, it can easily lead to poor decision-making. Excellent traders make money through efficiency and rules, gaining an advantage because the trading behavior of most people in the market is driven by emotions. 'Be an emotionless trading machine' can ensure decisiveness and adherence to principles in trading. Many traders incur heavy losses partly because they become emotionally attached to certain altcoins, teams, or projects. This may be acceptable for medium to long-term investors, but for short-term traders, it is a potential disaster!

5. Keep simple trading rules

Traders often combine various indicators, news, and candlestick patterns in an attempt to find the convergence point suitable for trading. There is nothing wrong with this, but be careful to avoid over-analysis, which complicates issues. In fact, when a candlestick pattern that fits your system appears on the chart, you can start trading. Meanwhile, it is especially important to set stop-losses and control positions!

6. Trade only with the correct mindset

Do not trade when you feel angry, tired, or stressed; your mindset can affect your judgment. The key to maintaining a good mindset is to have other daily activities outside of trading. Activities like working out, reading, and spending time with family and friends all help cultivate the right trading philosophy!

7. Do not overtrade

The number of trades is not directly proportional to profits. Even if the market presents multiple opportunities, try not to operate more than three trades simultaneously. The more types and quantities of positions you have, the harder it is to manage risk. If multiple trades hit stop-losses, you could incur significant losses!

The pioneer of day trading, Jesse Livermore, once wisely said, 'Money is made by sitting, not trading.' We should try to avoid trading just for the sake of trading. In fact, under certain market conditions, staying on the sidelines and waiting for the opportunity to enter can help us avoid many unnecessary risks!

What trading lacks is opportunity, and what is most precious is capital. Every trader should develop and refine a set of trading rules that suit them. After summarizing lessons from failures and successes, make wiser decisions and improve trading success rates!

Finally, if you are a short-term trader, you should only allow yourself to engage in four types of trades.

First, large profit trades; second, small profit trades; third, breakeven trades; fourth, small loss trades.

Stop-losses are counterintuitive, but they are one of the most important principles in short-term trading!

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