In-depth research and analysis
Market analysis: Closely monitor the overall trend of the cryptocurrency market, including the impact of macroeconomic factors and regulatory changes on the cryptocurrency market. At the same time, pay attention to the fundamentals of ETH itself, such as technical upgrades and application development progress of the Ethereum network. For example, the London hard fork upgrade of Ethereum introduced the EIP - 1559 improvement proposal, affecting the supply and demand relationship of ETH, and thus influencing its price movement.
Technical analysis: Use technical analysis tools, such as trend lines, chart patterns, and various technical indicators, to predict price movements. For example, by observing whether the ETH price forms a head and shoulders bottom on the daily chart to assess possible upward trends; using Bollinger Bands to determine the price fluctuation range and potential breakout direction.
Reasonably formulate trading strategies
Trend-following strategy: When the market shows a clear upward or downward trend, follow the trend. For example, when the ETH price continuously breaks through multiple resistance levels in a short period, and the trading volume is increasing, it can be determined as an upward trend, at which point consider buying contracts and setting reasonable stop-loss and take-profit levels.
Range trading strategy: If the market is in a consolidation phase, buy and sell near the upper and lower bounds of the range. Buy when the price approaches the lower bound and sell when it approaches the upper bound, taking advantage of fluctuations within the range.
Strict capital management
Control position size: Avoid excessive leverage and heavy positions to prevent significant losses due to sudden adverse market fluctuations.
Setting stop-loss and take-profit: Based on your risk tolerance and market conditions, set reasonable stop-loss and take-profit levels. The stop-loss level is to control losses and prevent further deterioration; the take-profit level locks in profits to avoid losing gains due to market reversals. Specific ratios can be adjusted based on market volatility and personal risk preferences.
Maintain a good trading mindset
Stay calm and rational: During the trading process, maintain composure and not be swayed by emotions. When the market experiences adverse fluctuations, do not panic, blindly stop loss or increase positions against the trend; when in profit, do not be greedy, take profits in a timely manner.
Patience in waiting: Do not trade just for the sake of trading; wait patiently for opportunities that align with your trading strategy. Sometimes, the market may be in a non-trending or volatile state, where frequent trading can lead to losses; wait for the market to show clear trends or signals before taking action.
Continuous learning and practice: The cryptocurrency market is evolving rapidly, with new concepts, technologies, and trading strategies emerging continuously. Keep learning, stay updated on industry trends and relevant knowledge, and improve your trading skills.
