A must-read for beginners! ! Here are some common rules for cryptocurrency trading:
I. Basic preparation
1. Knowledge reserve
• Have a deep understanding of the basic principles of blockchain technology, such as distributed ledgers, encryption algorithms, etc. Understand different types of cryptocurrencies, such as Bitcoin is the earliest decentralized cryptocurrency, and Ethereum has smart contract functions, etc.
2. Risk awareness
• Be aware that cryptocurrency trading is extremely risky. The cryptocurrency market is highly volatile, and prices may rise and fall sharply in a short period of time. For example, Bitcoin experienced a plunge from nearly $20,000 in 2017-2018.
II. Investment strategy
1. Fund management
• Only use spare money to invest. It is generally recommended to invest no more than 10%-20% of disposable assets. Allocate funds reasonably and do not concentrate all funds on one cryptocurrency. For example, you can invest in Bitcoin, Ethereum and some small-cap cryptocurrencies with potential in different proportions.
2. Set goals and stop losses
• Set profit targets, such as considering partial selling when the return reaches 20%-30%. At the same time, be sure to set a stop loss point, such as stopping loss in time when the loss is 10% - 15% to avoid further loss.
3. Go with the trend
• Observe the market trend. If the overall market is in an upward trend, you can increase your position appropriately; if the market is in a downward trend, be cautious about buying or consider reducing your position.
III. Trading process
1. Choose a reliable platform
• Choose a well-known, compliant, and secure cryptocurrency trading platform, and check the platform's reputation, user reviews, security measures, etc. For example, Binance and Huobi are larger trading platforms.
2. Avoid over-trading
• Don't be swayed by short-term price fluctuations. Frequent trading often increases transaction costs and makes it easy to lose direction in market fluctuations.
