In the cryptocurrency market, seizing the right timing is crucial for investors. Here are five key principles to help you maintain a clear mind during a bull market and make more informed investment decisions.
First Iron Rule: Identify Stockpiling Signals
Phenomenon: After a rapid rise in coin price, even the decline is very slow.
Interpretation: This usually means that big players are quietly accumulating chips, preparing for a future surge.
Action Guide: At this time, increase vigilance and closely observe market dynamics. If it is confirmed that institutions or large players are accumulating, consider following their lead, but ensure you have enough information to support this judgment.
Second Iron Rule: Beware of Market Makers Selling Out
Phenomenon: The price of the coin drops rapidly, yet appears hesitant when recovering.
Interpretation: This may be market makers taking advantage of a brief rebound opportunity to sell off a large number of tokens they hold.
Action Guide: In such situations, do not blindly catch the bottom. Approach with caution and even consider reducing positions to avoid further losses.
Third Iron Rule: Pay Attention to Changes in Trading Volume
High Point Strategy: When the market reaches a high and trading volume significantly increases, do not rush to sell; as the market may still have room to rise.
Note: Once a sudden drop in trading volume is detected, immediate action should be taken to withdraw to avoid being trapped.
Low Point Strategy: If the market is at a low and trading volume suddenly increases, do not rush to enter; this may be a temporary rebound.
Advice: Be patient and wait until you see continuous increases in trading volume and signs of capital inflow before considering entering the market.
Fourth Iron Rule: Understand Market Sentiment
Core Concept: Trading cryptocurrencies is essentially about 'trading people's hearts.' The overall sentiment of the market and the behavior of participants have a direct impact on price trends.
Operational Tip: Monitor trading volume to sense market sentiment. A significant increase in trading volume indicates consensus in the market, with everyone actively participating in trading; conversely, it suggests a lack of confidence in the market.
Fifth Iron Rule: Long-Term Perspective and Risk Management
Importance: While short-term fluctuations can yield quick profits, long-term holding of quality assets is key to steady appreciation.
Practical Advice: Build a balanced investment portfolio to diversify risks. At the same time, develop a reasonable stop-loss and take-profit plan.
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