In any investment market.
The basic investment strategy remains consistent. However, for a complex and changing market, mastering stock investment strategies is essential. On this foundation, investors must also learn and master certain practical skills, as some investment techniques tested through extensive practice are not only philosophically meaningful but also have significant practical guidance. Here are 20 investment techniques that can help your investment journey.
1. Invest with 'idle money'.
Remember, the money used for investment must be 'idle money', meaning funds that do not have urgent and specific uses at the moment. If investors use essential household expenses for investment, any losses would directly affect family livelihood. Alternatively, if one uses money that should not be invested to make a profit, the psychological state will be at a disadvantage, making it difficult to maintain an objective and calm attitude during decision-making, increasing the chances of failure in the investment market.
2. Know yourself and you will win.
Know yourself and your opponent, and you will never lose. However, being in the market means that knowing yourself is paramount; investors need to understand their own character because those who are easily impulsive or have serious emotional tendencies are not suited for this investment. Most successful investors can control their emotions and have strict discipline, effectively restraining themselves. Therefore, knowing oneself is the key to ultimately succeeding in the cryptocurrency market.
3. Face the market squarely and discard fantasies.
The market is real; do not let emotions dictate your actions, overly yearning for the future and reminiscing about the past. A seasoned trader said: A person full of fantasies, emotionally rich, and very expressive is a wonderful and happy person, but they are not suited to be an investor. A successful investor can separate their emotions, fantasies, and trading.
4. Small investors should not invest blindly.
Successful investors do not blindly follow others' opinions. When everyone is in the same investment position, especially when small investors are also following suit, successful investors will feel danger and change their course. Blindly following is a fatal psychological weakness of small investors. When economic data is released or a piece of news suddenly appears, they jump into the market as soon as the price chart 'breaks' within 5 minutes. They are not afraid of everyone losing money, only that everyone makes money. In a sense, sometimes misreading the market trend or having the situation suddenly reverse after entering a position, leading to being trapped, is a normal phenomenon; even experts cannot escape this. However, the most foolish actions in decision-making and post-processing usually stem from the psychology of small investors.
5. Do not overtrade.
To become a successful investor, one principle is to always maintain funds of 2-3 times your investment to cope with price fluctuations. If your funds are insufficient, you should reduce the contracts you hold; otherwise, you may be forced to 'cut losses' due to lack of funds, even if your judgment later proves correct.
6. Once the decision is made, do not change it lightly.
If you have fully considered and analyzed, and set the price level and plan for entering the market for the day, do not change your decision lightly due to fluctuations in the price at the moment. Decisions made based on daily price changes and market news, unless made by an investment genius, are generally very dangerous.
7. Make decisions promptly.
When investing in the Bitcoin market, there are many psychological factors that lead to failure. A common scenario is that investors face increasing losses and, even when they know there is no longer hope, often hesitate and fail to make prompt decisions, thus falling deeper into losses. A brave person must cut off their arm when necessary.
8. Do not implement others' opinions.
This is not to advocate for dogmatism; it should be known that only you will be responsible for your investment results among investors. When you have grasped the market direction and made a basic decision, do not change your decision lightly due to the influence of others. Sometimes others' opinions may seem very reasonable and prompt you to change your mind, only to realize later that your decision was the correct one. Therefore, others' opinions are always just a reference; your own opinion is the decisive factor in buying and selling.
9. When uncertain, wait and see.
Investors do not have to enter the market every day. Beginners often rush to buy and sell, but successful investors will wait for opportunities, and when they feel confused or uncertain after entering the market, they will leave and adopt a wait-and-see attitude.
10. Stop buying and selling appropriately.
Daily trading can gradually dull your judgment. A successful investor once said: Whenever I feel my mental state and judgment efficiency drop below 90%, I start losing money, and when my state is below 90%, I begin to incur losses. At this point, I will put everything down and go on vacation. A short break from the market can allow you to re-understand the market and yourself, and help you see the future direction of investment clearly. Remember, if you stay in the forest for too long, you won't see the trees.
10. Stop buying and selling appropriately.
Daily trading can gradually dull your judgment. A successful investor once said: Whenever I feel my mental state and judgment efficiency drop below 90%, I start losing money, and when my state is below 90%, I begin to incur losses. At this point, I will put everything down and go on vacation. A short break from the market can allow you to re-understand the market and yourself, and help you see the future direction of investment clearly. Remember, if you stay in the forest for too long, you won't see the trees.
11. During adversity, leave the market to 'rest'.
Investors are often in a state of extreme tension due to the personal gains and losses involved. If they are making a profit, there is a little satisfaction to comfort them; but if they are facing adversity, with continuous losses and unnecessary mistakes, they must be cautious not to let their minds become inflated and lose clarity and calmness. At this time, the best choice is to put everything aside and take a break from the market. After the break, the temporary gains and losses will become the past, the inflated mind will have calmed down, and the burden of thought will have been lifted. I believe investment efficiency will improve. There is a saying, 'A general who does not know how to rest is not a good general'; without knowing how to recuperate, talking about breaking through enemies and capturing cities is out of the question.
12. Patience is also an investment.
There is a saying in the investment market, 'Patience is a form of investment', but few investors can truly achieve this or understand its meaning. For those engaged in investment work, it is essential to cultivate good patience and endurance. Patience is often a 'multiplier' of investment success, affecting the final result positively or negatively. Many investors do not lack analytical ability or investment experience; they simply lack patience, leading to premature buying or selling and unnecessary losses. Therefore, every investor involved in the market should recognize that patience is also an investment.
13. Let past prices stay in the past.
"Past prices" are often a significant psychological barrier. Many investors make incorrect investment judgments due to the influence of past prices. Generally speaking, after seeing high prices, when the market falls back, they feel quite uncomfortable with the new low prices; even if various analyses show that the market will continue to fall and the investment climate is poor, investors will not sell their holdings at these new low prices, but will feel that it is very 'low' and have the impulse to buy, resulting in being firmly trapped after buying. Therefore, investors should remember to let 'past prices' truly stay in the past.
14. Set stop-loss positions and cut losses.
Set a stop-loss position (which is the point where you have reached your maximum acceptable loss). Once the market reverses and the price drops to the stop-loss point, you must be brave enough to cut losses. This is a very important investment skill. Due to the high risks of Bitcoin, to avoid losses caused by investment mistakes, we should set a stop-loss order every time we trade, meaning that when the exchange rate drops to a predetermined price and may fall further, we will immediately execute the trade. This way, the losses incurred are limited and manageable, preventing further expansion of the loss to the point of total loss. Because even if you cut your losses temporarily, your investment capital remains, and as long as the green mountains are there, you don't have to worry about not having firewood.
15. Do not go all in.
Engaging in contract trading requires acting within your means, and never putting all your life savings or assets on a single bet. Because in such cases, if the market prediction is wrong, there is a possibility of significant losses or even being unable to recover. The more prudent approach is to implement a 'pyramid adding' strategy, starting with a portion of the investment, and if the market is clear and favorable to you, then increase your investment. Moreover, it's crucial to be cautious of developing a 'gambling all-in' mentality during adverse market conditions.
16. Do not let a few points lead to mistakes.
In Bitcoin trading, do not blindly pursue whole numbers when making a profit. During actual operations, some people set a profit target for themselves after establishing a position, such as wanting to earn $200 before leaving, always psychologically waiting for that moment to arrive. After making a profit, sometimes the price is close to the target, and at this time, there is a good opportunity to take profit, but if it is just a few points short, they may miss the best price by waiting due to the original target. Remember, it's not worth it to miss opportunities for a few points.
17. When the situation is unfavorable, strike back.
Sometimes trading with the market, but when entering the market is close to the end, one must be cautious. Once a reversal occurs and the situation is unfavorable, one must strike back. For example, after buying in a bull market, if the price stagnates, followed by a quick drop, do not panic; it’s best to reflect. If you can determine that it is a reversal, cut your losses immediately and strike back.
18. Look for opportunities to establish positions when breaking out of a tight market.
A tight market refers to a situation where the price fluctuations are narrow, with buying and selling forces evenly matched, temporarily in a tug-of-war state. Whether in a rising market or a falling market, once this state ends and breaks through resistance or support levels, the price will leap forward. For experienced investors, this is a great time to enter the market and establish positions. If the tight market is at a long-term bottleneck, the positions established when breaking out of the market will yield significant gains.
19. Be cautious of rebounds after a sharp drop and adjustments after a rapid rise.
In the Bitcoin market, price surges or plummets do not move in a straight line; rapid increases will always adjust, and sharp declines will also rebound. The magnitude of the adjustments or rebounds is quite complex and not easy to grasp. Therefore, after exchange rates surge by two to three hundred points or five to six hundred points, one must be particularly cautious, preferring to wait and see rather than rashly following the trend.
20. Learn risk control.
The Bitcoin market is a highly risky one, with risks mainly stemming from the numerous variables that determine Bitcoin prices. Although there are many theories and doctrines about Bitcoin's volatility now, the fluctuations in the cryptocurrency market often catch investors by surprise. For Bitcoin market investors and operators, it is especially important to learn about risk probabilities. In other words, in Bitcoin investment, it is necessary to fully understand several major issues regarding risk and benefit, the probability of winning and losing, and preventive measures. If you do not have an accurate understanding of risk control and trade Bitcoin arbitrarily, losing money is inevitable.
End!!
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