In the crypto market, turning one thousand into one hundred thousand is not easy, but it is not impossible. I have been trading stocks for ten years, and in the first three years, I entered the market with five hundred thousand in capital, only to lose it down to fifty thousand. Friends and family advised me to give up, thinking my trading was a sign of neglecting my family and lacking ambition. Faced with doubt and ridicule, I was on the verge of giving up, but my unwillingness to accept defeat led me to give myself one more chance. With the remaining one hundred thousand in capital, after three years of exploration and effort, I eventually earned over seven and a half million.
Today, I want to share some experiences and strategies for trading cryptocurrencies, hoping to provide some help for your investment journey in the crypto world.
I. Accurately Respond to Market Volatility
The sharp decline in the cryptocurrency market serves as a touchstone for assessing the quality of cryptocurrencies. When the market crashes, high-quality cryptocurrencies often experience smaller declines, often due to market makers actively defending their prices. For example, Bitcoin had a relatively small decline during the winter of 2018, highlighting its stability. Conversely, if a cryptocurrency declines far more than the market during a downturn, it could be a dangerous signal.
II. Clear Short-term and Medium-term Strategies
Short-term: The 5-day moving average trading method is a powerful tool for short-term operations. When the price of the currency firmly stands above the 5-day moving average, it signals that the bullish force is dominant, making it an excellent time to buy. However, once the price falls below the 5-day moving average, it indicates that the bearish force is starting to strengthen, and one should promptly stop-loss.
Medium Line: The 20-day moving average provides a clear directional guide for medium-term investors. When the price of the currency successfully breaks above the 20-day moving average, and the 20-day moving average starts to turn upward, it marks the beginning of a medium-term upward trend. Conversely, if the price falls below the 20-day moving average and the 20-day moving average turns downward, it signals a medium-term downward trend.
III. Strictly Adhere to Stop-loss and Take-profit Discipline
In the investment process, stop-loss and take-profit are important means to protect capital safety. If the price remains stagnant for a long time after buying or the loss exceeds the preset value, one should stop-loss promptly. For oversold cryptocurrencies, once it is confirmed they have entered a rebound phase, one can follow up, but be sure to set a take-profit point to avoid giving back profits.
IV. Hold Tight to Leading Cryptocurrencies
Leading cryptocurrencies have unparalleled influence and stability in the cryptocurrency market. During market uptrends, they often see remarkable increases; during market downturns, they exhibit strong resistance to falling. Therefore, investors should dare to buy leading cryptocurrencies when others are fearful and sell appropriately when others are greedy.
V. Go with the Trend, Identify the Right Buying Opportunity
In the cryptocurrency market, following the trend is the key to survival and profit for investors. Do not obsess over buying at the lowest price, but rather buy when the price stabilizes after a pullback and an upward trend begins to emerge. Although the price at this time may not be the lowest, one can still achieve considerable gains during the subsequent upward movement.
VI. Review: The Bridge to Continuous Profit
After each trade, regardless of success or failure, it is essential to review and summarize. Analyze the timing of entry, whether the stop-loss and take-profit settings are reasonable, and whether market sentiment influenced the trade. Only by continually reflecting and summarizing, and optimizing trading strategies, can one achieve long-term stable profits amidst the tumult of the cryptocurrency market.
In summary, trading cryptocurrencies is not easy, but as long as you master the correct methods and strategies, and strictly adhere to discipline and reviews, you can get closer to financial freedom.
