Recently, many new friends have asked me how to operate when starting to trade cryptocurrencies with just a thousand bucks (U currency). Today, I will share a few tips based on my own experience.
If you have 1000U, don't invest it all at once. Divide it into 10 parts, and use 100U each time to trade. As for leverage, about 20 times is reasonable; new traders can easily lose their composure with too high leverage. Keep the remaining 900U safely in a wealth management account as your 'emergency fund'.
If you lose that 100U, don’t think about averaging down. A loss is a loss; take a moment to reflect, then give yourself a short break of a day or two to adjust. The Bitcoin market fluctuates daily, and there are plenty of opportunities, so don’t worry about missing out. Once your mindset is back on track, divide the remaining 900U into 10 parts, with each part being 90U, and start again. This time, be cautious and aim to recover the lost money. If you gain 300U, leave 100U in the account, and quickly withdraw the remaining 200U; this way, you'll feel more secure, and your mindset will improve significantly.
In trading, position management is crucial. Even with a 90% win rate, one mistake can wipe everything out. Be sure to learn some trading knowledge, operate with light positions, and minimize losses. Many people lose money because they don’t understand the market and don’t manage their positions properly. When something feels off, reduce or close your positions; don’t hold on stubbornly.
If you lose more than 2% of your total capital in one day, be cautious; if you lose 6%, quickly close the losing contracts, set a breakeven stop-loss for the profitable ones, and then rest for two or three days; don’t rush back in. Chasing highs is very dangerous; unless the market trend is very clear, don’t try it lightly. Be cautious when adding to your position after making a profit, especially after a significant gain; newly added positions can easily go wrong. If you need to add to your position, either act quickly or wait until the market correction is over, and remember to use the pyramid adding method to keep the risks manageable.