I am 43 years old this year, and I started exploring the cryptocurrency trading industry at the age of 28. By 2024, my assets will reach the height of A8. Over the years, I have not really experienced any unhappy events, and bothersome matters have been few and far between. Today, I patiently summarize some knowledge that I have gained through personal practice for the vast community friends. I hope it can help everyone 😉
The knowledge manual edited by myself on the picture is available for friends in need (free)!!!
Beginner investors (small retail investors) often face numerous challenges and can easily fall into the trap of losses. Today, I will share some practical contract trading strategies to help everyone avoid pitfalls as much as possible and reduce the risk of losses.
1. Short-term Cryptocurrency Trading: Opportunities and Risks Coexist
Short-term cryptocurrency trading is the most common play in contract trading and is typically attempted by newcomers entering the cryptocurrency world. However, this method carries extremely high risks, and profits often rely more on luck; many times, the earnings may not even cover the amount lost in a single failure. For inexperienced and unskilled beginners, short-term trading is like blindly sailing in a turbulent sea, and a small mistake could lead to capsizing.
2. Profit-taking and Stop-loss: The Key Valve for Controlling Risks
In contract trading, setting profit-taking and stop-loss points is crucial. The cryptocurrency market is highly volatile, and prices can change rapidly. Setting reasonable stop-loss points allows for timely closing of positions when market trends are unfavorable, effectively avoiding significant losses. An appropriate profit-taking strategy helps secure profits and prevents losses due to market reversals, while also assisting investors in better controlling their profit targets. For example, when the set stop-loss price is triggered, exit decisively without harboring any illusions; when the profit-taking point is reached, take profits promptly to avoid losing profits due to greed.
3. Disciplined Trading: The Key to Overcoming Emotions
During contract trading, emotions like greed and fear often influence investors' decisions, which is one of the primary factors leading to losses. To avoid emotional interference, it is essential to set profit-taking and stop-loss points in advance before each trade and strictly follow the plan. Maintain a stable trading rhythm and do not be swayed by short-term market fluctuations. At the same time, establish a clear trading plan for yourself, limiting the number of trades per day. Once a loss occurs, do not blindly attempt to recover by making another trade, as such impulsive behavior often further exacerbates losses, leading to a vicious cycle.
4. Market Analysis: The Wisdom of Acting According to Circumstances
The cryptocurrency market trends are mainly divided into one-sided trends and fluctuating trends. Fluctuating trends are more common on weekends. In such trends, long-term trading is not suitable; investors should take profits and exit timely to ensure their profits are secured. One-sided trends usually occur only in specific time periods and are relatively easier to grasp. In a one-sided upward trend, buy on dips; in a one-sided downward trend, sell on highs. This way, considerable profits can be obtained. However, it is important to note that accurately judging the type of market trend is not easy and requires investors to continuously accumulate experience and enhance their analytical skills.
5. Trend Judgment: The Key to Grasping Market Pulse
Accurately judging market trends can be considered half of the success in contract trading. Investors can assess whether the market is in an upward or downward trend over a period by observing daily and weekly candlestick charts. Blindly chasing after price increases or drops is a very dangerous behavior that can easily lead to losses, ultimately resulting in having to exit helplessly. For instance, in an upward trend, seek opportunities to enter long positions during pullbacks; in a downward trend, wait for a rebound to enter short positions. Acting in accordance with the trend can improve the success rate of trades.
6. Position Management and Leverage Techniques: Guardians of Capital Safety
In contract trading, position management is particularly important. Taking an account capital of 1000 as an example, controlling the margin ratio for trades between 5%-10% is reasonable, meaning that the margin should be between 50-100, which can effectively reduce the risk of liquidation. The size of leverage should be flexibly adjusted based on market conditions. For trades that enter and exit quickly, higher leverage can be used appropriately to improve capital utilization and profit speed, but reasonable profit-taking targets must also be set, typically with a profit margin of 20%-50%. Given the rapid changes in market conditions, investors must learn to restrain their greed and know when to stop, as excessive greed often leads to negative consequences. The general principle is that high leverage can be used for short-term trading, while low leverage should be chosen for long-term trading to ensure capital safety and stability.
Cryptocurrency contract trading is full of challenges, but as long as you master the correct methods and techniques, maintain rationality and calmness, you can avoid risks to a certain extent, reduce losses, and achieve asset appreciation. I hope these experiences and suggestions can help everyone, and I wish all of you could achieve ideal profits in cryptocurrency trading. But please remember, investment carries risks, and trading should be done with caution. The above content is for reference only and does not constitute investment advice.