Practical Tips for Short-Term Trading in the Crypto Market!
Some may say that short-term trading is speculation! First of all, it must be stated that short-term trading is not speculation. True short-term trading involves understanding certain market operation rules and requires strong skills as an investment behavior. Short-term trading actually tests a person’s skills and patience. Those who are proficient in short-term trading must have seen many candlestick charts, studied their trends, and summarized general rules.

In addition to reflecting short, medium, and long-term fluctuations, a more macro aspect of candlestick charts is that they can tell you which projects are well-managed in terms of market capitalization and which projects have collapsed after being sold off, merely harvesting retail investors. For instance, we have mentioned several times that there are many forked coins of BTC, but in reality, apart from BCH, other forked coins' candlestick charts are not worth looking at.

The candlestick charts of these forked coins have been falling since the beginning, with basically no fluctuations, as if sliding down a slide, giving retail investors no chance to escape. From their candlestick charts, it can be seen that the market makers no longer hold large amounts of these coins; they are concentrated in the hands of retail investors, and thus no one is pulling the price up, essentially becoming a legacy.

In addition to being able to read candlestick charts, we also need to adhere to several major principles of short-term trading. The first is the profit withdrawal principle: when buying a coin, if it gains more than 10%, we should start to implement the principal protection principle (if it falls back to the buying price, sell immediately without conditions). If it gains around 20%, then we set the rule that this trade must earn at least 10% before selling, in order to maximize profits. If it reaches a 20% gain, we state that we will not sell unless the profit does not drop below 10%, unless we have strong technical certainty of a temporary high point; otherwise, we do not sell.

Secondly, the principal protection principle: after buying a certain coin, if you see it gradually losing 15% (this figure varies by individual, but 15% is generally recommended), you should cut your losses and exit. This is to stop the loss in a timely manner. If it goes up afterward, that’s fine; after all, that entry point was incorrect, and it was a wrong trade. Mistakes come at a cost, which is the loss, and losses will teach you to remember, and with that memory, you won’t chase after the market.

In short, short-term trading must follow some basic principles, especially paying attention to: quick entry and exit does not mean frequent trades, chasing hotspots does not mean blind choice, taking profits does not mean being timid, holding cash on the sidelines does not mean staying away from the crypto market, and trading points should not insist on the lowest or highest prices.


Some strategies or points to note for short-term investing:

1. Positioning: Short-term positions should not be too large, at most 10% of total positioning, with the rest in long-term or for averaging down. After all, long-term positions are the foundation of our profits.

2. Coins: Although it’s short-term trading, try not to touch unfamiliar coins. Prioritize those you are familiar with and can understand. If in a bear market, it is advisable to only touch mainstream coins or even Bitcoin, because these coins, even if stop-losses are not timely, being stuck or losing is only temporary, while altcoins may not be the same; being stuck could mean forever.

3. Time: Personally, I define short-term as within half a month or even a month. Unless you can constantly monitor the market or have relevant automated software, I do not recommend engaging in trades that last only a few hours. The specific short-term time frame should depend on market trends, ranging from a few days to about ten days.

4. Take Profit and Stop Loss: I have found that significant losses in short-term trading usually occur due to untimely take profits or stop losses. Therefore, when participating in short-term trading, everyone must have a general take profit and stop loss plan. This plan does not need to be very detailed; having a general direction is enough, and then it should be adjusted according to market changes.

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