I have been in the crypto world for eight years, which makes me an experienced trader. Initially, I gave up funds for crypto because of its low entry barrier and quick returns.
Although the risks are high, high risks also mean high rewards, which is quite tempting for those who want to get rich quickly. When I first entered the crypto world, no one taught me, and I lost a lot of money. Fortunately, I can now support myself through full-time trading, achieving financial freedom after enduring hardships.
How to choose between trading cryptocurrencies and buying funds?
Many people are torn between trading cryptocurrencies or buying funds; in fact, each has its pros and cons.
Trade cryptocurrencies
Big volatility: It’s common for cryptocurrency prices to fluctuate by 30% in a day, which most people can't handle.
Policy risk: Digital currency regulatory policies vary by region, and the domestic market is still exploring. If policies change, you could lose everything.
High technical requirements: If you don't understand blockchain knowledge, you can easily be trapped by 'air coins'.
Buy funds
Stable fluctuations: Funds have small price fluctuations, suitable for those seeking stability.
Relying on the manager: The level of the fund manager determines the returns.
Redemption restrictions: If you urgently need money to redeem, you may hit a market low.
In simple terms, if you're willing to take risks and understand the industry, then trade cryptocurrencies; if you want stability and peace of mind, then buy funds. But no matter what you choose, you must first understand how much risk you can bear.
In the crypto world, position management is key.
Having been in the crypto world for many years, I have seen people make money through technical analysis, but more have lost everything overnight due to poor position management. To establish a long-term presence in crypto, position management is even more important than technical analysis. Here are my commonly used position management methods:
Buy in batches: Split your money into 5-10 parts and buy one part each time. For example, if you have 100,000, buy 10,000 each time. Don't chase when it rises, and can average down when it falls, which helps control risk and seize opportunities.
Set stop-loss and take-profit: Decide before each purchase; sell if you lose 10%, and at least sell half if you gain 20%. This can avoid most risks.
Funnel bottom-fishing: If you think the market has bottomed out, first try with 10% of your money. If it falls 10%, add 15%, and if it falls 20%, increase to 30%. This is suitable for positioning during market declines, but leave enough funds for future investments.
Pyramid increasing: In a bull market, if you see a trend, first invest 50% of your money heavily. If it rises by 10%, add 30%, and if it rises further, add 20%. The higher it rises, the less you should increase, allowing for both large profits and risk control.
Advice from an experienced trader
Keep cash: Always keep 30% cash. In a bear market, it can be used to buy the dip; in a bull market, it can protect your assets.
Don't follow the crowd: Most 'insider information' in the crypto world is a trap. Do your own research and don't blindly follow trends.
Don't be greedy: Take out a portion of your profits, and use the rest as play money.
The crypto world is like a marathon; being steady is more important than being fast. Money earned by luck is often lost back due to a lack of strategy. Only rational investment and good position management can lead to profits in crypto.
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