If you want to trade cryptocurrencies well, there are three things you should never do.
When trading cryptocurrencies, never rush to buy when prices are rising; you need to learn to think inversely. When others are afraid, be brave and look for buying opportunities; conversely, when others are extremely excited, you should be cautious and consider whether it’s time to withdraw.
When trading, never bet all your money on a single coin; this approach entails too much risk. If things go wrong, you might lose everything. Diversify your investments; if one side doesn't shine, the other might. This is the true way to make money steadily.
When trading, never operate with a full position; you should leave some cash on hand. The market offers many opportunities; if you are fully invested and a good opportunity arises, or if you need to adjust your strategy, you won’t be able to act, which would be a significant loss! Keep some cash to respond flexibly, as it reduces opportunity cost.
In cryptocurrency trading, stability is paramount. Don't think about making a fortune overnight; take it slow, learn this simple method, and you will ensure a long-lasting presence in the market while also making money.
Next, let us delve into the wisdom rules of short-term trading.
Rule one: High-level consolidation may lead to new highs; low-level hovering may indicate new lows. Observing changes patiently, waiting for clear direction before taking action is the prudent path.
Rule two: Remain still during consolidation, with a mind as calm as still water. Most people fail because they cannot endure the silence; only by maintaining this tranquility can extraordinary achievements be realized.
Rule three: The fluctuation of candlesticks presents opportunities for buying and selling. A daily bearish candlestick may signal a good buying opportunity; a daily bullish candlestick suggests considering reducing positions, which is a way to align with the market rhythm.
Rule four: Slow declines lead to slow rebounds; rapid declines may lead to rebounds. The market fluctuates according to its own laws; understanding these principles allows you to seize opportunities.
Rule five: Pyramid-style position building, the essence of value investing. Layered increases, steadily adding positions, exchanging time for space, waiting patiently for flowers to bloom.
Rule six: After rises and falls, there will always be consolidation. At this time, you don’t need to completely sell off at high points, nor should you heavily invest at low points. Because after consolidation, a change is imminent. If the price drops from a high point, you should stop losses promptly to preserve your strength for future battles.
On this path of investment filled with knowledge and challenges, may we all become the calmest observers and the bravest pioneers, using wisdom as a boat and patience as a sail, sailing towards the shores of wealth.
What does a mature trading system look like?
All trading systems include four frameworks:
1. Judging the direction of trends.
2. Selecting entry conditions and entry positions.
3. Setting stop losses after opening positions and profit targets.
4. The application of capital management.
All trading systems consist of these four frameworks. Two more points to consider about trading systems:
First: Trading systems can be composed of indicators that everyone is familiar with; however, they cannot be put into practice directly after formation. After establishing a trading system, move on to the next step of backtesting, and through extensive backtesting, confirm that the trading system can be profitable before gradually applying it in practice.
Second: Trading systems should not be overly complex; they should be easy to execute. Adhere to one principle: the simpler, the better for profitability; the simpler, the easier it is to execute.
No matter how diligent a fisherman is, he won’t go out to sea during a storm but will carefully protect his boat. This season will eventually pass, and sunny days will come! Follow me, and I will teach you how to fish and the art of fishing. The door to opportunities is always open; by going with the flow, you can live a life in harmony with the tides. Save this and keep it in mind!
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Impermanence brings impermanence, brings impermanence, brings impermanence!!!
Important things should be said three times!!!