After 8 years of navigating the cryptocurrency market, I dove in with a principal of 200,000 yuan, experiencing countless thrilling ups and downs, and finally succeeded in supporting my family's daily expenses through trading. Along the way, there were surprises of overnight wealth, as well as crises of total loss. Now, I share the experiences I have summarized, hoping to provide some references for everyone.
1. Hold based on market trends, not time.
Many beginners often get tangled up in the holding period, which is actually a misconception. The cryptocurrency market changes rapidly, and the length of time holding does not determine returns. Some cryptocurrencies may peak in price within just a few weeks, while others may stay flat for a long time. What truly matters is whether the market has reached its peak. To judge the market, one can analyze trading volume, market enthusiasm, and relevant technical indicators. When market sentiment is high, trading volume surges, and a plethora of positive news floods in, it is very likely that the market is nearing its end, and one should consider selling.
2. In a rising market, don’t be greedy; secure your profits in time.
During the price increase phase, many people fall into a psychological trap: always thinking about making more money, fantasizing that the price can keep rising, and hesitating to sell at high positions. But the market will not always go up, and greed often causes people to miss the best selling opportunity. Once, a cryptocurrency I held saw a significant price increase in a short period of time, and I was blinded by greed, failing to sell in time. As a result, just a few days later, the price dropped significantly, and my previous profits shrank instantly. Therefore, during the price rise process, one must decisively act based on their profit goals and risk tolerance.
3. Take profits when they are available and secure the victory.
Taking profits sounds easy, but it’s very difficult to do. This not only requires wit but also strong patience. When the cryptocurrency in hand starts to profit, one must learn to analyze calmly and not be blinded by temporary gains. One can set a reasonable take-profit point, and once the target is reached, decisively sell. At the same time, one must also overcome the impulse to re-enter the market to avoid losing existing profits due to overtrading.
4. The whole nation is buzzing about 'blockchain', the selling signal has arrived.
When 'blockchain' is being discussed everywhere, and even taxi drivers and local market vendors start paying attention to cryptocurrency trading, it is often a sign of market overheating. At this time, a large number of retail investors flood into the market, pushing prices artificially high, while the main traders quietly arrange to sell. Historical experience shows that after such nationwide excitement, the market often faces a significant adjustment. Therefore, when everyone around you is talking about blockchain and cryptocurrency trading, it is essential to stay alert and sell your holdings in time.
5. Beware of the impulse to chase prices; be cautious of main traders raising prices to sell.
In the cryptocurrency world, when seeing a sharp price increase, many people regret not buying in at a lower price or buying too little. The main traders exploit the retail investors' itching desire to buy during price increases, creating a trap for raising prices to sell. They first use their financial advantage to push the price up, attracting retail investors to follow suit, and then quietly sell at high positions, leaving the hot potato for retail investors. Therefore, when faced with a sharply rising cryptocurrency, it is crucial to stay calm and not blindly chase the price to avoid becoming the main trader’s scapegoat.
