Once again aiming for historical peaks, the frenzy of soaring prices and the specter of plummeting prices are caught in a deadly struggle in the candlestick meat grinder—Is this the new world tearing open the cracks of the old financial system, or is it a bloody bait thrown by dark pool giants?
The sudden emergence of billion-level chips on-chain data has formed a death resonance with the explosive short positions in exchanges: is it the last blood-red firework above the corpses of retail investors, or a symbolic totem inscribed by giant whales using massive contracts before a monthly trend reversal?
In the vast ocean of virtual currency, from the initial caution to the current ease, every step is filled with challenges and rewards.
Today, I am willing to share my cryptocurrency trading insights and practical experience, hoping to light a lamp for you who are still exploring in the sea of cryptocurrencies.
Major news in the cryptocurrency market often accompanies significant market movements. Cryptocurrency trading is not gambling; it requires clear thinking. Here, I summarize the five key trading techniques in cryptocurrency investment, hoping it will be helpful to everyone.
First technique: Recognize the trend.
Going with the trend is the winning formula for any investment and financial management, so the first technique is "Recognize the trend." The trend is a medium to long-term concept, representing the direction of price changes over a longer period, including upward, downward, and consolidation directions. Therefore, recognizing the trend and using the traditional method of "buy low and sell high" is very prudent. If you want to "chase highs and kill lows" against the market, you must focus on short-term operations.
Second technique: Waiting for a buying point.
"Waiting for a buying point" is the second technique that must be mastered. Investors can use the Fibonacci retracement method or trend line buying method.
Achieved through various methods. Different methods are not superior or inferior; they only differ in suitability and convenience for investors.
Third technique: Find a target.
"Finding targets" is the third technique. Investors can also use the Fibonacci retracement method to achieve this; a target is merely a target, which may be unattainable or can be exceeded.
Sticking rigidly to a target is not advisable; the key lies in the choice after achieving the target: should one close the position or hold it? This should be determined by the "momentum."
Fourth technique: Take profit and stop loss.
"Take profit" and "stop loss" are actually two techniques, but these two techniques are inseparable and complementary, and can thus be regarded as one technique. Formulating strategies for taking profit and stopping loss is crucial for investors.
"Why take profit?" Although this is somewhat difficult for investors with a strong speculative mindset, in a one-sided trend, it is the only way to maximize your profits. If you do not take profit, a sudden market change could lead to high costs, or even loss of a significant market opportunity.
The determination of the take profit price should continuously move up or down with price fluctuations. During an upward trend, use the previous day's closing price as a reference. In a consolidation phase, avoid using take profit and should actively close positions. Promptly stopping loss is a test for investors. When the price drops to the set stop-loss point, it should be executed in a timely manner.
At which support level should the stop-loss be set? How much should the stop-loss amount generally be? It is best to set the stop-loss based on your own feelings and understanding of the market. In medium to long-term trading, stop-loss is not measured by how many points are appropriate, but rather by the importance of the support level as a reference.
Fifth technique: Avoid "greed" and "fear."
Prices are constantly changing, and investors cannot predict the trajectory of future price movements in advance; they can only make predictions based on historical data and certain methods. However, no matter how rigorous the analysis and predictions are, they can still be wrong. Therefore, it is essential to establish the correct mindset and maintain a good attitude.
Avoid "greed": Maintain your profits; "fear": Have the courage to win. The primary principle of investing is to avoid risks. If you cannot avoid risks, no matter how much money you make, you will eventually give it all back. Every person's success has its methods, and investing and trading must have its principles; accumulating small amounts to achieve large results is fundamental to trading.
However, many people forget their original intention, focusing on immediate benefits while overlooking risks, unaware of how weak and insignificant an individual is in the market. If you do not understand how to avoid risks, it is like a small boat navigating in the ocean, which could be capsized by wind and waves at any time.
