Survival Rules for Cryptocurrency Trading: Three Absolute No-Go Zones, Six Short-Term Lifesaving Techniques
Three Major Prohibitions:
Never Chase High Prices
When prices are rising, don’t follow the crowd to enter the market! Real opportunities arise during market panic; this is when you should be bold. When everyone is madly chasing the price up, it’s better to hold back and observe.
Never Go All In on a Single Coin
Betting your entire wealth on a single coin is equivalent to gambling. You must diversify your holdings to prevent a single coin from crashing to zero.
Reject Full Position Trading
Being fully invested is like cutting off your own escape route! The market presents new opportunities every day; being fully invested will make you miss the chance to adjust your position, and once you’re trapped, there’s no capital to remedy the situation.
Ironclad Rules for Short-Term Trading:
Reverse Thinking for Buying and Selling
When the coin price skyrockets, wait a moment; there's an 80% chance of a pullback. After a crash, don’t rush to buy the dip; you might end up stuck halfway. Wait for the trend to clarify before acting; it’s better to miss out than to make a mistake.
Escape When the Market is Sideways
When prices are stagnant for a long time, there’s a 90% chance of a trend change. This is when trading is most likely to incur losses; staying in cash and observing is the best strategy.
Act Based on K-Line Analysis
Gradually build your position during a long bearish candle, and take profits in batches during a strong bullish candle. When a long upper shadow or doji appears, decisively exit; this is a typical signal of the main force unloading.
The Pattern of Sharp Declines and Slow Increases
After a sharp decline, rebounds are slow like a snail, while prolonged declines followed by a sharp fall feel like free fall. Sharp declines often accompany V-shaped reversals, while prolonged declines may lead to a bottomless pit.
Pyramid-style Position Building Method
Use 30% of your funds for the initial position, add 20% for every 5% drop in price, and only use 10% for the last purchase. This effectively averages your costs and avoids being fully invested too early.
Traps After Sharp Rises and Falls
After a short-term price surge of 50% or a drop of 40%, the market will inevitably enter a sideways consolidation phase for 1-3 months. During high-volume stagnation at high prices, reduce your position; during low-volume declines at low prices, stay on the sidelines and wait for a breakout before acting. Remember: the longer the sideways movement, the higher the upward potential, but if a downward trend starts, you must run faster than anyone else!
Core Logic: Surviving a bear market relies on discipline, while making money in a bull market relies on mindset. Invest with spare money, and limit each loss to no more than 3% of your principal. Three years later, you will thank your current self for resisting the urge to make reckless purchases.
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