In the cryptocurrency market, many investors harbor dreams of getting rich overnight, following trends blindly, only to find themselves trapped in losses at high prices. As an experienced investor, I want to tell you that those who can achieve stable profits in the crypto world are not the speculators chasing short-term gains, but the rational, steady investors. Today, I will share how to invest steadily in the crypto world, how to use rolling position strategies and reasonable position management to achieve long-term stable profits.
The mindset for investing in the crypto world: Control emotions and avoid greed.
In the crypto world, successful trading relies not only on technical analysis but also on good psychological control. Many investors make irrational decisions during market fluctuations due to emotional swings. For example: impulsively chasing high prices when the coin price rises sharply, and panicking to sell when the price drops. This emotional trading is one of the main reasons retail investors incur losses.
As an investor, you need to remain calm and rational. Especially when facing significant market fluctuations, you need to stay firm in your investment strategy and avoid blindly chasing highs and selling lows. Don't be affected by short-term price fluctuations; instead, judge the timing of buying and selling rationally from a long-term market trend perspective.
Position management: Reduce risk and ensure steady profits.
Position management is one of the most important parts of investing. Especially in the crypto market, where the market is highly volatile, reasonable position management can help you retain funds during market corrections and quickly profit during price increases. Here are my personal suggestions for position management:
1. Separate position management to reduce risk.
The core principle of position management is to diversify risks and not put all your funds into a single trade. If you have 30,000 USDT, you can split your positions as follows:
Divide your funds into three parts, each part being 10,000 USDT.
Use one part of your capital for each opening. This way, even if you incur losses, they won't impact your entire capital. Specific leverage settings: For major currencies (like Bitcoin), use no more than 10x leverage; for smaller coins, no more than 5x leverage.
2. Operations of increasing and decreasing positions.
When in profit, consider increasing your position. Especially during clear market trends and favorable conditions, increasing your position can amplify profits. However, before increasing your position, ensure that your costs have been lowered to avoid blindly increasing your position, which could lead to greater risks. One misconception to avoid here is: unrealized profits are not a reason for unlimited position increases; you must ensure the market trend continues to develop favorably.
3. Set take-profit and stop-loss to avoid excessive greed.
Setting take-profit and stop-loss points is a fundamental operation that every investor needs to establish. If the stop-loss point is not set properly, you may miss the opportunity to exit due to small fluctuations, resulting in significant losses; if the take-profit point is unreasonable, you may miss profits when prices reverse. A reasonable take-profit and stop-loss strategy can help protect your profits and avoid emotional disturbances from chasing highs and selling lows.
3. Rolling position strategy: Capture the 'big opportunities' in the market.
The rolling position strategy achieves the compound interest effect by increasing positions in a major trend. Many investors misunderstand rolling positions as blindly increasing positions, but in reality, rolling is a method that emphasizes timing and strategy. Only when the market trend is clear and signals are strong is it suitable to roll positions.
Three major applicable scenarios for rolling positions:
1. Direction selection after long-term sideways movement: When the market enters a sideways consolidation phase with reduced price fluctuations, it usually indicates a potential breakout. At this time, if the market breaks through key support levels above or below, rolling position operations can be carried out.
2. Corrections after significant rises in a bull market: Corrections in a bull market often present a good buying opportunity. When a significant rise is followed by a 20%-30% correction, it is suitable to increase your position and wait for the market to recover.
3. After breaking through key resistance levels: When the market breaks through long-term key resistance or support levels, it usually signifies that prices will enter a new upward cycle. At this time, rolling position operations can bring significant returns.
Specific methods for rolling positions:
Increasing position with unrealized profits: If you have gained unrealized profits after a price increase, consider increasing your position, but only if you have lowered your holding costs to ensure minimal risk.
Base position + T-trading rolling: Divide funds into two parts, keep one part as a base position unchanged, and use the other part for high sell-low buy rolling operations. This can not only reduce losses but also gain profits amid volatility.
4. Risk management: Stay calm amidst volatility.
In the cryptocurrency market, risk control is key to determining long-term profitability. The market's volatility is high, and rapid price fluctuations often damage investors' emotions, leading to poor decision-making. Therefore, maintaining a good risk control mechanism is essential.
1. Establishing risk tolerance:
Psychological preparation: The retracement in the cryptocurrency market is usually large, so you must be prepared to endure a 30%-50% retracement. Only with a calm mindset can you achieve maximum gains in market fluctuations. Diversified investment: Do not concentrate all your funds in a single trade. Diversified investment can effectively reduce risks arising from single market volatility.
2. Avoid excessive speculation with high leverage:
The high leverage characteristics of the cryptocurrency market can easily lead investors to develop a mindset of excessive speculation, but behind high leverage lies significant risk. When engaging in leveraged trading, always act within your means, control your leverage ratios reasonably, and ensure that risks are manageable.
5. Conclusion: Rational investment, stay away from 'get rich' fantasies.
Through reasonable position management, rolling position strategies, setting take-profit and stop-loss orders, and market trend analysis, you can achieve stable profits in the cryptocurrency market. However, remember that the crypto world is not a place for getting rich overnight. Investors should remain rational, avoid blindly pursuing short-term profits, and focus on long-term planning. The high volatility of the market and short-term temptations may cause you to lose your rationality, but only by maintaining a calm mindset and scientific investment methods can you navigate this tumultuous market steadily.
Investing in the crypto world is not as difficult as it seems. If you are also a tech enthusiast and are focused on studying technical operations in crypto, follow 'Cryptocurrency Musing' to uncover the secrets of the crypto world.
