Essentials of Common Strategies in Cryptocurrency (8 types)
Two-Way Trading:
Core: Utilize contract trading, allowing both long (buy up) and short (buy down) positions.
Applicable: Usable in both bull and bear markets (requires certain technical analysis abilities).
Key: Strict risk control is required (leverage can amplify risks).
Hodling Method:
Core: Buy quality coins (e.g., BTC/ETH/mainstream coins) and hold them for a long time (more than six months).
Applicable: Usable in both bull and bear markets (crossing cycles).
Difficulty: Extremely tests patience and belief; one must ignore short-term fluctuations, making it easy for beginners to give up halfway.
Potential: Long-term profit potential is enormous (more than ten times is not rare).
Bull Market Buying Dip Method:
Core: For bull markets only. Use a small amount of funds (<20%) to buy potential altcoins that have sharply dropped (ranked 20-100 by market cap). Sell after a rebound (e.g., 50%) and switch to the next coin that has dropped.
Key Points: Be cautious in choosing coins (avoid coins that can drop to zero), be patient in holding (bull markets will eventually relieve positions), beginners should use with caution.
Hourglass Rotation Method:
Core: For bull markets only. Funds move like an hourglass, switching according to the order of coin rises: Leading coins (BTC/ETH) -> Mainstream coins (LTC/EOS, etc.) -> Stagnant coins -> Small coins.
Operation: After a significant rise in current tier coins, build positions in the next round of unrisen tiers in advance.
Pyramid Buying Method:
Core: Anticipate a major drop, and buy in batches. The lower the price, the heavier the buying position.
Example: Current price 100%, then: buy 10% of the position at 80%, 20% at 70%, 30% at 60%, 40% at 50%.
Goal: To dilute costs and capture rebounds.
Moving Average Method:
Core: Basic technical strategy. Observe key moving averages (MA5, MA10, MA20, MA30, MA60).
Operation (Daily):
Hold: Current price > MA5 & MA10.
Sell: MA5 crosses below MA10 (death cross).
Buy: MA5 crosses above MA10 (golden cross).
Grid Hodling Method:
Core: For familiar long-term quality coins, use low buy and high sell during fluctuations to earn in coin terms.
Operation: Set buy price below the current price (e.g., 90%) and sell price above the current price (e.g., 110%). After a successful purchase, immediately place a sell order, and continue the cycle, accumulating profits into more coins.
ICO Compound Interest Method:
Core: Participate early in new projects (ICO/IEO). After the project goes live and surges (3-5 times), withdraw the principal to invest in the next project, keeping the profits.
Goal: To roll over principal and achieve compound growth.
Risk: High project failure rate, requiring strong selection ability.
Strategy Summary and Warning:
No Universal Strategy: Each method has its specific applicable scenarios (bull market/bear market/volatile market) and risks.
Core Elements:
Trend Judgment: Identifying bull and bear markets is the prerequisite (e.g., methods 3, 4, 5 depend on bull markets).
Strict Risk Control: Position management (e.g., 3-method position limits), stop-loss and take-profit (e.g., 1,6 methods) are fundamental to survival.
Patience and Discipline: Hodling, hourglass method, and grid method require patience to wait for signals or targets.
Target Selection: The success or failure of hodling, buying dips, and ICO methods depends on selecting the right coins/projects.
Beginner's Advice: Start with relatively simple and controllable risk strategies like hodling or moving average methods, and stay away from high leverage, chasing highs and lows, and junk coins.
Risk Warning: The risks in the cryptocurrency market are extremely high; the above strategies may incur losses, and investment should be cautious and within one's capacity.
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