In this field filled with opportunities and risks, the crypto world sees legends of wealth creation and destruction unfolding every day. As a seasoned crypto blogger, I have witnessed countless individuals stepping into the crypto world with dreams, only to fail due to a lack of correct understanding and strategies. Today, I am here to share some practical insights and strategies for survival in the crypto world, hoping to help everyone avoid detours in this complex market and achieve their wealth goals.
Rules for survival in the crypto world
Clarify investment goals and allocate funds reasonably
Before entering the crypto world, it is essential to clarify your investment goals. Do you want to speculate in the short term for quick gains, or are you looking for long-term investments to share in the blockchain industry's development dividends? Different goals dictate different investment strategies and fund allocation methods. If it's short-term speculation, the fund allocation should be relatively flexible, and the invested funds should not affect your daily life and financial security. If it's long-term investment, consider some mainstream coins with larger market capitalizations and higher stability, such as Bitcoin and Ethereum, and reasonably allocate part of the funds to promising emerging projects. For example, you could invest 70% of the funds in mainstream coins and 30% in exploring emerging projects.
Reject blind following and maintain independent thinking
The crypto world is a place of information explosion, with various news and rumors flying around. Many investors often lack independent thinking ability, blindly following trends, buying whatever others buy, and often becoming victims of the market. It is important to know that the authenticity of news in the market is hard to discern, and often, the so-called 'insider information' is just a trap set by manipulators. When faced with various information, we must learn to use our knowledge and experience to analyze and judge, without being swayed by emotions. For example, when news suddenly breaks that a certain project is about to explode, do not rush to buy in but first understand the project's fundamentals, team background, technical strength, etc., before making a decision.
Strictly adhere to discipline and manage risks well
Risk management is the key to survival in the crypto world. During the trading process, it is essential to strictly adhere to discipline and set stop-loss and take-profit points. Stop-loss is to prevent further losses, and when the price falls below the stop-loss point, decisively exit the market without harboring a sense of luck. Take-profit is to lock in profits to avoid giving back profits due to market reversal. For example, you could set the stop-loss at 10% below the purchase price and take-profit at 20%-30% above. At the same time, manage your position reasonably; do not put all your funds into one project or one trade. Diversifying investments can reduce risk.
Rolling techniques
Follow the trend and grasp the momentum
The premise of rolling over positions is to follow the trend and determine whether the market's trend is upward or downward. In an upward trend, when the price retraces to key support levels, consider appropriately increasing positions to expand profits. In a downward trend, be cautious to avoid blindly increasing positions and exacerbating losses. For example, by observing Bitcoin's daily chart, if the price has been continuously rising for a period and the retracement is small, this is a clear signal of an upward trend. At this time, when the price retraces to near the 5-day moving average, if the moving average system still maintains a bullish arrangement, increasing positions can be considered.
Reasonably increase positions and control the pace
The timing and quantity of increasing positions during rolling over are crucial. Generally, each time you increase your position, the amount should not be too large to avoid massive losses if the market reverses. A pyramid-style position increase method can be employed, where the amount of increase is gradually reduced as the price rises. For example, for the first increase, you can invest 10% of the total capital, for the second increase 8%, for the third increase 5%, etc. At the same time, the intervals between increases should be reasonably controlled; do not be too frequent and allow the market enough time to validate the continuation of the trend.
Combine technical analysis for accurate judgment
When performing rollover operations, using technical analysis tools can improve the accuracy of judgments. Common technical indicators such as MACD, KDJ, moving averages, etc., can help us determine market buy and sell signals and trend strength. For example, when the MACD indicator's DIF line crosses above the DEA line, forming a golden cross, and the histogram changes from green to red, this is a buy signal, and increasing positions can be considered. Conversely, when the KDJ indicator enters the overbought zone and a death cross appears, we should be cautious of a potential market correction, and it is not advisable to increase positions.
Methods to improve success rate
Conduct in-depth research on projects and discover potential coins
To improve the success rate in the crypto world, one must conduct in-depth research on projects and discover those with potential. This requires us to pay attention to developments in the blockchain industry and understand the technical characteristics, application scenarios, market prospects, and more of different projects. A good project should have innovative technology, an excellent team, broad market demand, and a reasonable economic model. For example, projects focusing on blockchain + finance, blockchain + healthcare, blockchain + IoT, etc., if they can address industry pain points and have practical application value, may have significant development potential in the future.
Learn technical analysis and master market rules
Technical analysis is a method of predicting market price trends through the study of market charts and data. Mastering technical analysis methods can help us better grasp market buy and sell timing and improve trading success rates. In addition to the common technical indicators mentioned earlier, one can also learn some technical analysis patterns, such as head and shoulders, double tops and bottoms, triangles, etc. These patterns can help us judge market reversals or continuations. For example, when the price forms a standard head and shoulders pattern, this is often a strong sell signal, indicating that the market may soon decline.
Maintain a good mindset and avoid emotional trading
In the crypto world, the importance of mindset is self-evident. Many investors are often influenced by emotions such as fear, greed, anxiety, etc., leading to wrong decisions during trading. To maintain a good mindset, it is necessary to correctly view market fluctuations and treat investment as a long-term marathon rather than a short-term sprint. When facing losses, do not panic; calmly analyze the reasons and adjust strategies in time. When gaining profits, do not be overly greedy; learn to be content. Only by maintaining a calm mindset can we make rational judgments and decisions in the complex and ever-changing crypto world.
The crypto world is a place full of challenges and opportunities. To survive and succeed here, we need to continuously learn, accumulate experience, and master the right investment strategies and techniques. I hope the practical insights and strategies shared today will be helpful to everyone. Let’s ride the waves of the crypto world together and achieve our wealth dreams. If you find this article valuable, feel free to like, share, and follow my account. I will continue to bring more exciting content about the crypto world.
