Mastering Market Rhythm: Essentials of the Low-Buy Strategy

In a market with significant price fluctuations, "low-buy" (buying on dips) is a simple yet powerful strategy. Its core idea is: just like purchasing quality goods when they are undervalued, one should intervene when asset prices drop significantly due to non-fundamental factors and patiently wait for value to return.

Strategy Basis:

1. Mean Reversion Principle: The market may be overly pessimistic in the short term, leading to price deviations from intrinsic value, often followed by a corrective rebound.

2. Avoiding Herd Mentality: Overcoming the instinct to chase highs and panic sell, maintaining rational thinking in times of fear.

3. Value Discovery Opportunities: Corrections often provide institutional and sharp investors with more cost-effective entry points.

Three Key Elements of Operation:

1. Selection of Target Quality: Preferably select core assets with solid fundamentals, high consensus, and good liquidity (e.g., AAVE, SOL, BNB, MKR).

2. Cautious Timing Assessment: Patiently wait for significant discount opportunities, usually requiring observation of a 20%-30% or more deep pullback (depth akin to important promotions).

3. Fine Cost Control: Buy in strict batches (initial position suggested at 1%), increase positions in a laddered manner at key support levels (e.g., every 5%-10% drop), and avoid a one-time heavy position.

Case Analysis: An investor started to build a position in SOL step by step when it dropped from $180 to the $140 range, realizing profits when the price rose above $160, successfully achieving stage returns.

Core Risk Warnings:

• Stay away from assets that experience consecutive sharp declines due to fundamental deterioration (avoid "value traps").

• Adhere to the principle of diversified investment (avoid the concentration risk of a single asset).

• Pre-set strict stop-loss discipline (usually set 5%-10% below initial cost).

The essence of low-buy lies in "hiding one’s capabilities and waiting for the right moment." It tests the investor’s insight and composure—recognizing value amid the clamor and accumulating strength during downturns. Understanding when to exit is as important as identifying entry opportunities. In the next section, we will explore the art of "high-selling" to help you seize profit opportunities.

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