There is a very foolish method for trading cryptocurrencies, but this method can almost consume all profits, so take your time to learn. First of all, when trading cryptocurrencies, we should never do three things.
The first thing is to never buy in when the price is rising; be greedy when others are fearful and fearful when others are greedy. Make it a habit to buy when prices are falling.
The second is to never place large orders.
The third is to never go all in; being fully invested makes you very passive, and the market is never short of opportunities. The opportunity cost of being fully invested can be very high.
Additionally, here are six rules for short-term trading:
The first rule is that after the price consolidates at a high level, it usually reaches a new high. After consolidating at a low level, it usually reaches a new low again. Therefore, wait until the direction of the trend is clear before making any moves.
The second rule is to avoid trading during sideways movements. Most people lose money in cryptocurrency trading because they cannot adhere to this simplest principle.
The third rule is when choosing candlesticks, buy when the closing price is bearish and sell when the closing price is bullish.
The fourth rule is that when the decline slows, rebounds are also slow; when the decline accelerates, so does the rebound.
The fifth rule is to build positions using the pyramid buying method; this is the only unchanging principle of value investing.
The sixth rule is that when a cryptocurrency continues to rise or continue to fall, it will inevitably enter a consolidation state. At this point, we do not need to sell everything at high prices, nor do we need to buy in fully at low prices. Because after consolidation, a change in trend is inevitable. If the trend changes from high to low, we need to clear our positions in time; in short, we must act promptly.
