Three things to avoid in the cryptocurrency market:
Avoid buying during price surges: When trading cryptocurrencies, never buy at high prices.
Impulsive buying during rises: Remember the adage, 'Be greedy when others are fearful, and fearful when others are greedy.' Cultivate the habit of buying during declines, as this is often a wiser approach.
Reject pressure orders: Do not engage in pressure order operations, as there are many risks and uncertainties involved, which may cause unnecessary trouble in your trades.
Avoid full positions: Operating with a full position is highly undesirable. Once fully invested, we become very passive in the market. It is important to understand that there are always opportunities in the market. A full position means giving up other potential opportunities, and the opportunity cost is quite high. The normal advice is to maintain a light or half position.
Short-term market trading mantra:
Focus on market trends after consolidation: When the price of a cryptocurrency consolidates at a high level, it often leads to new highs; conversely, if it consolidates at a low level, it usually leads to new lows. Therefore, it is essential to wait for a clear direction after the change before taking corresponding actions; do not act blindly.
Do not trade during sideways markets: Most traders lose money because they cannot adhere to this principle. During sideways phases, the market direction is unclear, and rash trading can easily lead to losses. Learn to patiently wait.
Operate based on K-line yin and yang: When selecting K-lines, consider buying when a bearish line is formed, and when a bullish line is formed, it is a selling opportunity.
Pay attention to the rhythm of declines and rebounds: When declines slow down, rebounds are often also slow; conversely, when declines accelerate, rebounds tend to be stronger. Be adept at grasping these rhythm changes.
Use the pyramid buying method to build positions: Players need to build positions following the pyramid buying method, which is a relatively stable and reliable strategy in value investing in digital currency and is worth following in practice.
Responding to sideways market changes: When a cryptocurrency experiences a prolonged rise or fall, it is highly likely to enter a sideways state. At this time, there is no need to sell everything at high prices, nor is it necessary to buy in fully at low prices. After consolidation, a change in trend is inevitable. If the trend shifts downward from a high position, it is important to liquidate promptly to avoid risks.
Why do I always make small profits and large losses?
In cryptocurrency investment, there is a common phenomenon: clearly deciding to engage in trend trading, yet often losing direction in operations, thinking about long-term gains while also pursuing mid-term swing trades, and not wanting to miss out on short-term small profits. The result is often disappointing returns, frequent entrapment, and even losses, ultimately missing out on trend wealth.
This phenomenon appears to be an issue of 'opportunity cost,' but in reality, it is a matter of cognitive, mindset, and execution errors.
Step 1: Transition from long-term to mid-term, cashing in profits early.
Step 2: Transition from mid-term to short-term, repeatedly chasing highs and cutting losses.
Step 3: Trend trading completely out of control.
How to truly seize the wealth of trend trading?
First, clarify your goals and focus on one strategy.
Before investing, you need to determine whether your goal is long-term, mid-term, or short-term. Long-term investors should have a mindset of 'steady as a mountain, assessing the situation,' mid-term traders need to focus on swing buy and sell points, while short-term players should concentrate on short-term fluctuations. Trying to achieve all three often leads to losing direction. To truly seize your wealth opportunities, you must focus on one strategy, as the logic and rhythm of each strategy are different.
Secondly, give up the obsession with extra gains.
If you decide to engage in trend trading, focus on long-term goals and ignore short-term fluctuations. Don't try to accommodate all goals in a single trade.
For swing and short-term opportunities, set boundaries in advance. Do not be greedy and want to grasp everything; instead, stick to your original intention.
In investing, greed is the biggest enemy. Only by surpassing the mindset of wanting everything can one truly grasp the initiative in investment and maximize returns. As an old saying goes: 'You cannot have both the fish and the bear's paw, but if the fish is big enough, it is also satisfying.'
Finally, enhance your understanding of trend trading.
The core of trend trading lies in seeing the big picture. Investors need to enhance their confidence in market trends through fundamental research and technical analysis. Only with a sufficient understanding of trends can one remain calm amidst fluctuations and profit steadily.
The market never lacks opportunities, but those who truly make money are the investors who have the patience to wait and consistently execute their strategies. A lack of patience is the reason many investors ultimately 'give up halfway.'