First point, no matter what, you must preserve your lifeline, which means not getting liquidated.
Therefore, setting stop-loss points is necessary; do not blindly increase margin, as this will likely only lead to greater losses.
Staying alive is the only way to have opportunities for profit.
Opportunities for profit always exist in the market; don't think about getting rich quickly. Prioritize survival, then look for buying points.
Leverage should not be set too high, generally kept below 20x, and find suitable profit-taking and stop-loss points for yourself.
Second point, you also need to control risk.
Absolutely, absolutely, absolutely do not operate with a full position.
This also includes using all funds as margin.
Control the amount of each trade to about 1% to 3% of your position.
The frequency of trades should not be too high; observe more and act less, looking for opportunities.
Set profit-taking points; don't dream of making a trade that can yield over 100%. Even if you have already made a 30% profit, you could still be wiped out in a big dragon's downturn.
I call the candlestick charts that rapidly rise or fall in a short period 'big dragons'; rising is called 'ascending dragon', and falling is called 'hidden dragon'. A big dragon usually has fluctuations of 2 to 3 points, or even more; with 20x leverage, that's 40% to 60%, and I've even seen a situation where it rose 130% in a few minutes.
Still, the market always has opportunities for profit; don’t think you’ll get rich in one go.
We must seek profit opportunities under the premise of preserving capital, rather than blindly betting the entire position on a doubling chance.
This is no longer cryptocurrency trading; it's gambling on size.
Turning cryptocurrency trading into gambling is the biggest taboo.
Without any risk control, after several rounds of confrontation, assets could shrink by 90%.
Third point, when buying and selling, follow the trend, but don’t blindly trust your own judgment, especially when it contradicts your expectations.
If prices continue to fall, yet you insist it will reverse soon and buy heavily, you will find prices are only getting lower.
Some people see prices continuously falling and immediately decide to short.
As a result, the final outcomes for both may not be very good.
Why is one choosing long and the other short, yet both are not good?
Because such market conditions will certainly not occur only once.
And each time such situations arise, the outcomes are different.
Whether choosing short or long, if there is a blowout in a market (here referring to hitting the stop-loss point), the resulting loss will take a long time to recover.
So when encountering extreme one-sided markets, whether continuously rising or continuously falling, it's best to watch first and not participate blindly.
If you must participate, set a smaller profit-taking point and engage with small amounts. When participating, also choose to buy in line with the trend, not against it.
For example, if prices are continuously falling, set a small profit-taking point to short.
If you find the situation is not right, immediately close your position and wait for a new pattern to form.