However, high returns are often accompanied by risks. I have compiled some investment tips for the cryptocurrency world based on my own experiences and shared them with everyone.
First, decisiveness
An excellent investor needs the quality of decisiveness. Once you see the opportunity, follow your own thoughts without fear of losses. Reasonable losses can help avoid risks, and one must avoid being indecisive.
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Second, entry points
The entry points for trades. There are two modes in cryptocurrency: bullish and bearish, which can be divided into low bullish, low bearish, high bullish, and high bearish. If there is a one-sided trend, all of these are feasible. However, if it's a fluctuating trend, then low bearish and high bullish are not necessary. One must avoid chasing prices and selling at a loss.
Third, position size
The allocation of funds should be consistent with psychological tolerance. When the position is too large or fully invested, any change in trend can lead to increased losses and changes in psychology, resulting in an inability to operate and analyze calmly, which can cause mistakes.
Fourth, take profit
Under a one-sided trend, using a stop-loss strategy can increase profit potential. In a fluctuating market, take profit requires personal judgment on exit points. In such a market, small profits on each trade can accumulate over time.
Fifth, stop loss
Before investing, you must determine your stop-loss price, and after placing an order, set your stop-loss price. If the market doesn't move as you expected, you can reduce losses at the first opportunity to preserve your capital.
Sixth, frequency
Cryptocurrency can be traded 24 hours a day, so some market movements may be missed. You need to manage your trading frequency; excessive trading can lead to technical analysis errors.
Seventh, mindset
Mindset is the most important aspect of this industry. The amount of profit can affect your mindset, but we must focus on whether we are making or losing money, not how much we earn. It is better to earn less than to disrupt your mindset and incur losses.
Eighth, increase position
In a one-sided trend, we can increase our position in the direction of the trend, but we cannot increase our position against the trend. Increasing position against the trend has a high chance of leading to greater losses, and we must not casually revoke or alter our stop-loss on reverse positions.
Ninth, follow the trend
When the market shows a one-sided trend, we must not think of adjusting at any moment. All indicators may be at high levels, but they can also diverge, and we must not go against the trend.