Author: Biteye, Core Contributor Viee

Editor: Biteye, Core Contributor Crush

Community: @BiteyeCN

"Be greedy when others are fearful." After experiencing yesterday, is it the right time to enter the market? Here are 6 suggestions from an experienced investor:

• Bottom-fishing formula for this bull market: mainstream coins + mainstream Meme coins
• Avoid trading on leverage
• Implement timely stop-loss, here are several stop-loss strategies
• Bottom-fish in stages
• Avoid excessive portfolio diversification
• Hold a sufficient amount of stablecoins

01. Bottom-fishing formula for this bull market: mainstream coins + mainstream Meme coins

When the market experiences a significant drop or major adjustment, it usually brings the best "super bottom" opportunity, but it is recommended to bottom-fish in batches and not go all in. Additionally, it is advised to bottom-fish in mainstream coins and mainstream Meme coins.

Bottom-fishing strategy for Meme coins: For Meme coins with large trading volumes and sustained popularity, they usually follow a relatively predictable pattern.

Whenever these tokens reach their all-time high (ATH), their retracement is likely to not exceed 60%. This means that strategic buying can be considered at the following times:

• When the token retraces 40% to 60% from its ATH
• Trading volume remains at a high level
• Market discussions about the token continue to be active

Taking WIF as an example, the maximum retracement after ATH is approximately 59%. This strategy utilizes the volatility characteristics and market sentiment of Meme coins.

However, there are still risks involved. Meme coins rise sharply and fall sharply as well, so cautious operation is necessary, combined with other technical analysis and market research to make decisions.

02. Avoid trading on leverage, especially contracts

The reason is simple: getting liquidated will leave you with nothing. Coincidentally, today, Synthetix's former CFO, SynthaMan, revealed in a tweet that he lost all his SNX tokens due to being liquidated.

Furthermore, holding positions may lead to a happy ending, but funding rates are often overlooked costs. Lastly, contracts have a negative impact on emotions and psychology, further affecting trading operations.

03. Implement timely stop-loss, here are several stop-loss strategies

If a position falls below a key support level or no longer aligns with your investment logic, do not hesitate to sell to protect your capital.

Rather than risking significant losses, it is better to accept small losses. When the market conditions improve, you can re-enter the market. It is important to implement risk control when the market starts to decline, rather than waiting until the decline deepens before taking action.

Especially when trading highly volatile "junk coins," choosing the wrong timing and strategy often leads to severe losses, and may even result in total loss.

Specifically:

• Quick stop-loss: If the market shows unfavorable trends, take action quickly and accept small losses. For example, accepting a 5% loss is not terrifying.
• Set partial stop-loss points: Instead of liquidating the entire position at a specific price point, multiple price points can be set, with a certain percentage of the position being sold at each point. For example, if Bitcoin falls below $60,000, you can choose to sell 10% of the position.
• Flexibly seek entry points: If the market truly reverses, re-enter when the support level is reconfirmed. If the market continues to decline, re-enter at a lower price, obtaining a better entry price. Although this may incur some trading costs, it effectively controls risk.

In summary, accepting a 5% small loss to avoid a potential 50% major drop is a rather smart approach.

04. Bottom-fish in stages

Going all in on bottom-fishing may lead to regret, so it is advisable to combine technical and fundamental analysis, set several potential entry points, such as historical support levels or significant moving average positions.

When the price reaches these predetermined points, start buying in batches and gradually reduce the purchase amount in a "pyramid" fashion, while setting stop-loss points for each purchase to control risk. Adjust the strategy in a timely manner as the market changes.

05. Avoid excessive portfolio diversification

Concentrate investments in 10 (up to a maximum of 20) tokens that you approve of, rather than spreading the portfolio across too many tokens, making it easier to actively manage investments during market fluctuations.

The more types of tokens you trade, the greater the risk of suffering losses. Over-diversification will lower the overall performance of the investment portfolio, as it is difficult to effectively manage too many positions in a market downturn, especially avoiding holding too many positions in altcoins.

06. Hold a sufficient amount of stablecoins

Keep at least 20% of the investment portfolio in stablecoins, which can serve as "bullets" to seize opportunities during a downturn, without being forced to sell existing positions at an inappropriate time.

Even if the market rises, holding a certain proportion of stablecoins allows you to have sufficient liquidity to operate during a market downturn.

If you can't remember the above investment rules, just remember to protect your capital and survive first, as this is the most important thing!

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