Mr. Coin in the Crypto Circle: The market has strong fluctuations in the short term. How should we operate? Here are a few points to note:
Recently, the crypto market has once again experienced a strong crash. It hasn't been long since the last downturn, but compared to the recent decline, it is clear that the downward trend is not over yet. Taking Bitcoin as an example, it recently fell below 90,000, approaching the 85,000 mark, and once again experienced a drop of over 10,000 points. It has only just passed the halfway mark, and the price has already retreated by more than 20,000 points from its peak. As of now, the 24-hour decline is nearly 25%, which is quite terrifying. Complaining and self-deception are of no use. In fact, every crash is a good opportunity for every trader to learn and improve themselves. Lin Qi once said: "Profitable trades will not help you grow; they will only hold you back. You must gain experience from failures and mistakes. Experience must be bought with money, which is why we say experience is expensive."
Now let's talk about how to operate in the face of such extreme market conditions.
First: Position Control
When entering a trade, do not go all in or all out. Be moderate and avoid greed and fear, effectively controlling risk while managing your position. It is recommended to keep your position at around 5-10%. This way, even if the market changes, you can add to your position or cut losses to prevent larger losses, ensuring the safety of your principal. In such volatile markets, a reasonable stop-loss exit is essential to timely reduce your losses, and this is something a mature investor must learn. Once the price reaches your expected level, you must act decisively, sell to stop losses, and protect your principal as much as possible. If you reach a selling point that is close to your expected level, it is advisable not to be greedy or anxious, but to secure your profits steadily. After all, as long as the green mountains remain, there is no fear of not having firewood to burn.
Second: Do Not Overreach
Taking Bitcoin as an example again: In a one-sided downward trend like yesterday's, the price keeps breaking down. Although there may be some rebounds, they are insignificant compared to the intraday decline, and the recent downward trend has not changed. The market continues to maintain a downward posture, and it is clear that the short-term trend is to continue downward. I have repeatedly reminded that the downward trend has not dissipated, so be cautious of falling prices. In such a situation, just follow the trend and short the market. If there is a break, chase the short position in a timely manner. A conservative approach would be to look for a profit of 500-1000 points and then exit. In such a significant decline, just manage your stop-loss and short the market; do not think about bottom fishing, as you may not even know where the bottom is. Trying to catch huge profits after a rebound often does not go as planned. Also, remember not to hold onto losing positions; manage your stop-loss to control risk. You may withstand risks during smaller market fluctuations, but if you stubbornly resist, you will ultimately face the fate of being forced to stop-loss. Mr. Coin suggests maintaining good habits of managing stop-losses and take-profits regularly to avoid worrying about your position when a major market event occurs.
Third: Do Not Fight Unwinnable Battles
When you feel that the market trend is unclear and you lack confidence, it is better to stay out. If you feel uncertain, it is better to do nothing and patiently wait for the right time to enter the market. If you have already opened a position and feel that it is neither enjoyable nor worth abandoning, it is better to exit at break-even. Do not overly focus on profits and losses, risking without certainty. If trading is not going well, take a break. No one can consistently judge market trends correctly; it is normal to make one or two mistakes. However, if you keep making mistakes, it may indicate that you have lost your grip on the market. Mr. Coin suggests that taking a break is the best choice at this time.
Fourth: Maintain a Good Mindset
In a series of rapid declines, investors can easily develop a negative mindset, which can affect their subsequent operations and lead to investment mistakes. These need to be overcome. In the face of continuous declines, panicking will not help; instead, it may lead to blind actions that exacerbate losses. Investors with heavy positions will incur larger losses in a down market. If they resort to cost-ignorant selling, it will not quickly turn losses into profits but will instead trap them in a vicious cycle of continuous mistakes. Investment cannot be a series of victories; occasional mistakes are normal. Investors should recognize and correct their errors in unfavorable situations. Do not stubbornly go against the market; otherwise, small mistakes can turn into large losses.
Fifth: Do Not Go All In
In crypto trading, one should act within their means and not go all in, betting all their life savings like a gamble. This is an extremely irrational behavior, hoping to get rich overnight. Often, this ignores the risks and opportunities of the market. A wise approach is to first invest 10% of the total amount, and when the market is clear and favorable, increase the investment, similar to a pyramid structure.
With this wave of breakdowns, if the market cannot stabilize above the 90,000 line for a long time, the downside space will be further opened. Currently, the rebound strength is weak, so the idea of shorting on rebounds remains unchanged, but it is advisable to control risks reasonably. If there are any unclear points or if you are still in a losing situation, you can consult me. Whether it is accumulating profits during fluctuations or expanding profits in long and short positions, Mr. Coin will provide you with comprehensive analysis and guidance.
Mr. Coin's WeChat Official Account: Mr. Coin in the Crypto Circle
For more real-time trades daily, you can follow my official account. You can learn technical analysis online, exit positions, etc. I have studied the market for many years, focusing on the major trends in the crypto circle, and have studied extensively in the U.S. to provide main analysis and guidance on BTC, ETH, DOT, LTC, FIL, EOS, BCH, ETC, and other coins. For those who are unsure how to operate, you are welcome to study and learn together.
This article is exclusively shared by Mr. Coin in the Crypto Circle and represents his unique views. There may be delays in sending the article, and risks are borne by the reader. Manage your positions reasonably and avoid heavy or full positions. Mr. Coin wishes all fans to achieve financial freedom, to move forward together, and to work hard. In the depths of time, hold onto understanding. In investment, one must learn to be optimistic. Do not let your future self dislike your present self. We live authentically, but not every data revelation needs to be taken too seriously. Let the past be the past, and let the future come quickly! Take good care of yourself, sharpen your skills, and be ready to set off at any time. Let's go!
—— This article is written by Mr. Coin in the Crypto Circle, refusing plagiarism and respecting originality!
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