Cryptocurrency Trading Philosophy Sharing

In cryptocurrency (crypto) trading, the core of trading philosophy is risk control and rational decision-making. Below, based on common experiences and lessons, I will share some key points to help everyone avoid common traps in trading. These principles are applicable to both beginners and veterans, emphasizing sustainable trading rather than chasing short-term quick riches.

First, always prioritize self-education and in-depth research. Before entering the crypto space, systematically learn the basics of blockchain technology, project whitepapers, and continuously monitor market dynamics. Blindly following trends often leads to losses. It is recommended to obtain information from authoritative and reliable sources, and avoid making hasty decisions based solely on hearsay.

Second, only invest funds you can afford to lose. The crypto market is extremely volatile, with prices capable of skyrocketing or plummeting in a short period. Never use essential living funds or borrowed money for trading. Adhere strictly to the principle of "playing with spare money," so that even if the market crashes, it won't affect your normal life.

Third, implement strict risk management. Before each trade, set stop-loss and take-profit points in advance. The risk per trade should ideally be controlled within 1%-2% of total capital. Avoid excessive leverage, as it amplifies the risk of losses; also, learn to diversify your holdings, such as holding different cryptocurrencies or asset types, to spread risk. Additionally, emotional trading, such as stubbornly holding onto losses, is a common mistake; be conscious to avoid it.

Fourth, choose secure trading platforms and asset custody methods. Prefer reputable, established exchanges, and enable security measures like 2FA. For asset storage, prioritize hardware wallets. Do not keep funds on exchange accounts for long periods, and always stay alert to regulatory changes and hacking risks.

Fifth, balance long-term perspective with short-term speculation. If planning to hold long-term, consider dollar-cost averaging (DCA) to smooth out market fluctuations through phased investments, which is relatively safer. For short-term trading, have a clear strategy, such as swing trading or breakout trading, but beware of market noise and FOMO (Fear Of Missing Out). Additionally, regulatory policy adjustments and geopolitical events can impact the overall market, so stay informed about relevant developments.

Sixth, beware of scams and psychological traps. The crypto space is rife with pump-and-dump schemes, fake projects, and various scams. Maintain rationality and avoid operations driven by greed, such as chasing highs or panic selling. Develop the habit of keeping a trading journal, regularly reflecting on mistakes, and continuously optimizing your trading strategies.

Of course, these principles are not foolproof formulas. The market is unpredictable and ever-changing. Always practice according to your risk tolerance and investment goals, and maintain a mindset of continuous learning to adapt to market changes.