Sharing More Trading Concepts in the Crypto Space

Last time, I discussed six fundamental trading principles in the crypto world. This time, I’ll add some advanced and practical considerations to help you better navigate the complex changes in the crypto market. These insights are also based on market experience and common lessons learned, with a core emphasis on rational trading and long-term sustainability.

7. Understand Market Cycles and the Impact of Macro Environment. The crypto market is never isolated; global economic trends, policy adjustments, major geopolitical events (such as Federal Reserve interest rate changes) directly influence market sentiment. During bull markets, people are prone to FOMO (Fear of Missing Out), blindly chasing highs, while in bear markets, panic often leads to selling at low prices. It’s recommended to learn how to identify market cycle patterns, such as the impact of Bitcoin halving events, and to use auxiliary indicators like the Fear and Greed Index. Be clear: short-term fluctuations are often driven by breaking news, but long-term trends ultimately depend on industry fundamentals.

8. Establish Tax and Compliance Awareness. Different countries have clear tax regulations for cryptocurrencies, such as capital gains tax rules. Keep detailed records of every transaction to avoid future tax disputes; choose compliant trading platforms and strictly adhere to anti-money laundering regulations. Ignoring this can lead to unexpected losses during withdrawals or compliance audits.

9. Learn to Manage Community Participation and Information Sources. Join reputable industry communities, such as Reddit’s r/cryptocurrency or specialized Discord groups, but beware of “sales pitch” brainwashing behaviors. Cross-verify information from multiple sources; don’t be misled by the opinions of a single KOL (Key Opinion Leader). Use professional tools like CoinMarketCap and TradingView for market data analysis instead of blindly trusting one-sided social media comments.

10. Value Psychological Management and Trading Journals. The biggest enemy in trading is often your own emotions. Set clear rules, such as “review trades weekly,” and record the reasons behind each decision and the final outcome for reflection. Meditation or other methods can help stabilize emotions; setting fixed trading times can prevent impulsive trades during late-night hours when clarity is low. Remember: most losses are caused not by the market itself but by greed or fear clouding judgment.

11. Be Cautious with Leverage and Derivatives Trading. Futures, options, and other derivatives can amplify gains, but risks are also magnified. Beginners should start with spot trading; if attempting leverage, keep multiples below 5x. Understand liquidation mechanisms beforehand to avoid forced liquidations due to over-leverage.

12. Plan Exit Strategies in Advance. Trading isn’t just about entry points; knowing when to exit is equally important. Set goals in advance, such as selling part of your position when profits double, or using trailing stops to lock in gains. Long-term holders can consider staking or DeFi products for passive income, but must thoroughly assess the risks involved before participating.

There are no shortcuts in crypto trading; these principles require continuous adjustment and optimization through practice. Maintain a mindset of ongoing learning, as the market will always present new variables. If you want to explore specific strategies or areas in depth, feel free to ask and discuss!