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In the Crypto Assets market, it is crucial to develop wise investment strategies. Here are a few trading principles worth referencing:
First, investors should focus on strong coins and assets that are on an upward trend. It is not advisable to invest too much energy in coins that have been in a long-term downtrend. If a coin consistently stays above the trend line, it may be worth considering holding onto it patiently. For example, coins related to artificial intelligence performed well at the beginning of this year; as long as they do not fall below the 30-day moving average, they can continue to be held.
Secondly, pay attention to the overall market trends and the main trend. When the market is performing well, a clear main direction usually emerges. If the main trend is weak or hard to identify, it indicates that the current market risk is high, and one should patiently wait for a better opportunity.
Furthermore, diversified investment is an effective way to reduce risk. Even if you are very optimistic about a certain coin, you should not invest all your funds in it. It is recommended to hold no more than four different coins at the same time to spread the risk.
In addition, avoid frequent trading. Excessive trading may bring a temporary sense of excitement but often leads to unnecessary losses. Unless you possess extremely high trading skills or have insider information, short-term trading is not recommended.
Mindset management is equally important. Whether experiencing significant losses or obtaining considerable gains, one should take appropriate breaks to adjust. After substantial losses, it is easy to develop a retaliatory mindset, while after making a big profit, one might overlook risks due to overconfidence. Both situations require caution.
Finally, even if you are very optimistic about a certain coin, you should adopt a strategy of buying in batches. Because market changes are difficult to predict, buying in batches can effectively reduce risks.
Following these principles helps to better seize opportunities and avoid risks in the highly volatile Crypto Assets market.