Before entering the crypto world, you really need to understand these trading fundamentals; otherwise, it’s easy to fall into traps when analyzing virtual currencies.

First, you must know the biggest difference — the crypto market operates 24/7, all year round, with no holidays like May Day or National Day, and no weekend closures. Users are scattered worldwide, and market fluctuations at different times are completely different. That’s also why some say the crypto market is more exciting than the stock market, because there are no daily limit restrictions; prices can plummet to zero in a second or skyrocket in the next. This uncertainty runs throughout the entire trading process.

The trading thresholds are also much lower. Stocks require buying in lots of 100 shares, while in crypto, you can buy as little as 0.0001 BTC, so hundreds or thousands of dollars are enough to participate. Plus, it’s T+0 trading — you can buy whenever you want and sell whenever you want, with no restrictions.

Regarding how to place orders, there are two common methods. Limit orders specify a price for execution — for example, if BTC is at $6,500 and you think $6,300 is a good price, you place a buy order at $6,300. If the price drops to that level, the order may be filled. Market orders are executed immediately at the current market price — fast, but the price may not be what you expected. Which one to choose depends on your trading style and market judgment.

Then there’s the most common concept in crypto — bull and bear markets. A bull market is a generally optimistic, continuously rising trend, while a bear market is the opposite — pessimistic and continuously declining. When analyzing the market, judging whether the environment is bullish or bearish is especially important.

More critically, risk management is essential. You must learn to set take-profit and stop-loss points. Take-profit means selling once you reach a certain profit to lock in gains; stop-loss means cutting losses once the price drops to a certain level to prevent further losses. It sounds simple, but executing it is psychologically challenging — many people are trapped by hope and luck, resulting in deeper losses.

Being trapped or forced to recover from losses is also common. Being trapped means the price keeps falling after you buy, with unrealized losses exceeding your comfort zone; recovering means the price later rebounds, turning losses into profits. Missing out refers to the price rising without you buying in, or selling and not re-entering in time, watching gains slip away.

On the technical side, understanding overbought and oversold conditions is important. Overbought occurs when prices surge rapidly in a short period, with the Relative Strength Index (RSI) exceeding 75%, indicating a possible downward correction. Oversold is the opposite — RSI below 25%, suggesting a potential rebound. Simply put, it’s about whether the price has peaked or bottomed out.

Whales and main players often use tactics like “bullish price manipulation” (fake bullish signals to lure buyers) and “bearish price manipulation” (fake bearish signals to lure sellers). “bullish price manipulation” involves creating a false impression of rising prices to trick you into buying, only for prices to fall afterward; “bearish price manipulation” is the opposite — creating a false downtrend to trick you into selling, then prices rebound. When analyzing the crypto market, always stay alert to these traps.

Finally, cutting losses is painful but a necessary skill. Unrealized losses are just on paper, but once you actually sell at a loss, it becomes real. Many people find it hard to accept, but timely stop-loss can be the best way to protect yourself. These are the most common pitfalls in practice. To survive long in the crypto space, mastering these basic concepts thoroughly is essential.