It is well known that trading markets go through cyclical phases of price fluctuations, rising and falling, and then rising again, and so on. This is a fundamental rule that everyone should understand well. Understanding how the price wheel turns from the descending bear market to the ascending bull market is crucial.
It is essential to understand the mechanism of liquidity withdrawal from some markets and its injection into others, as well as how markets are affected by interest rate hikes and monetary tightening, leading to the rise of the dollar and the yield on treasury bonds at the expense of other markets.
If we understand and grasp these monetary and financial policies, we will know when price cycles end and when they begin in all markets. Thanks to fundamental market analysis, we will know when the bull market starts and when the bear market begins.
This is a Must-Take-Into-Consideration Set of Trading Rules:”
1.The first piece of advice is to invest a little in yourself and learn new skills from trading experts, especially those who work with reputable platforms or websites known for their credibility. Even if you have to pay some money, it will return to you with valuable trading skills and strategies.
2.Don’t chase green candles, and don’t buy after sudden currency spikes. Green candles are selling zones, and red candles are buying zones. It’s important to buy at bottoms and sell at peaks. It’s good to enter after a correction and at a support level. If clear accumulation is present, it’s even better and more secure.
3.Rely on fundamental analysis in your analysis. It is the fundamental driver of the market, while technical analysis is a subset of fundamental analysis. As this article illustrates, fundamental analysis is the horse, and technical analysis is the carriage. Fundamental analysis involves tracking currency news, its credibility, and statements from countries and central bank managers regarding digital currencies.
4. Technical analysis involves analyzing Japanese candlesticks, support and resistance zones, and overbought or oversold conditions, often using specific price or volume indicators. However, the cryptocurrency market remains one of the most challenging to understand due to the significant influence of responsible and irresponsible statements by some participants and major whales on the overall direction of the digital currency market.
5.Your emotions and excitement should never lead you to bet on a single cryptocurrency under any circumstances. It’s always better to invest in several digital currencies. Diversifying your assets across multiple places safeguards you against significant losses if one currency’s market experiences a downturn. This is a fundamental principle: don’t put all your eggs in one basket. Among the key points for risk management, there are two main aspects.
6.The first is investing in more than one digital currency, but this choice should be thoughtful. Don’t invest in any currency that appears promising, with its team promising continuous success in the financial world and other dazzling promises that often fail to meet reality, especially if it lacks a real-world project. If you’re invested in just one currency, it could collapse, and all your money could be lost, as happened during the year 2022 when Luna, one of the strongest digital currencies, collapsed, followed by the collapse of the FTX platform.
7.Don’t go against the overall trend. Don’t go against the trend, no matter how tempting the incentives may be. Don’t go against the general trend. If the price is in a downtrend channel, it doesn’t make sense to enter with a purchase. Price channels are observed on daily and four-hour charts, taking into account correction processes.
8.Stay away from greed. Don’t be greedy. Sometimes, you achieve a profit percentage of up to 20%, and you think the currency is still rising, but the opposite happens, and the loss becomes 20% or even more. So, you should be content and avoid greed.
9.Trade with amounts you can afford to lose. You should not risk more than you can afford to lose. It’s unreasonable to trade in the digital currency market known for its significant crashes and fluctuations that can wipe out large sums of money. It’s a high-risk, high-volatility market.”
10.Do not enter random trades or trade on unreliable platforms. Your financial management may be correct, and your analysis of the currency may be good, but the failure of the currency due to the absence of any project for it or insufficient volume will lead to your loss, as the currency dies and gets delisted from trading platforms.
11.Do you have a strategy for trading cryptocurrencies? If you don’t have a specific strategy for trading digital currencies, you will continue to trade haphazardly. Before venturing into the world of cryptocurrencies, investors should pay close attention. This type of investment requires individual-level studies, platform-level studies, and market-level studies. Therefore, look for a strategy for yourself and stick to it.
Here, we have shared with you the most important lessons, insights, and trading rules, and we wish everyone success.”