Although the market has been volatile recently, people tend to think that it is still a bull market, and the bull market will continue for several months. Since the bull market continues to be generally recognized, how to make small currency investments in the bull market?
Basic characteristics of small currencies
Different people have different classification methods. The mainstream currency can be the top ten currency by market value or the top 20 currency. The currencies after 20 can be collectively referred to as "small currencies". The characteristics are summarized as follows:
1. Large fluctuations. The mainstream currency fluctuates by 5 points, and the small currency fluctuates by more than 10 points;
2. Poor depth. The trading depth of small currencies is generally poor, such as Rari and Whale in the NFT field. Even if they are well-known in this field, the trading depth is still not good. The opening of a position of tens of thousands of dollars can cause a lot of fluctuations in the price of the currency.
3. The consensus is low, and the number of participants is small.
4. Even if the small currency has the potential to increase its market value in the future, it is still a period when the value judgment is not clear enough, which leads to a further increase in risk.
5. The research methods of small currencies are different from mainstream currencies. The difficulty of research has also been further increased.
6. If you can see the small currency correctly, there are ways to get greater benefits than the mainstream currency.
Position allocation method
Understand the characteristics of small currencies, and respond to these characteristics.
The amount of small currency investment should not exceed 20% of the total investment in crypto assets, preferably 10%. If personal capital is strong, the share of small currencies should be even lower.
According to the level of personal analysis and research, the higher the level, the fewer currencies. There are generally no more than 10 targets at the same time, and no more than 5 for masters. The reason for multiple occurrences is not because so many are worth it, but to spread the risk.
The following is an example of the configuration of 10 target small coins:
First of all, the small currency fund is, for example, 100,000 dollar. Divide it into 10 parts, and one 10,000 dollar corresponds to one currency. Then divide the 10,000 dollar into ten parts again, and one part is 1,000 dollar. Place orders separately at different points. Pending orders can be averaged, and the lower the price, the greater the amount of the pending order, and the cost has been diluted. The current price can enter a part of the position, and more often, 30-50% of the continuous pending order, waiting for market fluctuations to eat into the bargaining chip. Because the small currency fluctuates greatly, don't worry too much about not having a bargaining chip. Basically, it doesn't take a month or even a week that your pending order can eat up 60-80% of the market. At this time, you can cancel the pending order and deposit directly, or you can continue the pending order.
After earning 30-50%, or doubling, you need to get back the principal, even if you firmly believe that this value space is still large. A small code loophole may cause the collapse of the price of a currency. If you think there is room, try to take out the profit and wait instead of holding the principal to continue fighting. When investing, principal safety comes first.
The choice of currency is based on a relatively well-known currency in its field, with good investor participation and technical background, such as the leading CFX in the domestic public chain mentioned before, and the rari, flow, waxp in the NFT field and Curve (crv) in the DEX field, and so on. These currencies have seen significant gains in the recent one or two months, and the risk factor has become relatively high. When deciding to invest, you need to follow the position allocation rules, slowly attract funds, and try to abandon leveraged products, because market fluctuations will continue in the near future, and problems are prone to occur and you can’t hold your chips.
to sum up
There are a lot of opportunities for small coins in the bull market, but the psychological preparation must be sufficient before starting. You need to stick to the fancy target and don't invest in disorder. Be calm when fluctuating, be cautious when choosing, and implement forcefully after making a decision. There are no special cheating methods, only strict discipline and long-term execution.