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1. The acceleration theory of the market trend
"When the market is rising, it tends to keep rising. Conversely, when the market is falling, it tends to keep falling."
When we observe that prices are rising and reaching new highs, the market trend is likely to continue upward, and vice versa.
2. Take responsibility for your investment decisions
The key to long-term success in investing is to take full responsibility for your investment decisions, maintain independent thinking, and have a solid grasp of market knowledge and strategies.
3. We succeed because we invest according to principles
In the market, we cannot control all risks. Therefore, the key is to invest according to principles and diversify our capital.
You can allocate your capital based on the following categories:
- Category 1: Large, safe coins like BTC, ETH, BNB, etc. Allocate 40% of your capital to this category.
- Category 2: Mid-tier coins, market leaders, and trendsetters. Allocate 30% of your capital.
- Category 3: Higher-risk investments (potentially x30, x50). Allocate 30% or 20% of your capital.
Within these categories, further diversify your investments across different coins. Proper capital allocation and risk management are crucial.
4. Allocate capital to major coins as backup for your investment portfolio
If you do not invest in quality tokens or stocks, the risk will be higher. Always have a backup portfolio of safe investments to support your main investments.
5. Market trends are the deciding factor
You need to understand which phase the market is in. When should you adopt an offensive strategy? When should you adopt a defensive strategy? Use technical analysis, crowd psychology, fundamental analysis, and market trends to guide your decisions.
6. Follow in the footsteps of the giants
Giants always leave significant footprints in the market through technical analysis. Price charts reflect everything, and major players (whales) leave signals through technical analysis. Waves and trends originate from mid-term timeframes. Preparation and tracking whale activities are essential. Trends starting from the 1-day timeframe and above require preparation in terms of trend, money flow, and market direction.
7. Master your investment psychology
Even with excellent analysis, poor psychological control and strategy application can hinder success. Besides being skilled in analysis, controlling your mindset and maintaining discipline are crucial.
8. The market is always driven by certain trends
Observe the effect of marketing and traditional influences by major players. Identify which sectors are being marketed and which are receiving media attention. Without media effects, price-driven trends may be weaker.
Before analyzing models like 1W or 2W, check for active sectors.
9. Successful investors must accept losses
Both investing and trading involve probabilities, so we need to control the risk of each investment decision within acceptable limits.
Understand how much you will lose if a decision is wrong. Ensure it is within your asset's acceptable risk level and your psychological tolerance.
10. Consider exiting the market when a stock or coin peaks
When a stock or coin shows signs of weakening at its peak, consider analyzing the leading asset (BTC) using technical analysis for indications of a peak.
11. The crowd trades on emotions
The crowd often trades based on emotions and others' opinions. When they incur losses, they may become angry and blame others. To become a successful trader, try to avoid following the crowd. Equip yourself with knowledge to boost your confidence in financial markets.
12. Markets have phases of uptrends, downtrends, and sideways movements
An uptrend phase is driven by major players to create profit, while a downtrend phase represents their liquidation period. A sideways phase aims to frustrate and tire out the crowd, causing them to sell off and reset the market for a new cycle.
13. Good news doesn’t always lead to market gains
In addition to monitoring trends and fundamental analysis, always verify with technical analysis. "Whales always leave footprints in the market."
14. Bad news doesn’t always lead to market losses
This is the opposite of rule 13. Always verify with technical analysis. In corrective waves, the downtrend may weaken, and a rebound could occur.
15. Strong trends typically follow five wave patterns
Not all markets will follow Elliott's wave pattern. For example, during sideways movements, Elliott waves may not be applicable.
16. A true Uptrend Phase will last several months
When an uptrend is genuine, it lasts several months, not just 1-2 months. Identify accumulation areas, money flows, and marketing campaigns. Confirm with technical analysis across all timeframes and maintain confidence in the uptrend.
17. The greedy want to buy at the bottom and sell at the top
Experienced investors buy at safer levels, while the greedy seek to buy at the bottom and sell at the top. Carefully analyze and verify with technical analysis, focusing on safe entry points.
18. People always find reasons to justify market movements
When people search for reasons for market rises or falls, they often miss the root cause. News is a consequence, and the true driver is the money flow. Keep this in mind!
19. Consider selling when everyone believes in guaranteed gains
Think counter-cyclically. Train yourself to think contrary to the crowd. When the majority overemphasize one direction, prepare for the opposite scenario based on fundamental or technical analysis.
20. Uptrend Markets always have a capital allocation phase
This phase is when major players lock in profits. Legendary investor Jesse Livermore once said, "In financial markets, nothing is new. What happened in the past will continue to happen in the future because human nature and emotions do not change." Understanding these rules helps achieve success in financial markets.
We hope this article is useful for your investment journey. This is for informational purposes only and not investment advice.
Source: Alden Nguyen - Coin Trading Investment: https://www.youtube.com/watch?v=okaeMmZ8DOU&t=13s
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