Facing a sharp drop, here are six tips to help you “keep the green hills and always have firewood to burn”

"Be greedy when others are fearful", after what happened yesterday, is now the right time to enter the market? Here are 6 suggestions from an old leek:

• The formula for bottom fishing in this bull market: mainstream coins + mainstream memes

• Don’t touch the contract

• Stop loss in time, here are several stop-loss strategies

• Bottom fishing in steps

• Avoid excessive dispersion of positions

• Take enough stablecoins

The formula for bottom fishing in this bull market: mainstream coins + mainstream memes

When the market falls sharply or adjusts significantly, it usually brings the best opportunity to “over-bottom”, but it is recommended to bottom fish in batches and not all in. In addition, it is recommended to buy mainstream coins and mainstream memes at the bottom.

Meme coin bottom-fishing strategy: For those meme coins with large trading volume and continued popularity, they usually follow a relatively predictable pattern.

Whenever such tokens reach a new all-time high (ATH), their retracement is likely to be no more than 60%. This means that you can consider strategic buying at the following times:

• When the token has a 40% to 60% retracement from the ATH

• Trading volume remains at a high level

• The market's discussion of the token remains unabated

Take WIF as an example, the current maximum retracement after the ATH is about 59%. This strategy takes advantage of the volatility and market sentiment of MEME coins.

However, there are still risks. Meme rises sharply and falls sharply. It is necessary to operate with caution and make decisions in combination with other technical analysis and market research.

Don't touch leverage, especially contracts

The reason is simple. A liquidation will leave you with nothing. As it happens, today Synthetix's former chief financial officer SynthaMan revealed in a tweet that all SNX tokens have been lost due to liquidation.

Secondly, everyone is happy if the order can be carried through, but the funding rate is often a cost that is often overlooked. Finally, contracts have a negative impact on emotions and psychology, which further affects trading operations.

Stop loss in time, here are several stop loss strategies

If a position falls below key support levels or no longer fits your investment logic, don't be afraid to sell to protect your principal.

Instead of risking a big loss, it's better to accept a small loss. When market conditions improve, you can re-enter the market. It's important to control risk when the market starts to fall, rather than waiting until the decline deepens.

Especially when trading those volatile "junk coins", if you choose the wrong timing and strategy, you will often suffer heavy losses, or even zero.

Specifically:

• Quick stop loss: If the market moves unfavorably, take quick action and accept a small loss. For example, it is not terrible to accept a 5% loss.

• Set partial stop loss points: Instead of completely clearing all positions at a certain price point, you can set multiple price points and reduce a certain percentage of your position at each point. For example, if Bitcoin falls below $60,000, you can choose to sell 10% of your position.

• Flexibly find buying points: If the market really reverses, you can buy again when the support level is reconfirmed. If the market continues to fall, re-enter the market at a lower price to get a better buying price. Although this will incur some transaction costs, it can effectively control risks.

In short, it is a smarter approach to pay a small loss of 5% in exchange for protection from a possible 50% drop.

Bottom-fishing in steps

Going all in on bottom-fishing may make you slap your thighs. You can combine technical and fundamental analysis to set several possible entry points, such as historical support levels or important moving average positions.

When the price hits these preset points, start buying in batches and gradually reduce the purchase amount in a "pyramid" form. At the same time, set a stop loss point for each purchase to control the risk. Then adjust the strategy in time as the market changes.

Avoid over-dispersal of positions

Focus on 10 (no more than 20) tokens you recognize, rather than spreading your portfolio to too many tokens, so that it is easier to actively manage your investment when the market fluctuates.

The more types of tokens you trade, the greater the risk of loss. Over-diversification will reduce the overall performance of the portfolio, because it is difficult to effectively manage too many positions when the market falls sharply, especially not to hold too many altcoin positions.

Hold enough stablecoins

Keep at least 20% of the portfolio in stablecoins, which can be used as a "bullet" to seize opportunities when the market falls, and you don't have to be forced to sell existing positions at inappropriate times.

Even if the market rises, holding a certain proportion of stablecoins will allow you to have enough liquidity to operate when the market pulls back.

If you can't remember the above investment rules, remember to keep your principal and survive first, this is the most important thing!