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After years of struggling in the Crypto Assets market, the most profound realization is that the real challenge lies not in predicting the direction of the market, but in how to avoid blind operations and neglecting stop loss.
Many investors fall into a repetitive cycle: they rush in as soon as they see prices rise, fearing they might miss the opportunity to get rich; when the market corrects, they cling to a wishful thinking mindset, unwilling to accept losses, resulting in deeper losses. Ultimately, panic selling ensues, and they hurriedly chase the next hot trend, leading to a continuous shrinkage of their account balances.
The main sources of losses are twofold:
1. Overly frequent trading: It may seem like seizing every opportunity on the surface, but in reality, it becomes the main source of transaction fees for exchanges. Frequently switching investment targets not only increases risk but also makes it easier to lose direction amid market fluctuations.
2. No stop loss: Holding onto a wishful thinking mentality expecting the market to reverse is equivalent to risking your principal. A significant pullback could wipe out all profits and even erode the principal.
A wise trading strategy should be: first ensure that you are not eliminated by the market, and then talk about profits.
Setting a stop loss does not mean giving up, but rather adds a layer of protection to your trades. It's like wearing a seatbelt while driving; it may seem unnecessary, but it could save your life in critical moments. Before each trade, you should ask yourself what the maximum loss you can bear is and strictly adhere to your stop loss strategy.
At the same time, learn to patiently wait. Market opportunities always exist, but they do not come every day. The market has its cycles—buy when it's suitable to build positions, wait when it's suitable to observe, and decisively sell when it's suitable to exit. Rather than blindly chasing prices up and down, it's better to calm down and wait for the real opportunities.
Remember, the essence of trading is risk management, not the pursuit of excessive profits. For every impulsive chase of a rise you avoid, you reduce the risk of being trapped; for every timely stop loss you implement, you increase your chances of preserving your capital.
Only by preserving the principal can one survive in the market in the long run, waiting for the moment of true profit to arrive. On the road of investing in Crypto Assets, only by acting cautiously can one laugh last.