The cryptocurrency market is really attracting a lot of attention from investors worldwide. But the challenge is the extreme volatility, and the potential risks are quite high. Therefore, to succeed, you need a clear trading strategy. I will share 6 points based on experience that help traders reduce risks while maximizing profits.

First is diversification of your portfolio. I'm sure everyone has heard the saying "don’t put all your eggs in one basket." In today’s market, concentrating all your capital into a single coin is extremely dangerous. Different coins have varying liquidity, intrinsic value, and community trust, so they also fluctuate in different directions. For example, BTC is currently at $69.18K with a 2.96% increase in 24h, but it remains one of the most volatile coins. Therefore, diversification is essential. Usually, investors choose high market cap coins with strong intrinsic value and relatively stable price movements.

Second, pay attention to the 24-hour change percentage of a coin. This indicator shows how much the coin’s price has changed compared to 24 hours ago. Based on experience, a change of about 1-3% is ideal. Why? If within 24h the increase is less than 1%, the upward trend is not clear, and the reversal chance is 50/50. Conversely, if it has increased more than 3%, it might be too late to buy, because after sharp rises, a correction often follows. For example, ETH is currently up 3.00% in 24h, so careful consideration is needed before making a decision. This point is easy to understand and applicable to everyone, especially useful for short-term traders.

Third, use CoinMarketCap as a support tool. If you enjoy tracking data or are mainly interested in short-term trading without much concern for intrinsic value, CoinMarketCap is a very good website. There, you can find most listed coins, from major ones like BTC, ETH to smaller new coins. It also provides information on market cap, circulating volume, supply, and other metrics.

Fourth, learn from reputable investment forums. If you are new to this field and don’t fully understand the market, join communities with experienced investors. See what they discuss about today’s market and apply it to your situation. However, experts often have differing opinions, so you need to be wise in defining your goals and trading style to make appropriate decisions. TradingView is a pretty good forum within the crypto community, where you can find many ideas from different schools of thought. In Vietnam, TraderViet is also a good place to learn. Additionally, following your favorite investors is an effective way to "hack" experience.

Fifth, focus on coins you truly understand. Although diversification is good, having too many coins is not necessarily better. According to modern portfolio theory, once the number of coins exceeds a certain point, risks no longer decrease. So, instead of monitoring hundreds of coins, choose a few that you understand deeply, know their trends, and have reliable information about. A small tip is to select coins with contrasting characteristics or trends to better cover the market.

Finally, stay away from "trash" coins. Trash coins are those with no real intrinsic value or very low value, usually ranked at the bottom of the list. Notably, these coins often shoot up to the top 40 or even top 10 due to aggressive marketing, but that’s just a bubble phenomenon and can burst at any time. While you might profit from them, it requires a lot of experience to identify the right timing. When you notice such phenomena, carefully consider the fundamentals, intrinsic value, and sustainability before making a decision.

With these strategies, you can build a safer and more effective trading plan in the crypto market. The key is patience, continuous learning, and always managing risks well.