Understand price fluctuations

The price of crypto assets will be affected by multiple factors such as market liquidity, macro environment, project progress, news, market sentiment and trading mechanisms. Rising prices do not equate to low risk, and past trends do not guarantee future performance; highly volatile assets may experience large profits and losses in a short period of time.

Checklist for this step

• Set the maximum loss you can tolerate first, rather than setting a profit target first.
• Do not use borrowing, living expenses, or emergency backup funds to purchase highly volatile assets.
• When you see "guaranteed profits", "guaranteed capital" and "insider information", it should be regarded as a high-risk signal.

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