⛔⛔⛔ Regarding controlling retracement, I talked about it with a big guy in the cryptocurrency circle, and he gave me the following series.
You may have some impression of this series:
1, 1.5, 2, 4, 6, 4, 3, 5, 7, 9.8, 7, 5, 9, 5, 4, 6, 9.5, 5, 0.
He said that this is a portrayal of his early trading. Many traders in the market, because they love to use leverage, can quickly earn five or even ten times the initial capital as long as they are a little luckier and bolder. But this process may experience several blow-ups, but as long as they succeed once, it is enough. However, success really depends on luck.
But he found that many people, including himself, began to retrace significantly after making a lot of money. Later he summarized three reasons:
1. Mistaking chance for inevitability. The success rate of making money with high leverage is actually not high, maybe only 10%. Many people feel that they can succeed every time after achieving 10 times of return, but in the end they often have a big drawdown at 12 or 13 times. This is not because the drawdown cannot be controlled, but because high leverage itself is prone to problems. It took me three years to switch from high leverage to low leverage. For example, the operation of Bitcoin does not exceed 5 times, and the altcoin is even lower.
2. The goal is too obsessed. Are you always concerned about certain integer thresholds, and then often have a big drawdown there? I have encountered this many times. This is actually too much obsession, always thinking "I must make so much money on this order", but the market is impermanent, how can there be a fixed income? The solution is to be calm, each transaction is independent, and don't be affected by the last transaction. This is easy to say, but it is really difficult to do.
3. Be bold when the funds are small, and be timid when the funds are large. Many people asked me: "I made N from 1, but how can I keep this money and make 2N without a drawdown?" In fact, if you have overcome high leverage and obsession, and still have this problem, it may be that you are not courageous enough.
