Let’s take a look at my self-reflection after losing 1 million: I realized one thing, only one type of person can get rich from trading cryptocurrency!
One day in the cryptocurrency circle is equivalent to a year in the stock market. Those who engage in cryptocurrency trading will no longer have any interest in stock trading. The all-day trading and unlimited price fluctuations in cryptocurrency satisfy many people's dreams of getting rich overnight, which is one of the reasons why it is so popular. This also makes losses in the crypto circle a very normal phenomenon.
Every investor who enters the cryptocurrency market will experience significant losses, liquidations, and the transition from profits to losses. Among the army of cryptocurrency traders, only one type of person can get rich: those who have experienced bankruptcy and then summarize their experiences with a big mindset.
Unless you have experienced a margin call or significant losses, you will never know what it means to stop loss; unless you have experienced profits turning into losses, you will never understand the mindset shift from heaven to hell.
Survival is the first principle
Sun Tzu said: The good fighters of the past first made themselves invincible, and then waited for the enemy to become vulnerable. It’s very simple to avoid significant losses; when dangers arise that hinder this principle, abandon all other principles. Because no matter how many excellent performances you’ve had in the past, if you lose 100% now, you have nothing left.
Once your funds are eliminated, you are destined to be eliminated from the game. To excel in this game and achieve ultimate victory, all systems and rules must prioritize preserving the principal.
Correct capital management: Each success will only move you forward a small step, but one failure can set you back a large step. This large step hinders the accumulation of capital, which requires opportunities and time. Human nature is always like this: the pain of losing 1,000 yuan far exceeds the joy of gaining 1,000 yuan. A significant loss of capital can easily affect an investor's mindset. Losing 50% of 1 million becomes 500,000, while increasing 500,000 to 1 million requires a profit of 100%. It takes an hour to walk from the first floor of the Empire State Building to the top, but it only takes 30 seconds to jump from the roof back to the ground. You cannot control the direction of the market, so do not waste energy and emotions on things you cannot control. Do not worry about what changes the market will bring; worry about what strategies you will adopt in response to market changes. It doesn’t matter whether your judgments are right or wrong; what matters is how much profit you make when you are right and how much loss you can bear when you are wrong.
Every time I see many people in the crowd haggling over the price of a piece of clothing for half a day, or shopping for half a day, but investors only spend a few minutes thinking about their buying decisions—this is a common trait. This is not the behavior of someone who intends to make significant investments in the market. To earn big money in the market, investors must be cautious and protect their accounts as if walking on thin ice.
Have a clear operating system when entering the market:
(1) Prepare how much money to make in this wave of market.
(2) What is the maximum loss I can accept? If the market retraces, how much loss must I exit immediately?
(3) I must secure a portion of the profits from each operation.
(4) Gradually increase positions to avoid full position trading, continuously raise profit stop-loss levels as profits increase, and never let already earned profits turn into losses.
(5) Always give yourself another chance to trade and operate strictly according to your trading system.
Trends are the best friends.
The biggest enemies of trading are patiently waiting for clear market trends and overtrading. Bull markets do not end in a day, nor do bear markets. Trading in the crypto circle is a place where I have seen no transactions for three years, but when the transactions do start, they can last for three years. As long as you have the patience to wait for clear market trends to arrive, find the leading stocks, and hold them throughout the bull market without overtrading, you can achieve unexpected profits. When a trend arrives, respond and follow it. When there is no trend, observe and remain calm.
Overtrading is also a great enemy of investment. Those who trade on price differences can only make small gains but cannot make big money. Let’s calculate the transaction fees for overtrading: Current cryptocurrency exchanges generally charge 0.2% for buying and selling, completing a transaction incurs a fee of 0.4%. If a trader operates once a day for a year, the trader will lose 4/1000*365=140% in transaction fees. You didn't misread, that's 1.4 times; think about it, Buffett is still striving for 30% profit, while your annual trading fees amount to 140%. Another trader often overlooks this: the more frequently one enters and exits the market, the more easily one changes their mind. As the saying goes, the more you do, the more mistakes; the less you do, the fewer mistakes; doing nothing means no mistakes. Also, excessive trading may cause you to miss out on significant trends.
After making a plan, act according to the obvious price breakpoints, market sentiment, trading conditions, and capital inflows to determine the arrival of the trend. Maintain a broad perspective on market trends, and do not be misled by short-term fluctuations.
Mental quality is the core.
Trading itself violates human nature; it is a game where only a few can profit while the vast majority merely provide capital to play along. In trading, one needs solid mental qualities and a mindset capable of handling the universe of margin calls. If you enter the market with 10,000 yuan and your heart races over fluctuations of 100 yuan, I advise you to leave this market early, as it ensures your personal safety. If you have the mindset to earn 100 million, then fluctuations within 1 million will not affect your mentality, because what I ultimately want is 100 million; 1 million is not within my consideration. This way, you have a chance to gain substantial profits.
Trading is not only a game against major institutions, market makers, and retail investors, but also a battle against oneself. As the ancients said: fighting against heaven and earth brings joy, the highest realm of struggle is fighting against oneself. Trading is a constant psychological struggle where one repeatedly asks, 'Should I sell or hold at this price? What should I do?' This is a psychological game that requires solid mental quality. Additionally, maintaining good physical health is crucial because why do we live? We live simply to possess a healthy body and continually refine our souls in this world.
A trading approach suitable for oneself
The Dao represents the logic of things, while the Shu represents methods and techniques. As the saying goes: without the Dao, one can still seek the Shu; having the Shu without the Dao is useless. The emergence of a trading Dao represents the composition of a person's knowledge, vision, and courage. Through continuous ups and downs in the market, one ultimately grasps the basic logic of trading, which is in line with the rules.
The greatest enemies of investors are: hope, fear, and greed. Having your trading approach is not enough; you also need to overcome human weaknesses: hope, fear, and greed. When the market is about to decline, investors should feel fear, but they often still cling to hope. Conversely, when the market is rising and fears a pullback, they should be filled with hope but instead become fearful. This is the reason traders cannot make significant profits. Having your own trading approach and forming a trading system can help you overcome human weaknesses. When trends arrive, let profits run; when losses occur, let yourself stop-loss and exit. This is fundamental for anyone to gain great wealth.
Finally: Only this type of person makes money in the cryptocurrency market, it does not depend on the techniques and methods used, but on your self-discipline. Trading is sometimes not a battle of strategies but a contest of time and patience.
There is a very foolish method of trading cryptocurrency that can keep you 'always profitable', aiming for 30 million!
A new round of bull markets in cryptocurrency is about to unfold, and the goal of this round is to achieve true financial freedom.
Advice from a cryptocurrency big player after losing tens of millions: Eight things you must know.
1. Stay rational and avoid emotional trading
Suggestions
Control emotions: When the market fluctuates violently, stay calm and avoid making impulsive trading decisions due to fear or greed.
Make a plan: Develop clear investment strategies and plans, and strictly implement them without being disturbed by short-term fluctuations.
2. Continuous learning and research
Suggestions
In-depth learning: Continuously study blockchain and cryptocurrency-related knowledge, understand technical principles, market dynamics, and project backgrounds.
Follow authoritative information sources: Keep an eye on reputable cryptocurrency news websites, blogs, and social media accounts for the latest market insights.
3. Diversify investments to reduce risk.
Suggestions
Diversified investments: Do not invest all funds into one project; spread investments across multiple promising projects and asset classes.
Regular adjustments: Periodically assess and adjust the investment portfolio based on market changes and project developments.
4. Do good risk management.
Suggestions
Set stop-loss points: Set reasonable stop-loss points for each trade and exit in a timely manner to avoid expanding losses.
Control investment ratios: Avoid investing too much in high-risk projects, reasonably control investment ratios, and ensure fund safety.
5. Choose safe trading platforms and wallets
Suggestions
Choose reliable platforms: Select well-known, secure, and highly rated trading platforms for transactions.
Enhance security measures: Use hardware wallets to store assets, enable two-step verification and other security measures to protect your funds.
6. Focus on long-term value and avoid short-term speculation.
Suggestions
Long-term investment: Focus on projects with long-term development potential, develop long-term investment plans, and avoid frequent short-term speculation.
Be patient: For projects with potential, maintain patience and wait for their value to gradually realize.
7. Maintain a good mental attitude and a healthy lifestyle.
Suggestions
Balance life: Don't overly focus on market fluctuations; maintain a balance between work, life, and investment.
Proper relaxation: Engage in exercise, rest, and entertainment, maintain a good mental state, and avoid excessive anxiety and stress
8. Regularly review and summarize experiences and lessons learned.
Suggestions
Regularly summarize: Periodically review and summarize your investment experiences, analyze the reasons for success and failure, continuously optimize investment strategies, and learn from others’ experiences. Reflecting on my initial entry into the trading market, I sought all possible knowledge online in this area, hoping to learn everything as soon as possible so I could start real trading and make money.
When I first learned technical analysis, apart from understanding the basics of candlesticks, I started exploring from moving averages.
The concept of moving averages, while simple, has many applicable techniques and is a fundamental and important tool in stock market technical analysis. This article will explore what moving averages are, how to view them, and common applications, hoping to give explorers a basic understanding of moving averages.
What is a Moving Average (MA)?
Moving Average (MA) is a commonly used indicator in technical analysis, composed of the average closing prices over a certain period.
For example, 5MA means a line formed by the average closing price over the past 5 days. The calculation method is to add the closing prices of the past 5 days and divide by 5 (the number of days). The smaller the number before MA, the shorter the moving average period.
Moving averages are composed of individual price facts, but how to interpret them is greatly influenced by human factors. For instance, some people believe that moving averages represent the average holding cost of positions entered during that period.
In my experience, shorter-period moving averages can indicate price trends earlier, but due to their short cycle, they are also very sensitive to price changes, resulting in lower accuracy compared to longer-period moving averages.
In contrast, long-term moving averages are not as responsive to price changes as short-term moving averages, and trends may have already developed for some time before the long-term moving averages reflect them. However, they are not as sensitive to price fluctuations, so their trend is smoother and has a higher accuracy. Utilizing the relative relationship between short, medium, and long-term moving averages can also help predict price trends and further analyze price movements.
For example, common terms like golden cross, death cross, breaking above or below moving averages are all extensions of the moving average concept. However, simply using moving averages to predict market trends is prone to errors, so they are typically analyzed alongside volume and other indicators.
That's all for today. During a bull market, many people hope to communicate. If you really can't handle cryptocurrency trading on your own, don’t force yourself. Early on, seek a mentor, understand the latest information, plan, embrace the bull market, improve your win rate, and say goodbye to being trapped at high positions.