My attitude has always been -
It's not that I want to write an article, but in the process of constantly doing things and chatting with friends, I suddenly have the urge to express myself. At this moment, I want to make something clear. I can't help but say it out. I don't want to rack my brains to write an article just for the sake of writing an article.
Don’t worry about what Lao Xu is talking about today, just remember the following two points:
1. It is easy to lose everything if you just place orders based on the news. Only by grasping the general direction and the underlying rules can you keep a safe position.
The closer you are to money, the more gossip there is and the more magical the news is.
In the past few days, the official account X of the U.S. Securities and Exchange Commission released information one day in advance that the slug spot ETF was approved, which was later denied by Gary Gensler, who said that the account was hacked. A day later, he officially announced that the spot ETF was approved.
During this period, the slug stabbed needles up and down, showing the high-leverage players a scene of what is called the unbelievable reality of the world.
Even TV dramas are not so absurd, but it actually happened in the crypto circle.
2. Prices always move in the direction of least resistance, and the direction of least resistance is the low-cost profit direction for strong funds.
This means that the rise and fall of the market is always contrary to the views of most investors, especially the real-time market trends.
The approval of spot ETFs is indeed an epic positive, and it is a significant contribution to the history of human finance and even the history of human civilization.
The passage of spot ETFs is not a grace from traditional forces to emerging forces, but a compromise of traditional forces. It is a great victory.
From a medium- to long-term perspective, coupled with the arrival of a liquidity easing cycle, this major positive factor has laid the foundation for the arrival of a bull market that will end in a huge surge no matter how the news changes in the future.
But don't rush into it.
You thought the approval of spot ETFs was a huge positive, so you sold your house and went all in to go long with leverage, and even dreamed of rolling your positions. However, it only hit 2,000 points before it came back, and the market even went diagonally downward.
Most of the time, the leeks are just fuel for the powerful capital to kill and take life and death.
If you open a long position, strong funds will hit your stop loss or even hit you with a blowout, and the leeks will be forced to sell and close their positions, thus pushing the price down, and the "banker" will make a lot of money;
If you open a short position, strong funds will stop you from losing money or even force you to sell, forcing the leeks to buy to cover their short positions, thus pushing up the price and allowing the “banker” to make a lot of money.
The stronger the consensus among leeks, the more dangerous the place is, because it is a pile of pure fat meat and a liquidity pool that strong funds love to invest in.
Figure: 2020 March 12 crash
Therefore, decisions that result in big gains are often counterintuitive and even make people feel uncertain and painful at the time, such as buying when everything is dead silent or when the market is plummeting like a tsunami.
It feels great to chase high prices, and it makes people fantasize but they often end up stuck on the top of the mountain.
If you carefully think about what I said above, you will be able to understand the incredible rise and fall in the crypto circle.
Let me remind you again that, in general, you should be careful when handling contracts.
To some extent, the bull market itself comes with leverage.
Subscribe to this account to get continuous updates in this series. This article was first published on 2024-01-12.
