The virtual currency + bubble has confused countless people, leading them to invest without hesitation. Some even choose to quit their jobs and invest all their...
Families have invested in the炒币 wave, and then recorded their炒币 diaries online.
It can be certain that those who start participating in炒币 are usually easier to profit, and this quick earning feeling makes it hard to stop, further...
Stimulated their greed, hoping to earn more wealth. However, even if the virtual currency bubble does not burst, speculators also face...
A great risk of loss. Now, let's look at the six most common 'ways to die' for炒币者!
The first type: death from counter-market bottom fishing
The sharp decline in virtual currency prices often becomes a touchstone for炒币者's greedy mentality. Some炒币者 are excited to see the market drop, eager...
Unbearably choosing to bottom fish against the trend, yet they never thought that the so-called bottom is not the endpoint, but a bottomless pit.
This pit may hide more uncertainties and risks, like an abyss; once fallen in, bottom fishers may...
Falling into an endless predicament, buying again and again, getting stuck repeatedly.
It can be said that counter-market bottom fishing is one of the main reasons for losses among many炒币者. In a clear downward trend, some炒币者 incorrectly...
They mistakenly believe that the virtual currency price has dropped to a level that attracts new speculators, and thus should experience a rebound.
However, the actual situation is often that the more they bottom fish, the more they lose, until they can no longer bear it, not only wiping out the previously earned profits but also losing the principal.
Can be completely worn out.
Taking the volatility of Bitcoin in 2013 as an example, it soared from tens of dollars to about $1000, then plummeted to over $100. This roller coaster...
The systematic market has bankrupted countless炒币者.
The strategy of bottom fishing can only succeed in a fluctuating or upward market, and at other times, such behavior is usually...
A shortcut to a dead end. This is what we often say about the importance of trend-following; correct trend-following can lead to multiple successes in oscillation.
Even if counter-market operations are correct countless times, making a mistake once may lead to irreversible losses.
The second type: death from leveraging +
In the virtual currency bubble,
Some炒币者 have tasted the sweetness and desire to increase investment for more profit. However, due to a lack of...
With excess funds, they begin to consider borrowing or financing for炒币, thereby increasing leverage.
Currently, the common leverage ratio + is 5 to 10 times, which means炒币者 can borrow more funds for investment with limited capital. For example, with a 5...
Taking 5 times leverage as an example, if the principal is 300,000 yuan,炒币者 can borrow 1.2 million yuan and then buy virtual currencies with a full position.
Whether the virtual currency price rises or falls will magnify profits or losses by 5 times. Specifically, if the virtual currency price rises...
If it's 10%, then the profit for炒币者 is 50%; conversely, losses will also be magnified by 5 times. This means that as long as炒币者's losses reach the original amount.
If the loss reaches 20% of the capital, liquidation will occur, and both the principal and borrowed funds will be wiped out.
Generally,炒币者 do not start with high leverage, but begin with a lower leverage ratio. However, time and again they earn...
The money will lead them to gradually relax their vigilance against risks, blindly believing that virtual currency will only rise and not fall, ultimately resulting in total loss.
In comparison, from 2017 to 2018, Bitcoin kept breaking significant price thresholds, reaching a peak of $18,000, and many people during this...
In the process, leverage ratio + was increased, hoping Bitcoin's price would further rise to $30,000.
However, Bitcoin eventually fell from $18,000 to about $10,000, and炒币者 using leverage faced painful losses...
Loss. In short, this behavior is seeing some炒币者 become rich overnight, then chasing short-term profits, resulting in betting wrong direction.
The third type: death from K-line charts
Virtual currency trading uses K-line charts; although this knowledge comes from the stock and futures markets, the K-line charts of virtual currency cannot completely...
Applying experiences from the stock and futures markets. Due to various uncertainties, relying solely on charts for炒币 may lead to severe losses.
For example, in 2013 and 2017, the Chinese government cracked down on virtual currencies, causing prices to plummet: in 2017...
The South Korean government also took action to suppress virtual currency, which similarly triggered a sharp decline in prices.
In short, virtual currency cannot obtain formal recognition from the central banks of various countries, and lacking legal status makes it vulnerable to various policy impacts.
Impacts cannot be predicted in advance through K-line charts, making it difficult to avoid risks. In addition, there are also坐庄+ and...
Manipulating prices and other illegal activities.
In the formal stock and futures markets,
Such behavior is explicitly prohibited and regulated. However, virtual currency trading is in a...
In a barbaric era, various demons run rampant.
The role of K-line charts in this environment is relatively small and may even be used by demons to lure...
A tool for炒币者.
The fourth type: death from chasing rise and killing fall +
Due to the instability of K-line charts and the lack of more reliable buying and selling methods, the vast majority of炒币者 tend to adopt a chasing rise and killing fall strategy.
Strategy. It is well known that chasing rise and killing fall may yield substantial profits in the short term, but in the long run, the probability of losses is greater.
In the stock market, the probability of long-term profitability is about 10%, which includes some value investors. In the futures market, the probability of long-term profitability drops to 1%. In comparison,炒虚拟货币 is even more difficult. Although many炒币者 currently claim to have achieved certain profits...
However, whether the profits made can cover these fees is a prevalent issue. Most炒币者 may ultimately...
Loss.
Additionally, although some people realize the instability of chasing rises and killing falls, they want to hold virtual currencies for the long term, but human nature is inherently greedy and fearful.
Fear of falling prices, greed for rising prices, leading to actual operations inconsistent with rational expectations.
Only a very small number of people can overcome this nature, conquering greed and fear. However, most people continuously repeat their mistakes.
This cycle resembles the short memory of goldfish, making it difficult to truly change.
The fifth type: death from not stopping losses
For some炒币者, they firmly believe that no matter how much virtual currency prices plummet, they will eventually rebound. They insist on holding...
The faith in selling, even claiming they won't sell even if they die, can remain calm in the face of any crash, believing that miracles always exist.
However, for certain virtual currencies, refusing to sell even when dead may indeed lead to heavy losses. Taking Zhonghua Coin as an example, it once dropped from...
A peak of 35 yuan all the way down to 0.5 yuan, then collapsed and was investigated for pyramid schemes, resulting in 260 million yuan disappearing. It can be said that this is a tragic death for炒币者.
The most tragic way for炒币者 to die.
炒币者 who are easily caught fall into two categories: one is just getting into炒币, because the ignorant are fearless, and the cruel nature of this method...
Being completely ignorant, leading to funds being inexplicably consumed; the other type is veterans, who have been in the炒币 circle for a while and...
Having gone through multiple trades, overall they have made some profits.
For many炒币者, they have become accustomed to the volatile rises and falls of virtual currency, even seeing sharp declines as opportunities, becoming bolder, yet not realizing...
There are various types of virtual currencies, and a careless mistake may encounter situations like liquidation or collapse. Many tokens have experienced liquidation due to policy crackdowns, leading to a sudden drop in previous gains.
The sixth type: death from high-frequency trading
Many炒币者 are keen on high-frequency trading.
That is, frequently conducting buy-sell operations, seeking to obtain considerable profits through price differences. However, the most...
The final result is often continuous losses. Why does this happen? Theoretically, earning 1% in each trade, as long as it ensures...
If successful once a day, the daily return rate is 1%.
Within a year, this could bring a profit of 365%, or even more, if the effects of compound interest + are considered, this number is even more astonishing.
However, in reality, successfully trading once a day seems simple, but the actual operation is an extremely difficult task.
This is because the price fluctuations of virtual currencies are extreme, making short-term trading difficult to predict accurately, and high-frequency trading leads to a decline in success rates.
The reduction in profit rate will lead to more losses.
Increased losses affect traders' mentality, a deteriorating mentality further leads to more and larger...
Losses created a vicious cycle.
For example, imagine what would happen if you frequently change lanes on a highway; almost everyone knows that such behavior will...
When something goes wrong. High-frequency trading in virtual currencies is similar to this. In addition, high-frequency trading leads to more transaction fees, and the actual...
The money earned may not cover these transaction fees, which is a common issue.