Before the introduction, think about three questions.
1. Can the digital currency industry make money?
2. Can you make money in the digital currency industry?
3. What role do you play in the digital currency industry?
Classification of behaviors in the digital currency market.
In the coin trading market, there are two types of behaviors: investment and speculation.
1. Investors are called investors, and speculators are called speculators.
2. Speculative behaviors can be divided into whether it's a speculative market or professional trading.
Investment:
Theoretically speaking, investment is a long-term behavior, with the focus being that regardless of the duration, profit is the most important.
Of course, this contains three elements: time cost, risk estimation, and future returns.
Financial market
If everyone were right, it would disrupt the financial system. Therefore, the financial market is maintained by a majority of people making mistakes, and these mistaken individuals have created a group of rich people with their own money.
Speculation market:
When we layout different platforms one by one, switching back and forth in a bull market, this pattern is called speculation. During speculation, the trading that evolves from it transforms us from being speculators into traders. At this point, we need to shift from the restless psychology of speculators to the mindset of professional traders.
Trading can be divided into risk estimation, psychology, and fund management, etc.
Today we mainly discuss psychology, capital management, risk estimation, and profitability.
Speculators are commonly referred to as leeks in the market; most of the money earned by major players basically comes from speculators. Of course, some people follow the major forces' steps to harvest them, which is why it is often said, "The most romantic thing I can think of is distributing chips to retail investors at high points; people can only go with the trend, not against it."
Trading psychology:
If retail investors feel bullish, they should sell.
If retail investors feel bearish, they should buy quickly.
This is a very simple counter-psychology trading model.
Factors affecting coin prices in the virtual currency market:
The reasons can be divided into several modules:
1. Market development, policy factors, market emotions, historical prices, large player operations, and breaking news.
And the technical analysis of retail investors
In actual trading, mindset is the first priority, capital management is the second priority, and technology is the third priority.
Technical analysis:
Every time you make a trade, you should ask yourself what type of trade it is: short-term, medium-term, long-term, or swing.
Trading short does not make money and is very tiring; long-term investment is a much easier and more profitable thing. Now is the middle of a bull market, so buy high and sell low for profit differences. Trading coins should be done happily.
The most profitable aspect of technical analysis is capturing swings, whether in futures, forex, or the crypto space.
Thus, there is a saying: chasing highs ruins a lifetime, bottom fishing impoverishes three generations, honestly swing trading will eventually lead to wealth and status.
Swing trading is an important profit method in the entire financial field, which can be further divided into peaks.
And troughs, which are the lowest and highest points of a swing. Short at the peak and close short and go long at the low; this segment of profits will allow you to continue profiting.
If you are making long-term trades, and you truly seize the lowest point, when the peak rises, your mindset will be excited because of the profit. Maybe it will go even higher in the future, but if the peak drops and reaches the trough, your mindset will undergo another change. Therefore, during this period, we should adjust our movements based on market fluctuations. Because when you genuinely reach the trough, you may not be able to hold onto it, and you may end up buying at the lowest point and selling at the lowest point. This process can put a lot of pressure on your mindset.
Position management
:
I find that many people choose to trade with half positions.
Even going full position, in reality, those who are fully invested are often anxious throughout the process, and in the end, they will definitely incur losses, even going bankrupt, let alone losing everything (queuing on the rooftop).
A capital management method that allows survival in the market.
The first rule is position size.
Position control should not exceed 30% at every entry point. Even if you are confident at the highest point with an 80% certainty that it will rise, you should not exceed a 60% position. Because you still have 40% of your principal, this 40% is your recovery capital even if you lose 60%. But if you enter the market at a full position at one point, then when you incur losses, your principal is gone, and you may not be able to recover.
When choosing to enter, if you have already entered 30% or 50%, when this trend indeed continues as you expect, and you decide to add to your position, I hope you will add to your position again. Because a single addition can raise your average price to a very high level.
For example, if you have 20,000 dollars, you open a half position, buy in at 1 dollar, and when it rises to 2 dollars, you have made 50% of your capital, which is 100% of your initial investment. If you use the remaining 50% to add to your position, it is equivalent to buying 20,000 coins at 1.5 dollars, which raises your cost by 50%, thus you are shouldering an additional 50% risk, which means your original 100% profit turns into 50% profit and 50% risk.
Thus, every time you add to your position, you must not increase the size too much; the funds added should be half of what you used to open the position because the price fluctuations are entirely controlled by the major forces. Even if you buy at the lowest point, the major forces will still find a way to wash you out.
A simple example: only those who smashed their computers and phones can buy Litecoin at 25 dollars.
By now, if someone often observes trading, it is truly hard to hold onto Litecoin when buying at 25 dollars to see it reach over 100 dollars. Because the major forces will wash the market back and forth, making it hard for you to hold, as when too many bottom fish compete, they will take the major's chips, and the major will break below your buying price.
To wash you out of the market.
Stop-loss:
Stop-loss should be prioritized, but without entering a position, there is no stop-loss, so stop-loss is the first priority after entering. Every time you trade, whether short-term, long-term, or swing, you must set a stop-loss. Stop-loss is a trading model that guarantees fund safety.
Stop-loss is generally set based on individual tolerance, but we can use technical analysis to select support levels.
Execute stop-loss.
Some investment consultants do not set stop-losses when trading futures, which is equivalent to queuing on a rooftop. Therefore, regardless of which financial module you are dealing with, never hold onto losing positions; admit your mistakes when wrong. The market will forgive you and give you opportunities, but if you do not admit your mistakes, it is like going against the trend, akin to wearing short sleeves in winter and cotton clothes in summer.
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Stop-loss should be set according to personal ability, and is generally based on personal analysis of the market, the conversion of support and resistance, and the anticipated points when adjustments to stop-loss can be made.
Moving the stop-loss up is to secure your profits!
For example, when you enter at 1 dollar, the stop-loss should be set at 0.8 dollars. Then when it rises to 2 dollars, with support around 1.5 dollars fluctuating, you can move the stop-loss to around 1.5 dollars. This is called moving the stop-loss up.
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Moving the stop-loss down is a very difficult decision because you are already in a state of loss. This undoubtedly amplifies your risk, so moving down the stop-loss is not recommended.
Once the stop-loss is moved down, it is equivalent to having no stop-loss in a certain sense.
Remember to set your stop-loss before placing an order; holding onto losing positions is a dead end!!!
Profit-taking:
Taking profits in a swing is a very effective profit model, because when you can predict the peaks and troughs during a swing, triggering a profit-taking can fully guarantee your profit and automatically exit profitably.
In short-term trading, since you need to enter and exit quickly, you are focused on the market, so you do not need to look at profit-taking but must set stop-loss.
Long-term investors will periodically check prices and generally will close positions manually.
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Thus, profit-taking is more suitable for medium-term and swing trading.
Profit-taking depends on personal ability; you must not take profits at the highest point in the market, nor will you be able to buy at the lowest point in the market.
Pullback:
Pullbacks are also a trading model to preserve profits. It is often mentioned in forex.
Example: When you open a position and profit 100% on your 10,000, turning it into 20,000, if you find your profit is shrinking, no matter how good you think the trend is or consider it is just a normal pullback, when the profit drops from 10,000 to 5,000, choosing to close the position is called a pullback. The pullback rate is 50%. Generally, we set a mandatory closing when the profit rate retraces to 50%. Even if it does not maximize profits, we must do our utmost to preserve our profits. Therefore, when profits shrink, you must consider pullbacks and manually close positions, regardless of how good the point is. This is a good trading philosophy.
Pullbacks are related to personality and an individual's trading system.
Related (a trading system is a trading habit formed by an individual's character, psychology, and feel for the market. We call this a trading system, which is unique to each trader).
Trading mindset:
1. Emotion Index
2. Mindset control
In the war of money against money, the major forces use counter-psychology to seize retail investors' chips. For example, in a bullish trend, they will create a pullback to instill panic and take your chips away. The financial market is a battle of money against money and psychology against psychology. Therefore, the emotional index holds a significant weight in the entire market.
The emotional index is divided into many types, such as quickly feeling joy and sorrow, confidence, fear, greed, etc. One can feel them clearly within a trading cycle or on a trading day, experiencing the market's emotions.
For example, in the current Litecoin market, the entire market is in a low and watchful period. There is no increase in volume during this time; no one dares to enter or exit, and those trapped in this range do not dare to come out or add to their positions. This is a normal trading emotion.
In the process of making profits, we may end up with reduced profits or losses due to our confidence and greed. When we experience fear and disappointment, we lose the calm mindset to face the market, thus the emotions in the market are directly related to your personal emotions during your capital growth. This is also related to one’s growing environment. When we face the entire financial market, we should view issues calmly.
Some retail investors cheer when the market rises and curse when it falls slightly. In fact, the rise and fall of the market are normal phenomena. Do not think you can dominate the market when it rises and feel abandoned by the entire market when it falls. You should have a calm mindset to face the market, even if you are losing; you need to face it calmly and analyze where you went wrong because the market can tolerate everything.
For example, in the forex market, even if the US suddenly perishes, the dollar index...
A significant drop can encompass the destruction of America on the candlestick chart, accommodating the destruction of any country. Therefore, the candlestick chart can contain all negative and positive factors in the market.
Even if the candlestick chart performs poorly, he can still be tolerant.
Thus, do not oppose the market. In the entire trading emotion, you will experience some significant emotional fluctuations during your holding process. For example, if you hold a long position that may not be at a good point, possibly below a resistance area, you will likely feel particularly fearful and scared. Therefore, setting a stop-loss is crucial. When you hold a short position.
When you happen to be at a support level, your mentality at this moment is also fear. There are also out-of-market and missed opportunities.
This is also a significant panic emotion. Many retail investors panic when they are out of the market. This is also a very normal trading emotion in the market. Of course, do not be controlled by this emotion of the market; if you miss an opportunity, the market will always give you chances to enter again. Missing out is not necessarily a bad thing.
There is a famous saying in the market:
When you enter the market with money, if you lose, you are actually earning!
We enter this market with money, aiming to make profits, but do not make profit as the goal. Although you enter the market with the intention of making money, you may not necessarily make money, because in actual trading, a qualified trader is someone with a clever mind who can make money, while a fool can only incur losses. Because if their thinking does not leap quickly, they cannot stand in this market. Even if they work hard, they may not be able to flexibly follow the major forces' steps to choose profit.
This means you must keep pace because the market can switch between bullish and bearish at any time. In actual trading, you must maintain a calm and flexible mindset.
The concept of profit from the emotional index:
During your profit-making process, you may not be able to hold onto your chips. For example, if you buy at 1 dollar and it rises to 2 dollars, you may hold it, but at 3 dollars, you might want to exit. When it rises to 4 dollars, you may fantasize about quickly turning a bicycle into a car and getting rich, at which point you might rush to close your position and take profits. The result is that you never anticipated it could rise to 100, leaving you with a missed opportunity. During the entire major trend, if you hold onto your bottom position...
I just hope you can??? For example, when you got Litecoin at 25 dollars, it rose to 80 dollars without a significant drop. At this point, you completely do not need to liquidate your position. Maybe it can soar to 250. But in fact, below 100, 90% of retail investors who had a bottom position at 25 have already liquidated. Those who truly do not liquidate are either those who have held it for a long time and did not check or are truly skilled. Or it could be a coincidence, which is very normal.
Another thing is how we control our mindset; the only significant changes in mindset occur during stop-loss and losses. Stop-loss and losses are inevitable in the market; you must learn to accept them with a calm mind and head. Because only those who have experienced significant losses will immerse themselves in learning the technology. If you have never suffered losses, your mind will remain floating in mid-air, preventing you from truly learning and experiencing the winds and rains in the market.
Emotional trading is a major taboo in trading systems. When missing opportunities, do not chase highs or sell lows.
This is something every retail investor will do, so once something goes up, do not choose to enter without a suitable entry point, because your entry will be lifting the major's chariot. Lifting the chariot means you are helping the major forces push the market, so do not choose to enter with an emotional mindset fueled by resentment. It is better to wait a little longer because emotional thinking will lead you to oppose the major forces and the trend. At this point, you lack the ability to control the market, and the result will certainly be failure.
There was a previous event in the crypto market where 5.5 billion was liquidated. Why did it happen? Because he did not admit his mistakes and fought against the trend, it was as simple as that. He was liquidated; 5.5 billion may seem astronomical to us, but in the financial market, it is thinner than an ant's leg, especially in the crypto market. Therefore, newcomers should not rush into the crypto market because the pressures and risks borne in the crypto market far exceed those in other markets.
Do not blame the market for not moving according to your mental expectations or the trend you set. Respecting and fearing the market is the bottom line for everyone interacting with the financial market. The market is always right and can accommodate everything; this statement means do not oppose the trend or the market. When the market says it will fall, you should follow its lead and short; when the market says it will rise, you should follow its lead and go long. When we lack the ability to judge whether the market will rise or fall, do not rush. This must be linked with technical analysis.
The mindset of a true trader is paramount, with capital management being second and technology third.
There are many types of technology, but among these three factors, the hardest is mindset, and the simplest is technology.
Trading discipline:
To standardize the concepts violated by every trader during trading, a common mistake a trader easily makes:
1. Likes to inquire about insider news from various channels.
This is a very common retail investor mentality. When you ask others, you are showing a lack of personal opinion, which is incorrect. Any advice you receive should be taken as a reference; you must have your own thoughts. Don't hand your heart over to others.
2. Habitual thinking
When you have no experience in bear or bull markets, and you are in a bull market, your thinking will always be to go long, to buy, and wait for the rise. Therefore, when you cannot distinguish between bull and bear, you will earn bull market money with bull market thinking and lose bear market money. So never place your thinking in one direction; as you experience both bull and bear markets, you must always be prepared for a bull-to-bear transition and a bear-to-bull transition. Usually, a bear-to-bull transition requires a long cycle, known in technical terms as a cycle, where history will repeat itself. When you think in one direction, you are likely to be utilized by the major forces to be harvested, and this thinking will cause you to give back the money you earned.
3. Full position trading
A common mistake for every newcomer; everyone thinks that trading with a full position or using high leverage will yield more profits. This is a misconception.
Holding a full position when you are correct in direction can cause you to miss an opportunity to add to your position. Conversely, if you are wrong in direction, you have no self-rescue method aside from incurring losses.
At this time, you have no opportunity to buy in at a low price to lower your average cost. Your principal loss is a loss without any suspense.
Thus, full position trading is a major taboo in trading!
4. When trading conflicts with real life, do not force trades when you have no time to execute them.
Because forcing trades can lead to poor performance in real life and financial loss in the market.
Like virtual coins.
The market is all a T0 market.
The market operates 24 hours a day, and half of its state is constantly changing. Therefore, prices can significantly fluctuate within minutes or tens of minutes. For those without time to operate, missing stop-loss can lead to missing the best opportunity, or even incurring losses.
5. It is strictly prohibited for anyone to borrow money to enter the financial market.
Borrowing to enter the financial market first affects your mindset. When your mentality shifts and you are eager to profit, you are already losing money. When you cannot face the market with a calm mind, what you can get is only loss.
What is a true trader?
Have a decisive heart and a calm mind, with a quick thinking frequency.
In the financial market, there are few constants, but many stars. Ten years later, if you still ask about 0.5 Bitcoin,
Who was the person who earned three hundred Bitcoin and thousands of Litecoin? Perhaps everyone has forgotten, but decades later, when you mention Buffett...
...You still remember this stock god and short-selling master, Soros.
A true trader must possess many qualities; the speculative market is not something everyone can engage in because speculation is directly linked to trading. Good traders need to have good trading talent, which is a very important concept.
If you enter this market for ten years or twenty years and still cannot achieve stable returns, what reason do you have to continue in this market? It is like a romantic pursuit; if you chase a girl who does not like you, can you pursue her for a lifetime?
Good traders have a direct relationship with talent. A good trader does not have the mentality of wanting to get rich overnight; this mentality is what is said when the entire market is emotional, but real traders do not have this mindset.
A trader once said, "My goal is to make a profit of 30% on my principal each month, and to limit losses to 5-10% of my principal. If I make a profit of 30% this month, I will close all positions; the remaining time is for learning, and I will enjoy life. This is also why many traders love this market, because the market will not allow you to profit indefinitely, nor will it allow you to lose indefinitely. A good trading philosophy is to achieve stable long-term profits, not to become rich overnight. Getting rich overnight often means you cannot maintain that wealth because you are not necessarily going to quickly withdraw from the market to secure profits, and you may pursue even greater profits instead.
When you exit the market, do not rush to enter; make sure to tell yourself that you have exited, and you need to wait. Waiting is a very good way to enter because only by patiently waiting can you view the entire financial market more rationally, and view the entire situation more rationally. Ask yourself every day if you have entered; if not, please wait patiently. Waiting may not guarantee profit, but at least you will not lose. However, if you blindly rush into the market, you may not make money, but you will certainly lose.
When entering the financial market, you should ask yourself whether you define yourself as a speculator, investor, or trader because if you have no trading talent and no speculative talent, you can only choose the investment zone for profit and layout long-term.
Real traders may find six out of ten are divorced, and among the remaining four, only one or two can make money. And one of those one or two is definitely a woman. The difference between women and men is that women understand the importance of securing profits, while men tend to be greedier.
So when you define your position and decide to become a trader, you need to start systematically learning earnestly, choosing to review (revisiting historical charts to reinforce your feel for the market) during weekly profit settlements, and also adjusting your mindset.
Retail investor psychology:
Retail investor psychological habits are the same. When market emotions are high, the major forces only need to push the wave, eating chips at important points, retail investors will actively follow, pushing the price to the target point the major forces want to reach, then the major forces can easily distribute chips at high points.
When market emotions are high, many people will be infected by the market's emotions, letting the entire market be enveloped in madness, resulting in many highs being repeatedly broken.
After a significant rise, a sudden drop can lead the entire market to calm down, just like being splashed with cold water when it is very hot. The market will express panic, and retail investors will fear their losses will expand, leading them to sell off their holdings. However, market positions will continue to drop, breaking certain supports, further exacerbating the situation, which will also result in your 25-dollar Litecoin.
Coin prices are closely linked to the emotions in the market. When a series of bad news or good news emerges, retail investors are often unable to analyze and think calmly from a rational perspective, easily getting influenced by the market's emotions, allowing the major forces to take advantage.
When the coin price drops, it is generally not a problem to maintain profits, but the issue is that we need to consider whether this is a real drop or panic deliberately created by the major forces.
For example, a while ago, a news report stated that Bitcoin ransomware had emerged.
This virus quickly spread globally, and at this time, major media outlets rushed to report on Bitcoin.
At this time, Bitcoin became recognized worldwide, many computers were infected, and from the national perspective, Bitcoin would definitely be defined as a money laundering tool. However, for coin prices, because this virus could not be cracked in a short time, many people paid ransoms for important documents, and these people would definitely buy Bitcoin in the market. From May 25, Bitcoin's price was further pushed to a historical high, breaking from 18888 to 19000. So we need to interpret this news correctly; of course, when Bitcoin is recognized by some countries, this news is expanding the serious global acceptance of Bitcoin, but the consequences are not for us to consider; it is a matter for the state.
In June, the state will regulate Bitcoin. This may seem like bad news in the short term, but in the long term, it is indeed good because when the state regulates, it does not explicitly prohibit Bitcoin, which is a positive acknowledgment of Bitcoin by the state. Therefore, when facing news, we must think rationally about the news.
When we can rationally utilize psychological analysis...
And when doing technical analysis, it can effectively avoid risks and maximize profits. Buffett once said, "I retreat when the market is most euphoric, and I enter when the market is at its lowest." The reasoning is very simple, but few can actually do it.
When the market panics, such as when Litecoin was halved not long ago, the prevailing sentiment was that Litecoin was bearish and would drop to 80, while when Litecoin was pushing 250, the sentiment was that it would reach 800. Thus, when this pathological psychology enters everyone, it is easy to lose rationality. A calm mind is the key to victory.
In conclusion, investing involves risks; enter the market with caution!
At this point, I hope everyone will think about the three questions posed at the beginning.
When you have sufficient time and energy, if you want to invest, speculate, and trade, you can distinguish your funds.
Use 50% of the funds for investment, 30% for speculation on various platforms, and 20% with the mindset of losing at any time, choosing to engage in genuine trading in this market. Because the market truly exists where you might lose everything at any time. Of course, if that 20% can cover your learning expenses, it is also worth it.
Three realms of the financial market
With coins in hand, there are coins in the heart.
Coins in hand, no coins in heart.
No coins in hand, no coins in heart.
The ultimate realm is to break away from the financial market
There are thousands of virtual currencies in the world, and hundreds in the market; it is impossible to study them all.
First, you must be clear about your financial situation, using a portion of your funds for long-term investments, as it is the easiest way to make money.
Second, do not trade frequently. The more you trade, the more mistakes you will make.
You can win N 100% in your life, but you can only lose one 100%.
Thus, your profit-loss ratio is an unproportional concept in life, and I hope everyone pays attention to this.
Thirdly, learn to wait because waiting can help you understand who you are and what you want to do.
The last trading insight I have gathered over ten years of trading coins, a must-read for both newcomers and veterans!
Trading coins is not as simple as you think; it is not just about buying low and selling high to make countless profits. A qualified trader must not only understand economics, follow news hotspots, be aware of national policies, care about international situations, study the fundamentals and technical aspects of virtual currencies, but also constantly battle their own fears and greed. A big heart is required.
Endure the ups and downs, from nothing to something, from something to nothing, withstand temptation, endure hardship; one can say that those who survive in the crypto space are basically resilient, impervious to deceit, and have been tempered into steel.
Three principles of treasure hunting:
Principle 1: Strictly control your position to 50%; it can be defensive as well as offensive. Never go full position; if you do, once there is a significant drop, even a god cannot save you.
Principle 2: Once it rises by 2-3 times, you must first sell half; after breaking even, we can use the profits to slowly play with the big players until we reach our desired price, and then slowly exit. We leave a 10% bottom position to avoid missing out on opportunities from the pullback benefits given by the strong players.
Principle 3: When the market is crazy and everyone is chasing highs, you must gradually and in stages sell off your chips. Do not trust the numbers in your account; only the money in your pocket is yours; the account balance is merely a string of numbers.
Three secrets of trading coins!
Secret 1: Small websites for trading coins, not formal, do not put large funds randomly, don't let the website disappear; if you want to play, go to formal big websites like Huobi, Bitcoin Era, etc.
Secret 2: Recently, there are many crowdfunding coins, please keep your eyes open; not all are uninvestable, but there are many pitfalls. Be cautious, don’t rely on luck, and understand clearly; just because it is a crowdfunding project doesn’t mean you should invest; that’s like gambling and relying on luck.
Secret 3: The crypto space is currently relatively quiet, and the big market is cooling down. Focus on short-term operations and select quality coins ranked in the top 20 globally for long-term investment, allowing for gradual low-price accumulation.
(Remember, do not go full position, meaning do not buy a lot of coins at once; invest too much money at once. You can first enter a half position, controlling risks and funds. If it rises or falls, you can promptly add to your position or stop-loss. This way, it will be more conducive to making money. If you do not add in time, you can at least minimize your losses, as trading coins is all about making money. So be prepared to avoid unnecessary losses.)
Lastly, and most importantly, do not follow the crowd. Many newcomers start trading coins and, seeing someone in the group say to sell or risk a big drop, it is foolish to act on that. Because many people either have no holdings or are misleading newcomers to create panic, prompting you to sell at low prices. Some people cannot withstand the scare, quickly selling all their holdings. Once you sell, those people will buy low, and you will incur losses; the ones who create panic will profit by buying low. Trading coins is always about advice from others; the key is to make your own judgment.
The method has been revealed; I hope fans can achieve financial freedom!!
Recently laid-out altcoins are about to launch!!
Expected price increase of more than 50%!!
Minimum expected profit increase of 3-5 times!!
Leave a comment 999 to get on board!!
