Overall, cryptocurrency trading is a field that requires high focus and specialized knowledge, suitable for those who can understand market dynamics, manage risks, and continue learning. If you are ready to face the uncertainties of the market, this could be a financial opportunity worth exploring.
After more than 10 years of trading cryptocurrencies, I suffered significant losses and debts in the first three years. After self-adjustment, I achieved financial freedom in the last 7 years, with stable compound interest, a monthly income of six figures, and an annual income of seven figures!
If you are currently losing money in cryptocurrency trading, take a few minutes to read this article, and you will find the answer!
Everyone, take a look at my tearful self-reflection after suffering losses and debts: I realized one thing, only one type of person can get rich from trading!
In this circle, a day equals a year in the stock market. Those who play with cryptocurrencies are no longer interested in stock trading. The all-day trading of cryptocurrencies and the lack of limits on price fluctuations fulfill many people's dreams of overnight wealth, which is one of the reasons for the popularity of virtual currencies. This is also why losses in this circle have become a normal phenomenon.
Every investor who enters the cryptocurrency circle will experience significant losses, liquidation, and the transition from profit to loss during their trading career. The only people who get rich in the army of cryptocurrency traders are those who have experienced bankruptcy, summarized their experiences, and have a strong mindset. If you have not experienced liquidation or significant losses, you will never know what stop-loss means; if you have not experienced the transition from profit to loss, you will never understand the difference between a moment of heaven and a moment of hell in mindset.
1. Survival is the first principle.
Sun Tzu said: The good warrior of old first ensured he could not be defeated, and then waited for the enemy to be vulnerable. It is simple to avoid major losses; survival is the first principle. When danger threatens this principle, abandon all other principles. Because no matter how many 100% excellent performances you have had in the past, as soon as you incur a 100% loss, you have nothing.
Once your capital is wiped out, it is destined for you to be eliminated. To play this game well and achieve ultimate victory, all systems and rules must prioritize preserving your capital.
Correct capital management:
Every success only allows you to take a small step forward, but a failure can make you take a big step back. This big step hinders capital accumulation, which requires opportunity and time. Human nature is always like this: the pain of losing 1,000 yuan is far greater than the joy of gaining 1,000 yuan. A significant loss of capital can easily affect an investor's mindset. Losing 500,000 out of 1 million means you now have 500,000, but to increase that 500,000 back to 1 million, you need a 100% profit. 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 rooftop back to the ground. You cannot control the direction of the market, so there is no need to waste energy and emotions on situations you cannot control. Do not worry about what changes the market will undergo; instead, worry about what strategies you will take to respond to market changes. Judging right or wrong is not important; what matters is how much profit you gain 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 spending half a day shopping, yet for investors, the thought of buying only lasts a few minutes. This is a common trait among many; it is certainly not the behavior of someone who wants to achieve great success in the investment market. To make big money in the market, investors must be cautious and vigilant, guarding their accounts as if walking on thin ice.
When entering the market, have a clear operating system:
(1) How much do I plan to earn in this wave of market movement?
(2) What is the maximum loss I can accept? If the market retracts, the loss amount must be exited immediately.
(3) I must ensure that I secure a portion of the profits from each operation.
(4) Gradually increase your position to avoid full position trading. As profits rise, continuously raise your profit stop-loss level, never allowing the profits you have to turn into losses.
(5) Always give yourself another trading opportunity, and strictly operate according to your trading system.
The trend is your best friend.
The biggest enemy in trading is the patience to wait for a clear market trend and overtrading. Bull markets do not end in a day, nor do bear markets. Trading in this circle is a place where one can go three years without opening a position and then profit for three years. As long as you have patience, wait for the market trend to become clear, find the leading stocks, and hold on until the entire bull market ends without overtrading, then you can achieve unexpected profits. When the trend comes, respond accordingly; when there is no trend, observe and be still. Overtrading is also a major enemy of investment; those who chase price differences can only earn small profits but cannot make big money. Let's calculate the trading fees of overtrading: current virtual exchanges charge a 0.2% fee for buying and selling, meaning a complete trade costs 0.4%. If a trader operates once a day for 365 days a year, they lose 4/1000 * 365 = 140% due to fees. You did not misread; it's 1.4 times. Think about it: Buffett strives for 30%; how about you? Your trading fees for the year are 140%! Another trader often overlooks this: the more frequently one enters and exits the market, the easier it is to frequently change their mind. The saying goes: the more you do, the more mistakes you make; the less you do, the fewer mistakes you make; doing nothing results in no mistakes. However, excessive trading can cause you to miss major market trends: plan before acting, based on obvious price breakpoints, market sentiment, trading conditions, and capital inflow, to determine the arrival of trends. Maintain a broad perspective on market movements and do not be misled by short-term fluctuations.
4. Psychological quality is the core.
Trading against human nature is a violation; it's a game that determines that only a few can profit, while the vast majority are just there to provide capital for others to play. In trading, one needs to have strong psychological quality and a cosmic mindset for liquidation. If you enter the market with 10,000 yuan and your heart races for a fluctuation of 100 yuan, I advise you to leave this market early to ensure your personal safety. If you have the mindset to earn 100 million, then fluctuations within 1 million will not affect your mindset because what I ultimately want is 100 million; 1 million does not concern me, which gives you the opportunity to achieve significant profits. Trading is not only a game against large institutions, market makers, and retail investors but also a game against yourself. As the ancients said: Fighting against heaven is joyful, fighting against earth is joyful, the highest realm of struggle is to fight against oneself. Trading is a process of constant psychological struggle, always questioning whether I should sell or hold at this price, what to do, which requires strong psychological quality. Additionally, good psychological quality must be supported by a good physical condition; good health is key. Why do people live? Living is merely a process of possessing a healthy body and constantly refining one's soul in the world.
5. A trading approach that suits you.
The Tao represents the logic of things, while the Shu represents methods and techniques. As the saying goes: having the way but no technique, the technique can still be sought; having the technique but no way is useless. The emergence of a trading approach represents a person's knowledge, insight, and courage. Through constant ups and downs in the market, one ultimately understands the basic logic of trading, which is in line with the rules. The biggest enemies of investors are hope, fear, and greed. Having your trading approach also requires overcoming human weaknesses: hope, fear, and greed. When the market is about to decline, it should be filled with fear, yet investors feel there’s nothing wrong and are still filled with hope; when the market is rising, they fear a pullback, and at this time, they should have the greatest hope, yet they begin to feel fear. This is the reason traders cannot make big money. Having your trading approach and forming a trading system helps you overcome human weaknesses, letting profits run when the market arrives and ensuring you exit with a stop-loss when capital incurs losses is fundamental for achieving great wealth.
In the cryptocurrency market, only this type of person makes money; it is not about what techniques and methods are used, but about your self-discipline.
