Teach you the trick of cryptocurrency trading: heavy position when rising, light position when falling
Speaking of cryptocurrency trading, have you ever thought about how to hold heavy position when rising and light position when falling?
Let me first give you a point of view. Everyone has heard the saying "You have to be there when lightning strikes." In fact, not only is 80% of the wealth in society in the hands of 20% of people, but the same is true in the cryptocurrency circle. 80% of the time is garbage time, and only 20% of the time can make money.
There is a book that talks about the "Lightning Theory", which says that in the past ten years of Bitcoin, if the 30 days with the largest increase are removed, the annualized rate of return will be reduced by half. This means that, for investment, 80% of the returns are earned in 20% of the time.
Because you don't know when lightning will come, so you have to stay at the table all the time. It's not that you have a full position when it rises and you have an empty position when it falls. How can it be so good? You have to try your best to hold a heavy position when it rises and a light position when it falls.
But most people do the opposite. The higher the price of the currency, the heavier the position. When the bottom rises, the position is light. When the price of the currency is high, greed becomes heavy, and the position starts to be heavy. As a result, it reverses and falls.
It's like gambling. When you win some money, you start to bet big. As a result, when you lose, all the previous winnings are gone. Investing according to human nature sounds good, but you can't make money. You have to do the opposite. Others are afraid of your greed, and others are greedy. You are afraid. When the price is high, give the chips to others, and pick them up when the price is low.
This investment method that goes against human nature may make you uncomfortable. But think about it, only a few people make money, and most people follow human nature. You can only go against it to pick other people's pockets.
Once the currency rises, you want to rely on it to make up for the previous losses. The more it rises, the more reluctant you are to sell it. This is a typical gambler's thinking. You have to eat the middle of the fish. The head and tail are not delicious. You have to know how to give up.
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