I entered the market with 50,000, then 100,000, and later reached 302,000. In the third year, it went up to 590,000, and by August of the fourth year, it reached 3.78 million, and in November, over 7 million, until a few years ago when I could easily withdraw 30 million from the cryptocurrency market!
During that time, I fell to rock bottom. At one point, I had around 4 million; at that moment, I thought I could consider myself a big player in the cryptocurrency market, decisively quitting my job to focus on trading. I even borrowed money to trade. However, reality slapped me hard. The financial crisis not only caused me to lose all my profits, but I also ended up in massive debt, ultimately having to sell my house, and my wife nearly left me.
That period was my darkest moment. In just a few months, I experienced a fall from the peak to the bottom. But this also made me realize that the previous smooth sailing was not without luck.
Therefore, I feel that if I really want to continue on the path of trading, I still need to study diligently. In addition to understanding the basic knowledge, I should also analyze news and research technical indicators. If I do not conduct in-depth research and reasonably plan my finances, my funds will eventually be exhausted. Ultimately, as a retail investor without any foundation, I will only joyfully enter the market and sadly leave.
In the next three years, I cut off all contact with classmates and friends, stayed home, and worked tirelessly on my trading strategies. After working day and night, sometimes even sleeping on the keyboard, my hard work finally led to financial freedom through trading.
A guide for novice traders in the cryptocurrency market: How to avoid losing money?
I was once a novice, charging into the cryptocurrency market, chasing highs and cutting losses, only to find that the courage and luck I borrowed caused me to lose all my hard-earned money due to my inadequate skills.
I once followed so-called experienced teachers to trade contracts and learn technical analysis. Following the teacher's advice to short Bitcoin at very critical points resulted in almost complete loss! I eventually realized that choosing the wrong guide and not systematically learning spot trading led me down many unnecessary paths! Without solid professional skills and understanding of the market patterns, it is very difficult to achieve continuous and stable profits through trading.
After many twists and turns, I ultimately chose to systematically study natural trading theory, as well as data analysis in the cryptocurrency market. By combining volume-price relationship analysis, I finally established a three-dimensional trading system suitable for myself, which is continuously being improved and practiced.
Before the arrival of a major bull market, in order to help more newbies avoid the mistakes I made, and to seize the once-in-a-lifetime opportunities during the bull market, I specially compiled twelve guiding principles for new cryptocurrency traders, hoping to help them understand some trading rules and principles, avoid unnecessary paths and traps, and accelerate achieving stable profits.
To get back to the point, I urge novice traders to carefully read, comprehend, and practice the following trading principles. Feel free to reach out to me via Twitter for discussions.
1. Only trade spot, do not trade contracts.
In spot trading, slow and steady wins the race. In contract trading, one can quickly lose everything. Newcomers to the cryptocurrency field often wish to get rich overnight, leading to impatience, and without professional skills or guidance, seeing others quickly profit from high leverage in contract trading, they also jump into high-leverage trading. The result is quick profits followed by quick losses, ultimately leading to losing all capital or even going bankrupt, severely undermining their confidence.
News of financial experts going bankrupt due to high leverage in contracts and committing suicide after facing massive debts is not uncommon.
Contracts are a zero-sum game. Compared to spot trading, they require even more professional skills and a good mindset. If a novice cannot even perform well in spot trading, they cannot succeed in the intense competition of contract trading. It is essential to stay away from contract trading and focus on spot trading.
2. Invest with disposable income; do not trade with borrowed funds.
In trading, it's 30% technique and 70% mindset! For new traders using their disposable income, remaining calm even after a short-term loss or being stuck will not affect future trading opportunities, ultimately allowing them to seize good trading chances. Conversely, if you are trading with borrowed funds, feeling highly anxious and scared, and holding onto such a poor mindset, it will be very difficult to make continuous profits, even if you occasionally encounter good coins and make a profit.
3. Follow the principle of going with the larger trend and opposing the smaller trend.
Going with the larger trend solves the issue of trading direction; opposing the smaller trend addresses entry points.
We all know that swimming with the current is easier and more efficient, while swimming against the current is very exhausting, even causing setbacks. Trading is similar to swimming; it requires going with the trend. When the medium to long-term trend of the market is upward, buying mainstream coins at lows will yield profits, and even chasing up mainstream coins can also be profitable. Conversely, if the market's medium to long-term trend is downward, even buying at lows is against the trend, and if one cannot withdraw in time, they will ultimately face considerable losses or be trapped.
Therefore, trading must align with the medium to long-term trend of the market. When the market is in a bull cycle, one should dare to heavily invest and go with the trend; when the market is in a bear cycle, one must learn to stay out and rest. This is the principle of following the larger trend. So, what is the principle of opposing the smaller trend? When the larger trend is upward, one should dare to find a good entry point to buy low during a short-term downtrend of the coin.
4. The principle of right-side entry and left-side exit.
Entering the market to buy coins is divided into left-side buying and right-side buying, and taking profits is also divided into left-side selling and right-side selling.
As shown in the figure, during a price decline, choose to enter the market on the left side in batches, for example, buying at points A, B, and C. You may buy at the halfway point or even at the lowest point. The left-side entry method is relatively aggressive, with higher risks, and is not suitable for novice traders.
Point D is the entry point confirming the price after breaking through the neckline of the W bottom reversal structure; it belongs to the right-side entry method. Although it may not be the lowest price point, it is relatively safe and certain, suitable for novice traders.
After entering the market on the left side, as the price rises, one should sell in batches: small increases, small sells; large increases, large sells, to lock in profits. As shown in the figure, selling at point E belongs to the left-side selling method, while choosing to sell at point E after the price breaks the upward trend line belongs to the right-side selling method. Novice traders should prioritize the left-side selling method for a more stable and maximized profit.
Using right-side buying and left-side selling methods, although not consuming the whole fish, one can still enjoy the most delicious parts, accumulating small victories into big wins.
5. The principle of trading new coins instead of old ones.
Coins in exchanges are divided into new coins, newly listed coins, and old coins. Newly listed ones are called new coins, those listed for a few months are called newly listed coins, and those listed for over six months are old coins. Traders with larger capital should prioritize mainstream coins like Bitcoin, Ethereum, and SOL.
Traders with smaller capital, including novice traders, should focus their larger profit opportunities on new and newly listed coins. Why trade new coins instead of old ones? This is because old coins, unless there are new technological breakthroughs or new narrative drives, will attract new speculative opportunities. Otherwise, investors are already well aware of them and there are no new stories to tell. Moreover, they have already been speculated by the market several times, resulting in serious trapped positions, making it more difficult for main institutions to drive the price up and attract market funds' attention.
New and newly listed coins, with new technologies, new tracks, new narratives, and new token models, easily attract investor attention. When new coins and newly listed coins successfully complete their bottoming phase and break out upwards, there are fewer trapped positions, making it easier for main institutions to drive the price up. Once they break through historical highs, the potential for imagination and price increase is significant, leading to greater profit opportunities. Based on my long-term observation of new coins being listed on exchanges, I have summarized a six-step operational model that new coins generally follow when being listed.
1) In the days following the launch, there will be a spike and then a pullback.
2) Continuous decline and bottoming, tragically ignored;
3) Continuing to bottom out for several days and starting to warm up.
4) Gradually rising and breaking out, capturing attention;
5) The price of coins frequently hits new highs, and the market goes crazy.
6) Institutions distribute chips, leading to chaos.
- Some beginners choose to buy high right after a new coin is listed on the exchange. This kind of behavior is very risky and can easily lead to being trapped and losing money. Buying when the new coin completes its bottoming phase and successfully breaks out is a more certain and safer right-side entry method, which is more suitable for beginners and conservative traders. Personally, I also choose the right-side entry method for buying coins.
The above content is the first part of the guiding principles for novice cryptocurrency traders. I will continue to work hard to write the second part, which will be published on Twitter. The outline is as follows.
Guidelines for new traders in cryptocurrency (Part Two) Outline:
7. The half-position entry trading principle.
8. The five major entry point buying principles.
9. Set stop-losses to protect your principal.
10. The principle of not trading frequently or impulsively.
11. The principle of avoiding short-term trading in swing trading.
12. The principle of persistently learning and integrating into excellent teams.
If you cannot control your hands, being liquidated will become a habit!
1: Do not overly trust your intuition; instead of looking at what others say, observe what is happening in the market.
2: Basic knowledge is still necessary, such as what is a standard lot, what is a spread, what is a commission, and concepts like MACD, KDJ, moving averages, Fibonacci retracement, etc.
3: Maintain a good mindset; making profits is normal. (Note: You also need to understand some basic knowledge.)
4: Communicate more with experienced investors, learn from their trading methods, trading skills, and trading insights.
5: Finally, of course, keep learning investment knowledge to enrich yourself; summarize daily. As the saying goes, practice is the only criterion for testing truth. Only through extensive real trading can one truly enter the world of trading.
Each of the above points is very difficult to achieve and requires long-term practice. There is a long road between knowing and doing.
The five useless laws of the cryptocurrency market:
1. Knowing how to buy, but not knowing how to 'heavily invest' is useless.
2. Knowing how to heavily invest but not being able to hold is useless.
3. Holding onto assets until the bull market ends without selling is pointless.
4. Not holding a strong trend is useless.
Heavy positions without the ability to hold are useless. The market can multiply your funds countless times, but losing it all can happen in just one instance.
Ride the fastest horse, wield the sharpest sword, drink the strongest wine, and climb the highest mountain! Here, penetrate the fog of information, and discover the real market. Seize the opportunity of leading positions, discover truly valuable opportunities, and do not miss out on regrets!
Comment 333, no long leads!!!
