1. Plan your funds reasonably for cryptocurrency trading, ensuring you have resources so you won't panic!
2. Never trade emotionally, don't let profits cloud your judgment, and place orders blindly.
3. Develop a good trading plan and follow the market.
Large positions for trends, small positions for swing trades, controlling the ratio yourself. Light positions and stop-loss in counter-trend trades, and increasing positions in trend-following trades must be strictly adhered to. There is no trading that doesn't make money, only trades that don't earn money; trading is a test of the right mentality! I wish all cryptocurrency traders can find their own trading methods and profit steadily. After many years of trading, I have made profits and incurred losses. First, I summarize the main reasons for losses; some mistakes I've made as well. Leverage is a double-edged sword; used well, you can run faster than others; of course, the reverse is also true.
After playing contracts for a long time, you will find that trading in spot markets becomes very simple. Many newcomers hope that a single trade can yield huge profits, like turning 10,000 into 1,000,000, only to find themselves losing 50% from 1,000,000 to 500,000, and then returning to 1,000,000 requires doubling again, and returning to 0 is just a cycle.
Thus, newcomers are most likely to become self-absorbed, thinking they are invincible after making a few profits, and impulsively go all-in, only to end up back at square one. True traders who want to survive in the cryptocurrency market never put themselves in a corner; from the moment they take full or heavy positions, they are destined to be losers. I hope cryptocurrency friends remain vigilant in leveraged trading!
Experienced players choose to stay completely out of the market when the trend is uncertain, not rushing to operate, and enter quickly when the trend is clear. They also enter with small positions, while many ordinary retail investors frequently trade and take large positions in unclear market conditions, leading to continuous losses. When encountering ruthless market players, the losses become even greater.
Going against the medium to long-term trend and trading against the market leads to failure.
Many people believe their futures losses are due to having too long a trading cycle, thinking that playing short-term will be fine. However, when losses become apparent, and the market conditions worsen.
When stop-loss is needed in the opposite direction, there is always a psychological struggle about whether to stop-loss or not. Sometimes there is a lucky mentality, thinking the price will bounce back; it takes a long time.
Trading against the trend leads to failure. Even worse, inexperienced newcomers who don't understand the trend hope to average down by increasing positions, only to realize that as the market changes.
The price trend and your holding direction diverge more and more, but at this time, increasing your position leads to faster losses. You have embarked on the path to death.
Neither heavy positions nor frequent trading, chasing highs and cutting losses.
After many twists and turns, the shareable profits become smaller, and eventually, there is nothing left to take, leading to losses. Most reasons for losses and blowouts can be summarized in the above three types, such as being too greedy, which is essentially taking large positions. Detailed insights can be found in the top ten blind spots of futures trading. Full position trading --- full positions are bound to lose.
Frequent trading --- lacking technical guidance.
Trading against the trend - low probability, high risk.
Locking positions --- not accepting the reality of losses.
Lowering or raising the average holding price --- compounding mistakes.
Guessing the peak and the bottom, without setting stop-losses --- finding reasons for mistakes.
Long when the market is short, short when the market is long --- overly pursuing perfection is aimless.
Believing in news and blindly following the trend --- lacking understanding of the market.
Not being self-aware and doubting the market --- creating fear of the market.
Develop a long-term trading plan -- the future is uncontrollable.
Many times, trading in the cryptocurrency market is like driving on the road.
First, go to driving school to learn how to drive. Once you know how to drive, if you don't follow traffic rules, an accident will eventually happen. Even if you drive according to traffic rules, if you don't hit someone, someone may hit you; there are pitfalls everywhere. So, to drive safely, you also need to learn how to avoid pitfalls.
What are the trading rules and regulations in the cryptocurrency market?
Refer to the eight right and eight wrongs in cryptocurrency trading below:
Operating with the trend is right, trading against the market is wrong. (Once a trend is formed, it is hard to change in the short term.)
Using light positions is right, using heavy positions is wrong --- position size affects attitude, and attitude affects decision-making.
Being content is right, greed is wrong --- greed is the enemy, while contentment brings happiness.
Using stop-loss to protect profits is right, letting things run wild is wrong --- preserving capital is the first priority, making money is second.
Objective operation is right, subjective analysis is wrong; operate objectively and follow the rules.
Waiting and patience are right, restlessness and impulsiveness are wrong; cultivate patience and act at the right moment.
Adding to profitable positions is right, adding to losing positions is wrong; profit is the right direction, losses are the wrong direction.
Having a calm mindset is right, being anxious about gains and losses is wrong; the essence of trading is the clash of human nature and mentality.