Difficult. But it is possible to minimize losses and grow amidst unrealized losses, which is actually the best way to understand the market.
The essence of trading is to combat human nature. What seems like a simple buy and sell requires going through countless psychological struggles. The difference between a novice trader and an excellent trader lies not in the trading targets or systems, but in mindset and discipline.
Personally, I advocate that initial losses are more beneficial than harmful for newcomers. Cryptocurrency is different from traditional financial markets; its risk factor is absurdly high, with daily price fluctuations easily reaching 20%. Moreover, exchanges offer leverage up to hundreds of times, and the market operates 24/7. Anyone with a bit of mathematical reasoning can sense the level of risk involved.
In the early stages, you must have enough respect for the market to avoid high-risk operations later on. Therefore, in the long run, initial losses are more beneficial than harmful, but you must control the amount of loss.
There is a profit consensus in the crypto market. No matter which stage you are in, as long as you decide to buy Bitcoin spot with all your funds and hold on, your unrealized gains will be your ultimate destination. Just based on this operation, you have surpassed at least 90% of people in the crypto space.
Newcomers who incur losses and exit quickly all come to the crypto space with the belief of making a quick turnaround. They think the crypto space is paved with gold, fantasizing that by investing a small amount of money, choosing high-leverage contracts and blindly chasing after cheap coins, they can achieve returns of hundreds or even thousands of times.
In fact, the market only needs a small correction to wash them out. Experience, information, funds, cognition, mindset, and discipline; without any advantage, I really can't think of how you, as a newcomer, can make money in the crypto market.
Finally, under this topic, my advice is:
1. In the early stage, only buy Bitcoin and Ethereum spot; do not engage in other trading operations. Follow the fluctuations of the spot market to understand the market and feel its true side.
2. Learn to understand various new and old narratives, as well as the underlying application logic of blockchain.
3. If you are a financial trading novice, you need to quickly learn the most basic financial terms. You need to clearly understand the operating principles of your trading targets and methods.
4. Don't go all in on contracts. It’s hard not to open contracts; in fact, all the traders I know in the crypto space do open contracts, the only difference is in the position ratios. It is recommended that each contract position does not exceed 10% of your principal, and definitely do not go all in on contracts. If you encounter extreme market conditions like 312, 519, or 805, and your direction is wrong, it will be irreversible.
5. Trust your judgment.
6. Trading is a hobby and an investment attempt, not a profession. Therefore, it should not affect your normal life and work rhythm. I have a friend who, after entering the crypto trading space, only fell asleep after 3 AM every night and checked exchanges more frequently than WeChat during the day. He was in a perpetual state of confusion, and I suggested he withdraw.
7. Broaden your perspective. Remember, the ways to make money in the crypto space are not limited to the secondary market; monetizing traffic, peripheral services, and arbitrage are all ways to earn money. Don't limit yourself to the secondary market games.
8. Risk prevention. Crypto finance not only has the brutal losses of market speculation but also various surrounding risks. For example, withdrawal issues, on-chain transactions, and scam exchanges... any of these that you encounter carelessly will be a dual blow to your financial and mental strength.
Understand market opportunities and be aware of industry risks.
I wish you minimal losses in the early stage, no losses in the mid-stage, and profits in the later stage.
