The core reason why ordinary people encounter losses in the process of trading cryptocurrencies is actually quite simple: during the period of price increases, their positions are relatively small, while they hold heavier positions during price declines.
Why does this situation occur? To trace back to the root cause, it is a problem caused by trading habits.
For example, when purchasing a cryptocurrency that is on an upward trend, the initial position established is relatively small. As the price continues to rise, a feeling of 'missing out' arises, making it difficult to suppress the urge to increase the position. However, when a wave of correction hits, the profits from the small position have not yet been secured, while the large position is already deeply trapped in losses. Certainly, there are times when averaging down is done correctly, but given that trading cryptocurrencies is a long-term investment activity, such trading habits will inevitably lead to significant losses sooner or later.
To effectively avoid this situation, it is essential to abandon the bad habit of 'chasing highs and selling lows' and to achieve the ideal trading state of 'buying low and selling high'. Specific improvements can be made from the following three aspects:
First, implement a fixed position building strategy. Absolutely avoid arbitrary changes to positions to prevent excessive increases during price chasing.
Second, establish the principle of only reducing positions after building them. Once the position is established, subsequent operations should focus on reducing positions rather than blindly increasing them.
Finally, adhere to the bottom line of not arbitrarily establishing positions. Especially when market trends are unclear, it is better to hold and observe rather than rush in to participate in trading.
Ultimately, for ordinary investors, it is important not to blindly imitate those so-called 'cryptocurrency experts'. True investment experts possess their unique logical thinking and operational methods when conducting trading activities, while ordinary investors urgently need to cultivate a sound trading habit, gradually improving their investment level and overall quality.