Having traded cryptocurrencies for over 10 years, I incurred debts of 8 million in the first 3 years but achieved financial freedom in the following 7 years with a monthly income in seven figures and an annual income in eight figures. I share my experiences and insights, claiming that those currently losing money in trading cryptocurrencies will find their answers after reading this article.
It is pointed out that only one type of person gets rich from trading cryptocurrencies, and due to the characteristics of 24/7 trading and unrestricted price fluctuations in the crypto market, while it satisfies many people's dreams of getting rich overnight, it also makes losses a normal phenomenon.
Emphasize that teaching someone to fish is better than just giving them fish. Cryptocurrency investors can gain both financial returns and growth in investment knowledge and experience in sunny times.
In the investment process, we will not only provide investors with analytical ideas for market trends, basic knowledge of market watching, and the usage methods of various investment tools, but also bring exciting interpretations of fundamentals, clarification of chaotic international situations, and identification of various investment influences.
Let you become both a winner and an expert in investing!
Get straight to the point.
Sharing some insights from speculative trading.
In different stages of life, life experiences and insights can greatly change our thoughts.
It is the same in the speculative market. From initially entering this market to the first year, second year, and third year, each year brings different feelings, and understanding and experiences of speculative trading accumulate. Only through continuous reflection and summary of the market have I gained something over these years.
Today, I would like to share with you a few insights from my experiences in the speculative market for your reference.
Success equals small losses plus various profits accumulated multiple times.
Avoiding large losses is simple: survival should be the first principle. When dangers that hinder this principle arise, abandon all other principles.
The way of trading is to defend the unbreakable ground and attack the enemies that can be won.
Many people perform very well in simulated trading, often doubling their capital within a few weeks. However, once they engage in real trading, they frequently incur losses. At this point, their most common reaction is to continue researching technical analysis methods, constantly trying to improve their success rate, hoping to make money this way.
In fact, this approach is a detour and unnecessary. Because, generally speaking, technical analysis accounts for only about 20% of overall trading skills, and its importance is not significant. Many experts have a low success rate but can continuously make money. If you perform very well in simulated trading, it indicates that your skills are excellent and there is no need to study further; instead, you should focus your energy on other areas, such as capital management, increasing positions, and grasping long-term trends.
You must stick to your good cards and reduce your bad cards. If you cannot hold on to your good cards, how can you make up for the losses caused by bad cards? Many quite good traders end up losing all their earnings because they are unwilling to stop trading when they are losing money. When I am losing, I tell myself: you cannot continue trading; wait for clearer market conditions. And when you have good cards, you must hold on patiently; otherwise, you will definitely be unable to make up for the money lost from bad cards.
One of the most common mistakes made by traders is trading too frequently. They do not select appropriate trading opportunities carefully. When they see market fluctuations, they want to jump in, which is akin to forcing themselves to trade, rather than patiently waiting for good trading opportunities from a proactive position.
We are able to profit because we have done a lot of work patiently before entering the market. Many people, once they make a profit, become complacent about trading. Their operations start to become frequent, and the subsequent losses can overwhelm them, leading to huge losses, even losing their initial capital.
Every time I enter the market, I always set a stop-loss point in advance; this is the only way that allows me to sleep peacefully. I always avoid setting the stop-loss point at price levels that the market can easily reach. If your analysis is correct, the market should not revert to the stop-loss price. If the market reaches the stop-loss point, it indicates that this trade was a mistake.
My worst trade stemmed from impulsiveness. Based on my trading experience, the most destructive mistake in trading is excessive impulsiveness. Anyone involved in trading should base their actions on established trading signals and should never hastily change trading strategies due to momentary impulses. Therefore, avoiding impulsiveness is the first rule of risk control.
I have been trading for over ten years, and if I hadn't learned to remain calm early on, I would have been driven mad by the extreme ups and downs of my trading career. Traders are like boxers; the market can strike you at any time, and you must remain calm. When you incur losses, it indicates an unfavorable situation for you. Don't rush; take your time. You must minimize losses and protect your capital as much as possible. When you suffer significant losses, your emotions will surely be affected. You must scale back your operations and consider the next trade after some time.
Why can I achieve such a high profit rate? It is because I fear the market's unpredictable nature. I have found that successful traders are usually those who fear the market. This fear of market trading compels me to carefully select my entry timing. Most people do not wait for the market conditions to become clear before entering; they always enter the forest in the dark, while I wait for dawn. I do not predict the direction of market movements before they occur; I always let market movements tell me the direction. Choosing and waiting for foolproof opportunities to strike is my most important trading principle.
Do not let the joy of profit cloud your judgment. The most difficult thing in the world is how to sustain profits. Once you earn money, you will want to continue earning more, and in doing so, you will forget about risks and no longer doubt the correctness of your established trading principles. This is what leads to self-destruction. Therefore, you must always remain cautious. Be very careful when losing money, and even more cautious when making money.
Trading strategies must be flexible to respond to market changes, thus demonstrating your highly cautious approach to trading. Most traders commonly make the mistake of having a rigid trading strategy. They often say, 'Why is the market completely different from what I expected?' Why should it be the same? Isn't life always full of uncertainties? When your important stop-loss point is broken by the market, it is very likely that you are encountering a volatile market or a trend reversal. How can you continue operating in this trend then? Therefore, at this point, you must be very cautious and wait for things to become clearer rather than recklessly continue to operate.
Before entering the market, calm your mind and think carefully:
Consider how many professional skills you have to support yourself in the market.
Think about whether your mindset can withstand the ups and downs of the storm.
Consider whether the limited funds in your pocket can cope with infinite opportunities and losses.
There are a pile of nautical charts for the sunken ships under the sea.
The most important factor for trading success lies not in which set of rules is used but in your self-discipline.
Time determines everything.
Life is not just a contest of strategies; to some extent, it is also a competition of time and life.
If Buffett lived 10 more years and could sustain just a 5% profit each year, his total wealth increase would be enough to make him laugh at the world.
Remember to avoid overtrading.
The speculative market is a free market where trading can occur at any moment. At any time, there is always a market open somewhere in the world, and there are dozens of speculative products that provide trading and profit opportunities at different times. Many traders develop a habit of constantly watching the market, which can lead to impulsive trading, resulting in multiple trades in a single day and inadvertently increasing their positions to a dangerous level.
Excessive trading not only increases your trading costs but also leads you to lose yourself in the dilemma of trading for the sake of trading.
Seize the market trading opportunities.
There may be many opportunities to profit in speculative market trading, but not every trading opportunity is worth pursuing. This is because both funds and personal energy are always limited, and maximizing the value of funds and energy is what we need to achieve. This requires you to enter the market only during significant market movements, where one profitable trade should equate to the total profits of several smaller trades, thus conserving energy and maximizing returns.
Focus on opportunities for price breakthroughs.
When price breakthroughs occur in the market, especially at key levels, it represents important profit opportunities. When the market price is in a long period of consolidation, a breakout in either direction, when accompanied by volume, is a good time to establish new positions.
Develop trading plans and risk control strategies.
Speculative trading, under the influence of leverage, must be accompanied by trading risks. These risks can bring us fatal harm under leverage, so before trading, various preventive measures for unexpected events must be established. For example, how to set stop-losses and the implementation of increasing or decreasing positions are crucial.
Summarize the trading mistakes you have made.
For every mistake made in trading, we must carefully record it, delve into the reasons and various related factors, and regularly check whether we are repeating errors. Only in this way can you make faster progress.
In this rapidly changing world of cryptocurrency, do you often feel confused and lost? Don't worry, I will be the guiding light on your journey. Follow me as we interpret the logic behind the ups and downs of the crypto market, explore the potential of emerging projects, and find your own shining star in the vast universe of blockchain. I look forward to deep interactions with you in the exciting world of cryptocurrency, growing together!
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