What is the root cause of losses in cryptocurrency trading?
Let me give you an example to make it clear
You have 1 million in assets, and you bought a coin with 700,000.
The next day, the coin fell by 1%, and you lost 7,000 yuan. You don’t care, because it will rise back sooner or later.
On the third day, it fell by 3% again, and you lost nearly 20,000 yuan again. You are fearless, because it will rise back sooner or later.
On the fourth day, it rose by 2%, and you got back nearly 10,000 yuan. You smiled, and everything is under control.
On the fifth day, it suddenly fell by 20%, and you lost 140,000 yuan. You are a little nervous and start to imagine that it will rebound tomorrow.
On the sixth day, it rebounded by 5%, and you breathed a sigh of relief, thinking that there is still a trace to be found in cryptocurrency trading.
On the seventh day, it rose by 1%, and you began to look forward to it.
On the eighth day, it rose by 1%. Although you think it is rising very slowly, at least there is hope of getting back the money, so you are content.
On the ninth day, it suddenly plummeted by 30%. You began to panic and wondered if you had chosen the wrong coin.
On the tenth day, it fell another 10%, and you began to get angry.
On the eleventh day, the price of the coin stopped fluctuating sharply and began to go sideways. You saw someone on the Internet saying that this was a bottoming signal, indicating that the market was accumulating momentum, and you firmly believed that it was about to rebound.
But...
In the following week, the price of the coin continued to go sideways. You went online to learn some knowledge about cryptocurrency, and based on your own understanding, you believed that this was the legendary "main force accumulation stage"!
You continued to hold the coin...
A month later, the price of the coin not only did not rise, but continued to fall by 20%. You began to feel numb, thinking that if you could get your money back, you would withdraw the money and never touch cryptocurrency again...
But things did not go as you wished, your coin was still falling, and at this time you finally learned a new concept - stop loss!
You are in great pain and struggling, not knowing whether to sell or continue to hold
Just then, a good friend of yours tells you that a new coin has soared by 200% recently, and shares his "leading strategy" with you!
You believe it! You actually believe it!
So you sell your coins and tell yourself that you will come back to cover your position after you make money on the new coins, and then hold it for a long time until you get your money back!
So do you know the root cause of the loss in currency speculation?
