After over 10 years of trading cryptocurrencies, losing 8 million in debt in the first 3 years, and achieving financial freedom in the following 7 years with a monthly income in the seven figures and an annual income in the eight figures, I share my experiences and insights, claiming that if those currently losing money in cryptocurrency read this article, they will find their answers.
There is only one type of person who can get rich from cryptocurrency speculation. The cryptocurrency market, due to characteristics like 24/7 trading and no limits on price fluctuations, can fulfill many people's dreams of getting rich overnight, but it also leads to losses becoming a common occurrence.
Emphasizing that teaching someone to fish is better than giving them fish, cryptocurrency investors can reap financial gains and grow in investment knowledge and experience on sunny days.
In the process of following investments, not only will we provide investors with analytical insights into market conditions and fundamental knowledge of market observation, but we will also present exciting fundamental analyses, clarifications of chaotic international situations, and identifications of various investment influences.
To make you both a winner and an expert in investing!
Let's get straight to the point.
Sharing some insights from speculative trading.
At different stages of life, our experiences and insights significantly change our thinking.
The same goes for the speculative market. From the initial entry into this market to the first, second, and third years, each year brings different feelings, and the understanding and experiences of speculative trading continue to increase. Only through continuous reflection and summarization of the market can one gain insights over the years.
Today, I would like to share a few insights I have gained in the speculative market for your reference.
Success equals small losses plus various profits accumulated multiple times.
Avoiding significant losses is simple: make survival your first principle. When faced with dangers that hinder this principle, discard all other principles.
The way of trading is to defend an undefeated territory and attack the enemies you can win.
Many people perform exceptionally well in simulated trading, sometimes doubling their capital within a few weeks. However, once they start real trading, they often incur losses. At this point, their most common reaction is to keep researching technical analysis, constantly trying to improve their success rate, hoping to make money that way.
In fact, this approach is a detour and unnecessary. Typically, technical analysis accounts for only about 20% of the overall trading skill, and its importance is not significant. Many experts have low success rates yet can still make money consistently. If your simulated trading performance is excellent, it indicates that your skills are already very good, and there's no need to study further. You should focus on other aspects such as capital management, increasing positions, grasping long-term trends, etc.
You must stick to your good cards and reduce your bad cards. If you cannot hold onto your good cards, how can you compensate for the losses caused by bad cards? There are many quite good traders who end up giving back all their profits because they refuse to stop trading when losing money. When I am losing money, I tell myself: you cannot continue trading; wait for clearer market conditions. And when you have good cards, you must have the patience to hold them; otherwise, you will never be able to recover the money lost from bad cards.
One of the most common mistakes traders make is trading too frequently. They do not carefully select the right trading opportunities. When they see market fluctuations, they rush to trade, which forces them to trade rather than patiently waiting for good opportunities.
We are able to profit because we have patiently done a lot of work before entering the market. Many people, once they make a profit, become complacent about trading, and their operations begin to become frequent. The subsequent losses can overwhelm them, leading to significant losses, even erasing 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 stop-loss points at price levels that the market could easily reach. If your analysis is correct, the market should never retrace to the stop-loss price. If the market reaches the stop-loss point, it indicates that this trade was a mistake.
My worst trade came from impulse. Based on my trading experience, the most destructive mistake in trading is being overly impulsive. Anyone who trades should follow established trading signals and never hastily change their trading strategy due to momentary impulse. Therefore, avoiding impulsiveness is the first rule of risk control.
I have been trading for over 10 years, and if I hadn't learned to stay calm early on, I would have been driven mad by the ups and downs of my trading career. Traders are like boxers; the market can hit you hard at any moment, and you must remain calm. When you lose money, it means the situation is against 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 be greatly affected, and you must reduce your trading volume, waiting a while before considering the next trade.
Why can I achieve such a high profit rate? It's because I fear the market's unpredictability. I find that successful traders are often those who are cautious of the market. This fear of trading compels me to carefully select entry points. Most people do not wait for the market conditions to become clear before entering; they rush into the forest in the dark, while I always wait until dawn. I do not predict the direction of the market movements before they occur; I let the market tell me the direction of the movements. Choosing and waiting for foolproof opportunities before launching an attack is my most important trading principle.
Do not let the joy of making a profit cloud your judgment. Remember, the most difficult thing in the world is how to sustain profits. Once you make money, you will want to continue making more, and in doing so, you may forget about risks and stop doubting the correctness of your established trading principles. This is the root of self-destruction. Therefore, you must remain cautious at all times: be very careful when losing money, and be even more careful when making money.
Trading strategies must be flexible to respond to market changes, reflecting your highly cautious approach. Most traders often make the mistake of sticking to fixed strategies, frequently saying, 'Why does the market differ completely from what I thought?' Why should it be the same? Isn't life always filled with uncertainties? When your critical stop-loss point is breached, it is likely that you are encountering volatile markets or trend reversals. How can you continue operating under this trend? Therefore, you must be very cautious and wait for things to become clearer instead of recklessly continuing to operate.
Before entering the market, take a moment to think:
Consider how many professional skills you possess to support your battle in the market.
Think about whether your mindset can withstand the ups and downs of the market.
Think about whether your limited funds can handle unlimited opportunities and losses.
Sunken ships at the bottom of the sea all have a pile of nautical charts.
The most important factor for trading success lies not in the rules 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 made just a 5% profit each year, his total wealth growth 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 given 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 monitoring the market, which can lead to impulsive trading, sometimes resulting in multiple trades in a day, often without realizing their positions grow larger until they reach dangerous levels.
Overtrading not only increases your trading costs but also leads to losing oneself in the self-defeating cycle of trading for the sake of trading.
Seize the market trading opportunities.
There are many opportunities to profit from trading in the speculative market, but not every trading opportunity is worth pursuing because capital and personal energy are always limited. It is crucial to maximize the value of your funds and energy, which means you should only enter trades during significant market movements. A single profit should outweigh the total of several small trading gains, which saves energy while maximizing returns.
Focus on opportunities for price breakthroughs.
When prices break in the market, especially at key levels, it represents an important profit opportunity. When market prices have been in a prolonged consolidation state, any break upwards or downwards, accompanied by volume, is a good time to establish new positions.
Develop a trading plan and risk control strategy.
Speculative trading, under the influence of leverage, must come with trading risks. These risks can bring us fatal damage under leverage, so it is essential to prepare for various emergencies before trading, such as how to set stop-losses and implement position increases and decreases, which are crucial.
Summarize the trading mistakes you have made.
For every mistake made in trading, we need to record it in detail, delve into the reasons and related factors, and periodically check to see if we are repeating mistakes. This way, you can progress more quickly.
In the ever-changing world of cryptocurrency, do you often feel confused and lost? Don't worry; I will be your guiding light on your journey. Follow me, and together we will decode the logic behind the fluctuations in the cryptocurrency market, explore the potential of emerging projects, and find your own shining star in the vast cosmos of blockchain. I look forward to deep interactions with you in the exciting world of cryptocurrency and growing together!
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