I entered the circle from 50,000 to 100,000, then to 302,000. By the third year, I reached 590,000, and in August of the fourth year, I reached 3.78 million. By November, I was over 7 million, and in the previous years, I could easily withdraw 30 million from the crypto world!
During that time, I fell to the bottom; at that moment, I had reached around 4 million. I thought I could consider myself a big player in the circle, and I resolutely quit my job to focus on trading. I even borrowed money to trade. However, reality gave me a harsh slap in the face: the financial crisis made me not only give back all my profits but also owe a mountain of debt. I ultimately had to sell my house, and my wife almost left me.
That period was my darkest moment; in just a few months, I experienced a fall from the peak to the bottom. But it also made me realize that the previous smooth sailing was not without a component of luck.
Thus, I feel that if I really want to continue on the path of trading, I need to study diligently. Besides understanding basic knowledge, I should also analyze news and study technical indicators. If I do not conduct in-depth research and reasonably plan to manage my finances, my funds will eventually be exhausted. As a retail investor with no foundation, I will only joyfully enter and sadly exit.
The following three years, I severed all contact with classmates and friends, remained indoors day and night, tirelessly reviewing and sometimes sleeping on the keyboard. My hard work finally led to financial freedom through trading.
Beginner's guide to trading: how to avoid losing money?
I was once a beginner myself, recklessly entering the circle, chasing prices up and down. As a result, I lost all the hard-earned money due to my lack of strength.
I also once followed so-called teachers in the circle to do contracts and learn technical analysis. At a very critical point, I followed the teacher to short Bitcoin contracts, nearly suffering complete losses! I eventually realized that choosing the wrong guide and not systematically learning spot trading led to many detours and unnecessary struggles! Without solid professional skills and mental state, and without mastering the laws of the circle, it is very difficult to achieve sustained and stable profits through trading.
After many twists and turns, I ultimately chose to systematically learn natural trading theory. I also studied data analysis in the cryptocurrency circle, combined with volume-price analysis, and finally established a three-dimensional trading system suitable for myself, which is constantly being improved and practiced.
Before the bull market is about to come, in order to help more new beginners avoid the same mistakes I made, I specially compiled twelve guiding principles for beginners in cryptocurrency trading, hoping to help them grasp some trading rules and principles, avoid unnecessary detours and pitfalls, and accelerate the achievement of stable profits.
Back to the point, I ask beginner traders to carefully read, comprehend, and practice the following trading principles. Feel free to DM me on Twitter for discussions.
1. Only engage in spot trading, avoid contracts.
Spot trading is a slow and steady process. Contract liquidations mean a total loss. Newcomers to the circle often want to get rich overnight, exhibiting an impatient mindset without professional skills or guidance. Seeing others leverage contracts to earn money quickly, they also play with high leverage in contract trading. The result is rapid gains followed by rapid losses, ultimately leading to losing all capital or even going bankrupt, severely damaging their confidence.
There are numerous news stories about financial experts who, due to high leverage in contracts, end up with massive debts after liquidation and commit suicide.
Contracts are a zero-sum game. Compared to spot trading, they require more specialized skills and good mental state. If a beginner can't even handle spot trading well, they won't be able to win in the fierce competition of contract trading. It is essential to stay away from contract trading and focus on doing well in spot trading.
2. Invest with spare money, do not borrow funds for trading.
Trading is 30% skill and 70% mental state! For beginners, if you use your spare money to trade and get stuck or lose a small portion of funds in the short term, maintaining a calm mindset will not affect subsequent trading opportunities. In the end, you may be able to weather the storm and seize good trading opportunities. Conversely, if you are trading with borrowed funds, your mental state will be highly tense, making you prone to impatience and impulsiveness. Trading with such a poor mindset makes it very difficult to consistently earn money; even if you occasionally encounter good coins and make profits, you’ll ultimately face disaster.
3. The principle of following the big trend and going against the small trend.
Following the big trend addresses the issue of trading direction, while going against the small trend addresses the issue of entry points.
We all know that swimming with the current is easier and faster, while swimming against the current is very laborious and may even lead to regression. Trading is like swimming; it requires going with the flow. When the medium to long-term trend of the market is upward, buying mainstream coins on dips will make a profit, and even chasing the rise can also be profitable. Conversely, if the medium to long-term trend of the market is downward, even buying on dips is counter-trend behavior, and if you cannot withdraw in time, you will ultimately face significant losses or be stuck.
Therefore, trading must follow the medium to long-term trend direction of the market. When the market is in a bull market phase, be bold to heavily invest in the trend; when the market is in a bear market phase, learn to stay cash and rest. This is the principle of following the big trend. So, what is the principle of going against the small trend? When the big trend is upward, be bold to find a good entry point to buy on dips during a short-term decline.
4. The principle of entering on the right side and exiting on the left side.
Buying coins is divided into left-side buying and right-side buying, and taking profits is also divided into left-side selling and right-side selling.
As shown in the diagram, when the price is declining, choose to enter on the left side and buy in batches, such as at points A, B, and C. You might buy at the halfway point of the price or even at the lowest point. The left-side buying method is relatively aggressive and carries more risk, making it unsuitable for beginners.
Point D is the entry point for buying after the price of the coin breaks above the neck line of the W-bottom reversal structure and confirms on the pullback. It belongs to the right-side buying method. Although it may not be the lowest price point, it is relatively safe and has high certainty, suitable for beginners.
After buying coins on the left side, as the price rises, you should sell in batches: small rises, small sales; big rises, big sales, locking in profits. As shown in the diagram, selling at point E is considered a left-side selling method, while choosing to sell at point E after the price breaks below the upward trend line belongs to the right-side selling method. Beginners should prioritize the left-side selling method as it is relatively safer and maximizes profits.
The right-side buying and left-side selling methods may not eat the whole fish from start to finish, but you can still enjoy the fleshiest part of the fish, accumulating small victories into a big success.
5. The principle of trading new coins rather than old ones.
Coins in exchanges are categorized as new coins, new coins (recently launched), and old coins. Newly launched coins on exchanges are called new coins, coins that have been on the market for a few months are called new coins, and those that have been on the market for more than half a year are old coins. Traders with larger capital should prioritize investing in mainstream coins like Bitcoin, Ethereum, and SOL.
Traders with smaller capital, including beginners, should place their larger profit opportunities on new and new coins. Why trade new coins instead of old ones? Because old coins, unless there are new technological breakthroughs or new narrative drivers, will invite new speculation opportunities; otherwise, investors are already well aware of them, and there are no fresh stories to tell. They have already been speculated on multiple rounds, and the trapped positions are quite severe, making it difficult for major institutions to lift the price and attract market capital’s attention.
New and new coins with new technologies, new tracks, new narratives, and new token models easily attract investor attention. When new coins and new coins complete bottom-building and break upward, there are relatively few trapped positions, making it smoother for major institutions to raise prices. Once they break through historical highs, the potential for imagination and profit margins becomes larger, leading to greater opportunities for profit. Based on my long-term observations of new coins being listed on exchanges, I have summarized the basic operational model of new coins that follows a six-step approach.
1) A few days after launch, a spike and a pullback.
2) Continuous decline and probing the bottom, sadly ignored;
3) Continuous bottom-building for several days, starting to warm up.
4) Gradually rising and exploding, attracting attention;
5) Coin prices repeatedly reach new highs, and the market goes crazy:
6) Institutions distribute chips, leaving a mess.
Some beginners choose to chase high prices immediately after new coins are listed on exchanges. This approach of chasing highs easily leads to being trapped and carries a high risk of loss. Buying when new coins successfully break through after completing the bottom in the third phase is a more certain and safer right-side buying method, which is more suitable for beginners and conservative traders. Personally, I also prefer the right-side buying method for coins.
The above is the content of the first part of the guidebook for beginners in cryptocurrency trading. Next, I will continue to work on the second part, which will be published on Twitter. The outline is as follows.
Outline of the second part of the guide for beginners in cryptocurrency trading:
7. The principle of entering the market with half a position.
8. The principle of five major entry points for buying.
9. The principle of setting stop-loss to preserve capital.
10. The principle of not trading frequently or impulsively.
11. The principle of avoiding short-term trading for swing trading.
12. Persist in learning and integrating into excellent teams.
If you can't control your hands, liquidation will become a habit!
1: Don't overly trust your instincts. Don't just listen to what others say; instead, observe what is happening in the market.
2: Basic knowledge is still necessary, such as what a standard lot is, what spreads are, what commissions are, and concepts like MACD, KDJ, moving averages, Fibonacci retracement lines, etc.
3: Maintain a good mindset; making a profit is normal. (Note: You also need to understand some basic knowledge.)
4: Communicate more with experienced investors, learn from their trading methods, techniques, and experiences.
5: Lastly, of course, continue to learn investment knowledge and enrich yourself, and summarize daily. As the saying goes, practice is the only standard to test truth. Only through a lot of real trading can you truly consider yourself a part of the trading world.
Each of the above points is very difficult to achieve and requires a long period of practice. There is a long way to go from understanding to implementation.
Five Useless Laws in the Cryptocurrency Circle:
1. Knowing how to buy but not how to 'heavily invest' is useless.
2. Knowing how to heavily invest but not being able to hold it is useless.
3. Holding onto coins until the end of a bull market without selling is useless.
4. No heavy investment trends are useless.
Heavy investments that cannot be held are useless; the market can multiply your investment countless times, but it only takes once to go to zero.
Ride the fastest horse, wield the sharpest sword, drink the strongest liquor, and climb the highest mountain! Here, penetrate the fog of information, and discover the real market. Seize the opportunities of the leading coins, find truly valuable opportunities, and don’t miss out on regrets!
Comment 333, no long attachments!!!