What are the risks in the cryptocurrency world?
There are many risks. The biggest risk is that your contract will explode.
The most important thing in the trading system is risk control.
If you don't stop loss, you will lose everything.
The principal is more important than opportunity.
No matter what excellent asset it is, it will fall by 50-70%. Therefore, as long as human nature and the cycle remain unchanged, we will always have a chance.
Since I have deeply realized this and have seen this phenomenon repeatedly in the past 10 years, I have become more and more patient.
Therefore, for 99% of people, passive income cannot be relied on alone. Active income + passive income, the two wheels run together, and the wealth snowball will roll bigger and bigger.
Compound interest is the eighth wonder of the world. For example, it seems very simple to make money by speculating in cryptocurrencies.
If you have a principal of 1 million yuan and double your income every year, this income is theoretically extremely simple. After all, in the cryptocurrency world, people who don't have dozens of times of income every year are always looked down upon.
1 million yuan, 2 million yuan, 4 million yuan, 8 million yuan, 16 million yuan..... there will be 16 million yuan in four years.
But this is only a theoretical result of mathematics, and it is not easy to do in practice. So what interrupts your compound interest?
It is making a big mistake.
Missing out is not a big mistake. It is not a big mistake as long as you stop loss when you make a mistake. Only when you carry a high leverage order and finally cut your losses and blow up your position is it a big mistake. No matter how many times you have done it right before, as long as you make a big mistake once, the previous right will be 0, and the compound interest will be terminated.
This is why so many people have not made money or even suffered a huge loss even though they have not missed out on the market in the past few years.
In 10 big market trends, even if you miss out 5 times and make mistakes 2 times but stop loss, and only catch 3 times, you will still have ten times or even dozens of times of income. The reason why many people can't do it is because they make big mistakes and cannot accumulate compound interest in the losses.
This time you made double the money, but then you lost half of it when the market plummeted. What's the use?
If you forget to stop loss, you must close the position immediately after you find it. You must never expect to close the position after a rebound or correction or think about adding positions to spread the losses. Almost all big guys die in this regard. You can make it 10 times, but if you fail once, the previous 9 times will be reset to zero.
The market can make you multiply countless times
But it only takes one time to reset to zero
