Author: Leader of Local Coins · Guiding Light of the Crypto Sea · Eastern Saint
Once you enter the crypto world, it's like deep water. Three minutes in, and you're crying over your liquidation. Many young people come to this guiding light, messaging it:
"Brother Light, I just entered the circle, why do I keep losing?"
The leader of the local coins never comforts; he only asks young people three questions:
Do you buy short when prices rise a lot and buy long when they drop a lot, getting played by Wall Street every day?
Do you enter the market without setting a stop-loss and not taking partial profits?
Do you increase your position every time you incur a loss and take profits as soon as there's a slight gain?
Don't be shy; 99% of young people have done this. The leader of the local coins has summarized the five most common trading misunderstandings that easily cause young people to suffer painful losses. Today, I will explain them all at once!
Misunderstanding One: Always going all in, trading like it’s a battle.
You’re not fighting for your life on the battlefield; you don’t need to determine victory or death. You’re investing, accumulating profits while minimizing the maximum drawdown is the goal. You must refine your trading system.
Going all in is just a gamble on win or lose, not a strategy!
Experienced traders usually take small positions to test the waters, while people like Liang Er Gou go all in and end up losing everything. They have fun money and don't worry about not having chips, what about you? Do you have a sponsor?
Reminder: Don’t be fooled by the thrill of going all in and winning; once you taste success, your trading career has already been sentenced to a suspended sentence.
Misunderstanding Two: No trading plan, completely driven by emotions.
When you incur a loss, you increase your stakes hoping to recover everything at once; or you hesitate, afraid to bet, and even if you do, you can't hold on, taking profits at the slightest gain and only nibbling on the edges of the market.
This "emotional trading" can be described nicely as intuitive trading, but harshly as buying lessons with real money.
Reminder:
Plan your trades, execute your plans, don’t be a slave to emotions; be a friend of probabilities. You must refine a trading system with a positive expectation that can withstand an entire bull and bear market cycle.
Misunderstanding Three: Staring at the market on your phone, your emotions manipulated by the candlesticks drawn by Wall Street.
Even when sleeping, I am thinking about the market, my heart races at the sight of a candlestick.
Trading is not about endurance; it’s about strategy.
Young people often don't lose due to skill, but due to emotions.
Have young people ever had this experience? Staring at the candlestick chart, even if the direction is judged correctly, it is easy to be thrown off the train. Sometimes you go to sleep and wake up to a seafood feast. But if you look at the candlestick trajectory, you will find that if you had stayed awake that night, you might not have been able to hold on.
Reminder:
The market is a marathon that never ends; you need to learn to rest to run further. Once your strategy is set, let time determine the outcome, and don’t change it midway.
Misunderstanding Four: You rush to take profits on floating gains but hold on to floating losses. Your win rate is high, but one wave of drawdown brings you back to square one.
You rush to sell when there's a 1% gain but hold on through a 20% drop.
You're not trading; you're just running alongside.
If you keep this up, young people will find that they make small profits but suffer large losses, and their accounts will keep getting emptier. Each major drawdown will make you doubt yourself and shatter your confidence.
Reminder:
Setting stop-losses at resistance levels and taking profits at support levels in batches is more reliable than relying on improvisation.
Misunderstanding Five: Following others’ trades everywhere without honing your own trading logic.
These days, there are too many 'calls', it's easy to follow trades but hard to think independently.
When others win, it's because of their system. If you follow in without a stop-loss, you're just giving away money. I’ve also brought along a group of young people, and I found that even with precise points, some of them still lose money. Later, they realized that they had no concept of position management and thought that precise points meant they could all in every day, eager to recover losses. Some even multiplied their money tenfold in a month. When faced with extreme market conditions during a bull-bear transition, they lost all profits and even saw their principal cut down, turning countless nights of hard work into bubbles.
Reminder:
Copy trading is not bad, but young people need to know how to enter and exit, and where the risk control boundaries are. Remember that there are opportunities every day, you can't earn everything, but you can easily lose it all. A 1% liquidation risk is still a risk; you need a formula for your maximum bet size. I will write a separate article on this formula when I have time; it is very important.
In summary:
The mistakes you make in the market will be taught to you with money.
The leader of the local coins just hopes that young people can pay less tuition and gain more insight.
Follow the leader of the local coins.
This guiding light not only gives you fish but also shows you what's under the water.
If young people find this article enlightening, give it a like and follow.
Leave a message to the leader of local coins telling him what pitfalls you’ve fallen into.
The next article from this guiding light will continue to 'cut through the fog' to help you build a trading system!
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Leader of Local Coins · Guiding Light of the Crypto Sea · Eastern Saint