The primary issue is that the emotional factors of human nature often take precedence in trading. Especially when faced with profits, this emotional aspect becomes particularly obvious. When there is a slight profit, many people are eager to take profits and exit, fearing that the profits will vanish; yet, when facing losses, they tend to cling to hope, stubbornly holding on, always believing that the market will turn around until they eventually face liquidation. This is a common weakness of human nature, and it is not surprising. It is precisely because of this that the presence of professional traders becomes particularly important. They can help investors regain rational thinking and reassess trading decisions. Of course, those so-called 'traders' who only make investors hold their positions blindly are exceptions.
Secondly, position management is a key aspect that cannot be overlooked. Before making any trade, we should first ask ourselves: What is the maximum loss I can tolerate? Only by clarifying this can we reasonably determine the position size and stop-loss level. Once these plans are made, there is no need for frequent unnecessary adjustments during the trading process. If a stop-loss is triggered, then reassess the market and develop a new trading plan. As long as this can be achieved, investment performance usually won’t be too poor.
Furthermore, the issue of following trades is also worth discussing. Some investors, when they first start following trades, immediately conclude that the trader is incompetent upon encountering a single mistake. However, it is important to understand that the trader analyzes market trends based on their professional knowledge and rich experience in the crypto space, and does their best to manage risks, minimizing them. However, no one can guarantee that every judgment will be accurate; even industry giants like Zhao Changpeng (CZ) and George Soros cannot win every battle. Those who claim to guarantee no losses are undoubtedly exaggerating.
I believe that many people have experienced the above situations and can empathize. Those who become rich quickly in the short term either have exceptionally good luck or achieve it through repeated high-stakes gambles. However, this method comes with extremely high risks; if one cannot bear high risks, wealth must be accumulated over time. Just think about it: working hard in a factory all day might only earn two to three hundred yuan, while in the crypto space, sometimes one can easily earn seven to eight hundred in a day. Why are people still not satisfied and wanting to earn more?
These are all issues that must be faced and resolved after entering the crypto space. If one cannot effectively control their behavior and desires, making a profit in the crypto space will be very difficult. This is also the reason for the existence of the so-called 'Pareto Principle' – the number of people who can self-control is indeed few. If one cannot achieve this themselves, they need to find a suitable teacher to guide and assist them, so that they can possibly become part of the '20%' that profits, rather than the '80%' that incurs losses.
Of course, the points I have elaborated on are not exhaustive. In the actual trading process, various problems will arise that we need to solve. I have only selected the most important issues for focused analysis, hoping it can be helpful to everyone.
I wish everyone can achieve their profit goals in the crypto space, and I look forward to meeting at the peak of success in the future!