During my days in the cryptocurrency world, I was that typical 'impulsive retail investor'. Whenever I saw a dramatic price surge, I would become envious and could not control myself, always eager to open short positions, thinking to myself: 'This rise is just too outrageous; it must drop soon!' Especially when there was a slight price pullback, I felt like I had grabbed a lifeline, confidently increasing my short position, completely unaware that danger was approaching.
Reality gave me a resounding slap in the face. Every time I opened a short position, it almost always ended in liquidation; five consecutive liquidations quickly deflated my wallet, and the sense of despair and helplessness is still unforgettable.
One of the most painful experiences still lingers in my memory. At that time, I saw the price of a cryptocurrency skyrocket by 600%, and I was convinced I had found the 'ceiling', thinking this was a perfect short opportunity. So, I recklessly opened a full position shorting with 40 times leverage. Who would have thought that this cryptocurrency would behave unpredictably, directly breaking through my perceived limits and skyrocketing another time! In that moment, my heart sank; I felt like I was being mercilessly toyed with by the market and even had desperate thoughts of 'hitting rock bottom'.
After experiencing these painful lessons, I finally summarized a life-saving principle: on the day of a dramatic price surge, absolutely do not short. Even if it has been rising for several days in a row, one must patiently wait until the first daily candlestick closes bearish before attempting to short at a high position with a light position.
In the cryptocurrency market, never go against the trend. Those coins that rise rapidly are like wild horses that cannot be predicted for their upper limits. A surge does not mean it has peaked, and shorting is by no means a belief worth clinging to. In this uncertain market, setting reasonable stop-losses is the only truth that can help us survive in the cryptocurrency space.
As retail investors, our funds are hard-earned and should not be used out of spite. The market does not care about our emotions; we must respect the trend. When you blindly short, you are only venting emotions while the market continues to rise according to its own trend. Only by remaining clear-headed and respecting the market can we protect our principal and go further in the cryptocurrency space.