I have been trading cryptocurrencies for 10 years, and have been a professional trader for 6 years, totaling over 1800 days. Starting with a capital of 200,000, over these years, I have experienced various pressures, pains, and confusion, ultimately achieving great enlightenment, simplifying trading techniques, and successfully withdrawing 4,800 in just three years.
Ten thousand!
My cryptocurrency + trading journey (Five stages of trading growth)
1. [Entering the Crypto Circle]
When I first entered the crypto circle, I, like everyone else, bought coins based on luck, purchasing whatever coin looked good. I don't know if it was luck or if novices get a grace period, but in the first half of the year, my assets grew by several times. At this point, I became arrogant!
However, it has been proven that when a person becomes overly pleased, it can be the moment they stumble. Reality can mercilessly slap you twice in the face. When my assets were halved in one order, I realized that the trading market is ruthless, and good fortune will not always favor you!
2. [Learning the Techniques]
After the biggest trading loss, I realized that relying solely on luck is not a long-term strategy; the goddess of luck will not always favor you.
At this point, I realized that trading requires practical professional knowledge and analytical abilities. I began to reflect and learn. Reading relevant books, being active on various information platforms, seeking opportunities and trading perspectives, and then combining technical indicators to build my trading system.
If you are just entering the crypto circle and have the favor of the goddess of luck, this is your best opportunity to learn! During the novice protection period, learn more skills to improve your analytical abilities.
But when I felt I had learned enough in terms of technique, my assets did not achieve explosive growth. However, I no longer faced excessive losses and had the ability to withstand risks. Although trading techniques are not always effective, they have given me a deeper understanding of the market. At this point, I began to seek the true essence of trading.
3. [The Enlightenment of the Way]
When I realized that different trading indicators and systems are not the key factors determining profits and losses, I began to focus more on the psychology of trading. I found that many times, profits often come from decisiveness and waiting, rather than rushing trades and frequently opening positions. This actually reflects the psychological state when first entering the crypto world.
At this point, I understand that predicting the market is incredibly difficult. Therefore, we need to become an independent trading system, following our own trading logic. Gradually learn position management and leverage allocation, and calculate returns on a monthly basis, no longer fixating on the gains and losses of individual trades.
4. [Gradually Stabilizing]
When you have a clear trading logic and a complete trading system, under the above principles, clearly accept both losses and profits. Achieve the goal of small losses and large profits, becoming a stable trader and investor. At this point, you will gain recognition and respect from others, becoming a 'teacher' in others' eyes.
At this moment, only some black swan events can impact your trading logic. However, black swan events are always rare, and your trading logic is something you must adhere to.
5. [Skillful Handling]
When trading reaches a level of mastery, handling indicators and market conditions becomes fluid. Profits and losses become a matter of course, and emotions gradually stabilize. You have an intuitive ability; trading no longer excites you, but you aim for continuous profitability. At this moment, I gradually take on the appearance of a trader, possessing patience, perseverance, and trading wisdom that surpasses most.
The road of trading requires continuous learning and progress. From just entering the crypto circle to becoming proficient, only by constantly honing your trading system and understanding the principles of trading can you achieve stable profits in the market. No one is completely free of losses in trading, but being able to manage small losses while making big profits is our learning goal.
Once you have an epiphany, your trading career feels like you are using hacks!
1. Rising does not imply a peak, and a correction does not imply a bottom. Many things we think about differ from the reality. There’s a saying that people are always overconfident, which can lead to suffering. This saying applies to the market as well; people often think they are at a turning point, but they are often still in a continuation pattern. They always think the rise is about to end and get off the bus too early.
One judgment criterion is that if the upward trend of the fundamentals has not ended, you must hold on. If the overall market has entered a correction period, no matter how tempting the value seems, do not try to catch the bottom.
2. Even with a small position, you must diversify your positions. The model is a system, while the content is about how to do it, rather than relying on feelings to act on a whim. Sometimes with a small position, one might think it doesn't matter, which leads to randomness and repeated mistakes. Risk control determines how long you can survive in this market.
3. When an opportunity arises and you need to choose between two or three options, don't hesitate; buy them all. Trust your luck. Don't put all your eggs in one basket, or else you'll easily find that the ones you picked barely moved while the ones you didn't have already taken off.
4. For long-term trades, don’t focus on emotions; primarily focus on fundamentals. Choosing the right upward track is the key point to consider, such as how many benefits there are from halving, ETFs, interest rate cuts, upgrades, and these are all clear benefits. If the fundamentals are good, don't hesitate.
5. Fear of heights makes one miserable. It's not wrong to fear heights; the mistake is to refuse to cut losses during a downturn, and when a reversal comes, to not be able to hold on even after a little rise. This is called operational deformation; mindset is greater than technique. If you run at the first sign of an increase, then what is the purpose of coming to the market?
6. No one is perfect; learn to reconcile with yourself. Making mistakes is not scary; what's scary is the endless self-blame after making a mistake, getting trapped in emotions is unnecessary. Focus on the profit-loss ratio, strengthen execution; if you can't afford to lose, you can't afford to win; it's just the positive and negative sides of an event!
How to achieve stable profits in Bitcoin contracts? I use a single MA5 moving average which has a high win rate. This is a top-secret technique for Bitcoin contracts.
For friends who only trade spot, they might see us contract traders as gamblers. But I do not agree with this point; I believe that contracts are a good tool. They make our trading more flexible; at least theoretically, one can profit from both rises and falls, which offers more opportunities than relying solely on rises.
Having many opportunities is very important for traders. Because everyone's time is limited, having more opportunities within that limited time is precisely what everyone pursues. We continue to stay in the crypto circle because there are plenty of opportunities, so I personally do not resist contracts.
Of course, in actual operations, many coin friends suffer from losses in both directions, and various tragic stories happen from time to time. One reason is that investing is always a matter of one profit and two losses. Therefore, it is destined that most participants in any market will ultimately lose money.
Another reason is that the difficulty of playing contracts is very high.
Thus, it further reduces the overall proportion of making money. Therefore, in order to play contracts well, having a complete trading system is very important. For newcomers in the circle, I do not recommend them to play contracts because the requirements are too high for them.
For newcomers, participating in contracts is both a financial and physical strain.
The contracts themselves aren't the problem, so we primarily need to think about how to play them well.
The first step in risk control: position management. Position management can be discussed extensively; here I will only talk about my own position management.
Firstly, I divided my large positions into three: the first is the living position, which is to always keep a part of the money to ensure basic living expenses. Here, I basically keep the most secure fixed deposits. This ensures that in extreme situations, the other two positions won't lead to poverty, allowing for normal living. Doing this step gives you peace of mind, allowing you to invest spare money and embark on your journey with ease.
Second: Business position. Since I also have other businesses to manage, I will leave a certain amount of funds to handle them. This part is primarily liquid cash, such as keeping some in a savings account.
Third: Investment position. For me, the investment position is basically for the crypto circle. Because I only trade cryptocurrencies, not stocks.
As for how to arrange these three position ratios, I won't elaborate here. Everyone's financial situation, personality, etc., are different, so how to allocate will also differ. My situation is just a reference for everyone.
Then the investment position can be further divided into smaller positions.
Currently, the spot position is about 80%. The contract position is 20%.
As for the spot position, I personally am a bull, firmly believing that there will be a great bull market. So, in most cases, I hold a full position of coins. Generally, I don’t operate much; sometimes I make some adjustments. For example, sometimes I switch to more BTC, and sometimes I hold more mainstream coins. The overall goal is to have more BTC that can be exchanged in my account. Whether this part can make money purely depends on whether the future is good or bad; it’s essentially paying for my understanding.
As for contract positions, I generally do not exceed 50% when opening a position. The reason is simple: I need to ensure that even if there is a liquidation, there will still be opportunities to continue trading. So basically, I avoid all-in strategies, and instead adopt a steady approach, not seeking quick wins, but instead aiming for annual profitability.
At the same time, contract positions are divided into trend positions and short-term positions. A trend position means holding onto it in a laid-back manner until I believe the trend has ended before closing out. The advantage of a trend position is that once it makes a profit, it is easy to earn a large wave, but it often oscillates back and forth like a roller coaster, resulting in a lot of effort for little gain. Moreover, for someone like me who enjoys trading, it lacks some of the fun of trading, so I also need to allocate some short-term positions, which are used for back-and-forth swings. However, over the long term, profits from short-term positions still cannot compete with those from trend positions, so overall, trend trading is more worry-free and more likely to yield higher profits.
The above is a simple position management method I personally use. Through this allocation, there will basically not be a true liquidation. I believe that so-called position management should not be limited to just contracts; it must be expanded to the larger system of life to maximize its effect. Good position management directly determines whether you have a good mindset, and a good mindset is the beginning of success.
Of course, many friends will say, I don't have that much money, and it's precisely because I have little money that I came to the crypto circle. Without hard work, it's impossible to turn things around. How to say in this situation? Money accumulates slowly. As long as you can be stable, then slow is fast; being impatient won't help.
Position management is the most important point in my opinion. The ultimate aim is for us to survive in this market for a long time and to ultimately be the last one laughing.
Of course, when it comes to placing orders, everyone is most concerned about how to judge the market's rise and fall.
There are too many market analysis methods and indicators. So far, I believe the most useful, simplest and least complicated method is the 5-day moving average strategy. Everyone can review the BTC trend; essentially, if you follow the MA5 strictly without knowing anything else, you won't lose money in the long run. The simplest strategy is: when the 5-day moving average turns upwards, go long; hold as long as it doesn't break below the 5-day line. If it breaks below, close long and go short; if it doesn't return above the 5-day line, don't close your short. If the 5-day line goes flat, clear your positions and don't participate in trading, don't bet on direction. It's that simple and brainless. If you operate with a 5x leverage and persist over the long term, your win rate will definitely be very high, and you'll be able to capture most of the trend movements...
However, often the simplest things are the hardest to do, because guessing peaks and bottoms is more stimulating, and succeeding gives a greater sense of achievement. Including myself, I often let subjective judgment dominate, leading to significant losses.
The 5-day moving average strategy cannot let people buy at the very bottom or sell at the very top, but it can avoid buying at the bottom or selling halfway up. In any case, I find it very practical and simple. Whether it works or suits you, everyone can go try it out.
The following two images are the BTC trend charts from 2019 to now. The self-color line is the daily MA5.
Basically, combining moving averages with candlesticks, then integrating MACD, Bollinger Bands, KDI, and big data from contracts, market sentiment, and other indicators can help maintain a high accuracy rate for judging major trends.
As for the short-term direction, the ability to sense the strength and weakness of the market will be relatively high, which is commonly referred to as market sentiment. This mainly relies on long-term observation to develop.
However, when it comes to playing contracts well, predicting price rises and falls correctly is not the most important factor. Many players actually have a high win rate, but after years of hard work, one mistake can bring them back to square one, leading to the issue of stop-losses.
Regarding stop-losses, it's difficult for many people. I've also walked this path as a novice, experiencing all the mental states everyone goes through, and many issues I continue to face. Firstly, having a stop-loss is essential; we can't control how much we can earn after opening a position, but we can control how much we lose with a stop-loss. As the saying goes, 'The green mountains remain, so there's no fear of not having firewood.' As long as the principal is intact, there's hope. Losing everything due to a wrong judgment is the most regrettable.
Although each stop-loss reduces the principal, it gives us one more opportunity to get it right. Sticking to stop-losses creates opportunities for ourselves, thus increasing the chances of breaking even or even making a profit. If you can't hold onto profitable trades and stubbornly hold onto losing trades, it will ultimately turn into a process of making money, but losing everything will be the result.
Based on my own experience, many times we are not unwilling to stop-loss; often, we have set stop-losses. However, when the market truly moves, we may temporarily cancel our orders due to various complex emotions, thus missing the best stop-loss point, leading to deep losses that ultimately become dead holds. Of course, there will also be instances where we didn't stop-loss and managed to recover, so due to a few successful experiences, the mentality of taking chances will always exist, resulting in the failure to discipline stop-losses.
For this point, the only solution is to think about the stop-loss level before placing an order, and then act. After opening a position, immediately set the stop-loss. Then don't let a few wrong stop-losses shake your confidence; persist long-term, and mechanical execution is all that's needed. Looking at it over a long period, it will definitely be better than not using stop-losses. I have already practiced this with real money; losing money is the only way to progress. Standing on the shoulders of those who have lost will allow you to progress faster and lose less.
There may still be a few instances of breaking discipline in the early stages. My personal method is: after each violation, write a reflection of over 500 words, analyzing your thoughts at that time in detail. After writing several times, you'll find that they are almost the same, and after repeating a few times, you'll gradually change.
Of course, if we expand on the issue of stop-losses, there is much more to discuss. Due to time and space constraints, I can only mention it briefly here. Next time, I hope to have a chance to exchange ideas with you more deeply.
To summarize regarding contracts, I believe the most important aspect for most people is position management. Good position management can lead to a good mindset, and a good mindset is half the success.
Secondly, strictly execute the stop-loss plan to minimize losses for possible high returns, protect the principal well. With many opportunities available, if you catch a big wave, you may have the chance to turn things around.
Lastly, a very important point is that after making a large profit within a certain period, always remember to withdraw in a timely manner. Especially when operating in one direction, whether bullish or bearish. Because the investment market often sees joy turning to sorrow, dangers often arrive quietly when one is least aware. Only withdrawing is the best way to control drawdowns.
Trading is like life; improving trading skills is also a process of cultivating one's character. The path of cultivation has no end. Thinking more, reflecting more, and reviewing trades can bring great benefits. In the road of trading, there is you, there is me, and may good fortune always be with us.
How to make big money in cryptocurrency trading? Is it too late to enter the market now?
The crypto circle is not lacking in opportunities, but life only comes once. Don't underestimate the volatility of spot trading, especially core mainstream assets. This position must be held. Before accumulating enough trading experience, only play spot trading. Stable profits in spot trading are the first step; do not start with difficult contracts.
When you have not completely mastered trend trading, do not attempt to go long and short simultaneously, because trends have inertia. Just because you see a bearish trend does not mean it will immediately reverse to a bullish trend. You must trade in bullish trends and bearish trends. If you cannot make money in both trends, focus on perfecting one trend, protect your own territory, and do not be greedy by trying to go long and short simultaneously, which could lead to losses in both directions.
Many people think that only through operation can one make money, but the core of making money lies in not operating, patiently waiting, and after opening a position with profit, holding patiently. Operating can bring the pleasure of feedback, while waiting is very counterintuitive.
In the market, 80% of the trends are psychologically challenging; they may feel great, but the things that feel great are certainly not going to make you money, at least not big money.
Big profits are definitely a combination of luck (big market) and self-awareness (the part that can be improved).
No matter how good you are, without a big market, you cannot make money.
In the crypto market, learn more and look forward to catching the next big trend; there will always be one or two every year.
Trading investments are similar; opportunities generally come in waves, and in a few years there will be a major one. In life, you only need two bull markets; you only need to become rich once.
What you need is to catch the bull market, not to get entangled in the bear market; all minor opportunities are meaningless to you.
To change one's destiny, one must rely on the bull market or the right timing.
Because only in a bull market or at the right time can most people make money; only then can you make money.
Go all out to prepare; otherwise, when the market ends, reflecting on the entire market, it will feel like a wasted effort.
The above are some heartfelt words summarized over ten years, hoping to inspire those who have the fate to see this article, allowing everyone to make fewer detours. Don't think that trading cryptocurrencies is a difficult thing; I can clearly tell everyone that I have never found it difficult or tiring. On the contrary, I really enjoy the joy that trading brings me, just like those who play games; do you think they feel tired?
A single tree cannot form a boat, a lone sail cannot sail far! In the crypto circle, if you don't have a good circle, and no insider information, then I suggest you follow me, and I'll guide you to make easy profits, welcome to join the team!!!
