$LPT 90 million in ten years of cryptocurrency trading! The iron rule of the cryptocurrency circle, forged with blood and tears. Someone asked me if cryptocurrency trading can make money? I took a screenshot of my bank balance: Look carefully, this is 90 million in ten years!
With 10,000 yuan as capital, can you become a millionaire in ten years? It is possible, but the probability is less than 5%. The cryptocurrency circle has indeed created a lot of wealth myths, but it is definitely not the case.
Most people end up losing money. Whether you can achieve your goals depends on strategy, luck and execution.
1. Three core ways to create millions of wealth in the cryptocurrency world
1. Betting on the next Bitcoin (super high odds, very low probability)
Case: Buy Bitcoin in 2010 (0.1 at the time), hold it until 2021 (0.1), hold it until 2021 (60,000), 10,000 becomes 600 million.
·Reality:
99.9% of altcoins will return to zero, and finding the next BTC is harder than winning the lottery.
Suggestion: If you bet on this direction, you can use a small amount of money to disperse and bet on 10-20 emerging projects (such as Al, Depin, and RWA tracks), but be prepared for zero returns.
2. Bull market cycle swing trading (high odds, medium probability)
Case: In 2020, with a capital of 10,000, you can seize 3-5 doubling opportunities during the DeFi Summer and NFT craze, and make a million within three years.
·key:
Only operate in a bull market (e.g. 1 year after Bitcoin halving).
Focus on mainstream currency bands (BTC/ETH/SOL, etc.) and avoid Dogecoin.
·Strictly stop loss to avoid losing all in a bear market.
3. Contract leverage compounding (high risk, high return)
Case: Use 3-5 times leverage each time to accurately grasp the trend, with an annualized return of 200%+, and a compound interest of up to one million in ten years.
Risk: A single liquidation can wipe out all your positions, so extremely strict discipline is required.
Suitable for people who already have a mature trading system.
2. Specific calculation: Feasibility of turning 10,000 into 1 million
Note: The above is a projection of historical data, and future returns may be lower (the market is gradually maturing and opportunities for huge profits are decreasing).
3. A more realistic path for ordinary people (balancing risks and rewards)
1. The main warehouse is Bitcoin and Ethereum, and the small warehouse is a copycat
80% of the funds are invested in BTC/ETH (the probability of 5-10 times in ten years is high).
20% of the funds are bet on 3-5 altcoins (such as SOL, TON, and AI sectors).
2. Only play in bull markets, short positions in bear markets
The golden window is 12-18 months after the Bitcoin halving (e.g. 2025).
In a bear market (e.g. 2026-2028), hold cash or stablecoins for financial management.
3. Never touch these "suicidal behaviors"
XAllin - altcoin
× High leverage (more than 10 times)
· Speculate on cryptocurrencies based on news
4. Key conclusion: Can you accept the worst outcome?
Best case scenario: 10,000 becomes 1 million (requires luck + skills).
Most likely scenario: 10k becomes 50k-200k (if focusing on BTC/ETH bull market trading).
Worst case scenario: 10,000 goes to zero (playing with contracts or altcoins).
suggestion:
1. Use spare money for investment without affecting your life.
2. Learn first and then practice to avoid paying too high tuition fees.
3. If you are looking for stability, it is better to invest in Bitcoin.
The cryptocurrency world can make people rich, but it is even better at creating dreams. Do you want to bet on miracles, or take the sustainable route?
It is important to stick to your own thinking. The cryptocurrency market is still very small, and there are not many trading counterparts. The essential reason for being able to make money is to stick to your personal thinking. If you just go with the flow and follow orders, you'll be lucky if you don't lose money. It's extremely difficult to make money.
Therefore, contract trading must strictly abide by the trading disciplines that you set. Don't be greedy. Unfortunately, you can't be complacent because of a profit from not complying with the rules on a certain occasion, nor be upset because you missed the market because of complying with the rules on a certain occasion. Discipline is ironclad, and discipline is the bottom line. No matter when, strictly abide by it.
All of this is to do a good job of risk management and reduce the probability of fatal errors. If you stick to the following points, making money will be a high probability event:
1. Reduce leverage
The actual leverage of the position must be controlled to not exceed 2-3 times. Of course, it is best to be around 1 times. And if it is a full-position mode, take-profit and stop-loss must be set to prevent the full position from being blown up due to large fluctuations like 9.25.
2. Learn to stop loss
This is very important. Let me repeat it again. A lot of money lost by retail investors is not due to stop loss, but due to liquidation. Market fluctuations are unpredictable. People who can make money basically make more money when they are right and lose less when they are wrong. Stop loss is to help you lose less when you are wrong. So it is the same for retail investors. If you make a mistake, you must admit it in time and stop loss. You must not place orders. Set a loss ratio that you can bear, such as 15%, 30%, depending on your own situation. When you reach the maximum loss ratio, don't wait for luck, and don't think that you have lost so much anyway, so you can bear it. In a word, you must stop loss no matter what. You may not feel it once or twice, or sometimes you may find that you should not stop loss after stopping loss, but you will taste the sweetness over time. For example, before September 25, you kept opening more, although it was easy to hit the stop loss. You would feel very sad every time you stopped loss, but after looking at the market that night, how many people had 2-3 times leverage liquidation, you should be glad that your stop loss was so wise. In a word, stop loss is just cutting a part of your losses, but not stopping loss is equivalent to suicide.
3. Reduce the frequency
There is no need to explain this. Everyone should understand that the more you do, the more mistakes you will make. If you happen to suffer a large loss when you make a mistake, it will be even worse. Therefore, when it comes to trading, try to do the right thing, reduce the frequency of trading, try to seize opportunities with high probability, make fewer mistakes and suffer fewer losses. This is good for both profit output and mentality adjustment.
4. Fund Management
I think money management is the most important thing in trading. Mastering a good money management strategy can protect your principal, reduce drawdowns, keep profits, and ultimately increase your risk tolerance several times. Money management determines whether you can make money, and it is also the lifeline for the long-term survival of the trading market.
Here are a few rules to talk about separately.
(1) Never keep your capital in a position that is not fully invested.
Even if you leave 10% of your funds in short positions, you will be grateful for the discipline you have followed under extreme risks. I usually leave 10-20% of my funds in short positions, and occasionally do short-term copycat trading, usually within 24 hours, and then I will just make a profit;
(2) Contracts and spot transactions must be separated, which is considered risk isolation.
The spot part cannot be leveraged, and the currency leverage is not allowed. The profit is just from the rise of the spot price. The contract part can account for 20-30% of the total warehouse funds. In a very certain trend market, it does not exceed 50%. The contract part is operated with low leverage, anchored to the currency standard income. After being able to make stable profits in the contract market, the currency standard income is also considerable:
(3) Avoid excessive dispersion of funds.
Just concentrate your funds on a few relatively strong coins, don't spread them too thin, and reduce the number of simultaneous trading targets. For example, don't think about opening Bitcoin, Ethereum, EOS, and Litecoin contracts at the same time. That's what experts do, and their goal is to maximize profits. We retail investors first pursue profits, not maximization, and operating too many targets will only increase risks, not magnify profits. Therefore, it is best to concentrate your firepower on the basis of improving the winning rate. Doing so will easily generate profits, and make money much faster than dispersing funds to do a few targets.
5. Reflect frequently and summarize more
The whole trading process has only a few steps. Determine the long and short direction -- find the entry point -- determine the size of the opening position -- add positions according to the market -- stop profit and stop loss. Basically, these are the steps. After a transaction is completed, reflect on it frequently. During the whole transaction process, focus on the link where you are weak. Make sure you have good disciplines to follow and execute in different transaction links. Summarize the successful experience and lessons in the transaction. If you persist for a long time, you will definitely gain something.
The above is what I want to express about contract trading. I did not talk about the skills and strategies of opening orders, but chose these seemingly common ideas and concepts. It is not because the skills and strategies are not important, but I think these basic thinking are more important, more practical, and must be mastered. They are like the foundation of a building. Only when the foundation is solid can the attic above be more beautiful. Therefore, on the premise of understanding these basic principles, you can have a certain technical analysis ability and master some skills and strategies for making orders. The currency market contract is your ATM.
But no matter what, contracts are a high-risk gambling market, safety comes first, and I wish everyone can make a fortune in the cryptocurrency world.
Another core concept in the trading strategy: liquidity +. If FVG helps everyone find entry points, then the concept of liquidity can not only help you find trading opportunities, but also help you set stop loss and take profit prices, and even help you avoid being "hunted" by institutions.
Many investors may have had this experience: after setting the take-profit and stop-loss, they turn off the computer and go to sleep, expecting to see the take-profit the next morning. But when they turn on the computer the next day, they are surprised to find that the price first triggers our stop-loss, and then rushes towards the take-profit.
This situation is analyzed in detail by the “smart money” strategy, which explains price behavior from the perspective of liquidity. This theory states that there are two reasons for price fluctuations:
One is the imbalance of supply and demand, which is manifested as the emergence of FVG. When there is an imbalance between supply and demand, prices will instinctively move toward positions with insufficient orders, which attract prices like magnets. When FVG is broken, the magnetic poles of the magnet change again, pushing prices in the opposite direction.
The second reason is liquidity, which I will introduce to you today. In other words, prices naturally pursue liquidity. So what is liquidity?
Liquidity is the driving force behind price fluctuations
The textbook definition of liquidity is: the situation where investors can cash out assets at a reasonable price. In other words, when we trade, there are enough counterparties to accept our orders.
As retail investors, we have relatively small amounts of capital. Take gold as an example. When buying 0.1 lots, 1 lot, 10 lots, or even 100 lots, under normal circumstances (non-data market conditions), there is no need to consider liquidity issues at all. This is because short-selling investors or market makers in the market can digest our orders in a timely manner, and the price we see is basically the transaction price.
But the situation is different for institutional investors who hold huge amounts of funds.
Suppose you are a trader in a bank, and your company has just launched a wealth management product that invests in gold. This product is very popular and has raised 50 billion yuan. One day when you come to the office, your boss assigns you a task to buy 5 billion yuan of gold.
Assuming that the gold price is US$2,450 at this time, 5 billion yuan can purchase approximately 280,000 lots, or 2,800 lots of gold.
Assume that there are 500 short orders near 2450 at this time. After you eat up these 500 short orders, the broker will match you with a higher price, such as orders near 2451. Assume that there are 100 short orders here. Therefore, the broker matches your orders all the way up the order book, and the final average position cost is 2480. After the market digests all your buy orders, the price falls back to around 2450 (without considering other buyers).
So the next day you received a notice from your leader: pack up your things and go home quickly, you don’t need to come to work tomorrow.
Why? Because the market impact cost (Cost of Market Impact) you paid for this transaction alone reached $30, which increased the cost of the transaction by about 1.3 percentage points (without considering the spread), which is almost a disaster for financial products that fight for every cent.
Having foreseen this disaster, you adjust your strategy and list two options:
Option 1: Algorithmic trading. By observing the market order and transaction distribution in the past few days, you find that the sell orders are most concentrated within 50 minutes after the opening of each day, and the sell orders are the least in the 10 minutes before the closing. So you decide to submit a large number of buy orders within 50 minutes after the opening of each day, and try to reduce the buy orders or not buy before the closing.
After 5 days, you completed all the transactions. Overall, your average holding cost was 2455. After the transaction was completed, the price fell back to around 2450. At this time, your market impact cost was only 5 US dollars, which was an excellent performance.
In this case, since you have cut a large order into multiple small orders, and the timing of these small orders entering the market is determined according to the distribution of market orders in the past few days, the rules of these orders entering the market will be more obvious, which will be reflected in the chart and may lead to some trend lines or consolidation ranges and other more regular price trends.
Option 2: Hunting for stop loss. You find that 2440 is a short-term low point of the price. At this time, a large number of long investors have set stop losses below 2440. Once the price falls below 2440, they will sell back. Therefore, you decide to use your capital advantage to hunt for the stop losses of these longs and force them to sell their chips to you.
Before the close of a certain day, market liquidity was extremely scarce, and the price fluctuated from 2450 to around 2445, so you took out 500 million yuan to short, and the price was quickly suppressed to below 2440. The stop loss of long investors was triggered, and they sold back, and your long order was successfully executed.
After repeated operations, your 5 billion yuan order was fully executed, and the final average holding cost was only 2445. After digesting your order, the market rebounded to around 2450. At this time, your market impact cost was -5 US dollars. In other words, through trading, you created profits for the company.
This situation is called liquidity hunt or liquidity sweep in the "smart money strategy", which is similar to the "false breakthrough" we often talk about in price behavior.
The ultimate destination of swing trading: liquidity
At this point in the story, we may have realized that liquidity is one of the main reasons for price fluctuations. Large institutional funds often pursue liquidity. After understanding this, let us introduce how to identify the location of liquidity in the "smart money" strategy.
Equal Highs and Equal Lows (EU/EL) When prices reach the same high or low for at least two consecutive times, we say that this place is equal high or equal low. These places are similar to resistance and support levels in price behavior, and are also where investors often set stop losses. Therefore, they are often places with abundant liquidity.
The smart money strategy believes that equal highs/lows are where retail investors are concentrated, and therefore are high-risk areas for institutional hunting to stop losses.
The figure below is a 30-minute chart of gold. We can see that the price formed equal heights at EH1 and EH2. When the price came to EH3, short investors might set the stop loss near EH1 or EH2, and then found that the price broke through the stop loss in the form of an upper shadow. The same situation applies to the long stop loss triggered at EL3 after EL1 and EL2 are formed.
Trend Lines
Trend lines are the second high-risk area for institutions to hunt for stop losses. Trend lines are not only used by investors as a tool to measure trend momentum, but also when prices come near trend lines, trading becomes very active, and these investors will set stop losses near trend lines, thereby providing abundant liquidity.
The figure below is a 1-hour chart of GBPUSD. It can be seen that the price has formed three band highs along the trend line, and each time it turned downward near the trend line, but soon after, the price formed a false breakthrough of the trend line, hunting the stop loss of nearby short orders, and then turned downward again and rushed towards the take profit of these short orders.
In addition to equal highs and lows and trend lines, intraday highs/lows, previous day highs/lows, previous week highs/lows, etc. are also places with abundant liquidity, but the probability of liquidity hunting is relatively low. After understanding the locations where liquidity is concentrated, let's take a look at the liquidity run (liquidity run) corresponding to liquidity hunting.
Unlike the false breakouts that correspond to liquidity hunting, liquidity operation corresponds to the real breakouts in price behavior. The logic behind it is as follows:
When the price rises and breaks through a key resistance point (assuming the high point of the band), the stop loss of the upper short position is triggered, and the short position is reversed. At the same time, institutional investors also enter the market to go long. At this time, the long and short positions are instantly unbalanced, resulting in the buyside imbalance sellside inefficiency (BISl) mentioned in our previous article, which in turn forms a bullish FVG.
Friends who have read the previous article may still remember that when the price breaks through important resistance or support in the form of FVG, there is a high probability that it is a real breakthrough. This is the logic behind it.
When we see this kind of breakout, the price tends to move towards the next target with more liquidity. These targets are usually previous highs/lows, Fibonacci mappings, etc.
I still take the daily chart of gold as an example. Last Friday, the price of gold broke through the historical high. We can pay attention to whether a new FVG will be formed here. If FVG is formed, we can observe whether the next target will point to the next Fibonacci mapping point, which is around $2,599:
The concept of liquidity can not only help us identify liquidity hunting (false breakouts) and liquidity runs (true breakouts), but also help us avoid some pitfalls when using FVG trading. We have said before that when the price reaches the FVG area, there is a high probability that it will return to correct the previous trend. But after understanding liquidity, I will introduce another important rule:
At any time, liquidity is more important than FVG.
How to understand this sentence? Let’s review the trend of gold prices last Friday in hindsight, combined with the gold 4-hour chart: the price appeared in a FVG area near the high point EH3. If we short in this area, we may have a short-term floating profit, but the price soon broke through EH3 and triggered the stop loss:
The logic behind this is: when prices are close to the same high, they give priority to moving towards liquidity.
Therefore, some experienced traders have developed the habit of not trading short FVG near highs and not trading long FVG near lows. From my personal trading experience, this rule is effective about 80% of the time.
Back to the gold daily chart, is this trend of gold price a liquidity operation or a liquidity hunting? It is too early to tell at present. If the price cannot form FVG this week, then there is a high possibility of liquidity hunting on the daily chart next time, and the trend may be another situation:
So far, we have introduced two core concepts in the "smart money" strategy: FVG and liquidity. But these are fragmentary concepts and do not constitute a complete trading system. Later, I will use another article to add the third core concept: order blocks. After mastering these three concepts, we can start to develop a systematic trading plan.
Here are some life-saving suggestions for novices, all of which are my experience of losing money in real trading:
Save it to avoid losing it later.
Managing your position and mindset is very important in trading.
I have 10,000 yuan, and I usually divide it into three parts, investing 3,000 yuan each time.
Many people don't know whether to choose to go long or short, and need to share experience with K-line technology. Go long when the market falls, go short when it rises, and be patient at the same time.
If you open positions frequently, the probability of losing money can be as high as 70%.
The trading principle is actually very simple, and no high leverage operation is required.
This is the core of Position Management+: use only one-third of the funds, so that even if you fail once, you still have enough capital to continue operating.
The Ultimate Heart Method
The bull market is a meat grinder for retail investors, while the bear market is a gold mine for wise men. The real winners in the cryptocurrency world strictly follow the following rules when others lose control of their emotions:
Don’t be greedy when the price goes up: Take profits in batches when the previous high is broken (sell 20% for every 10% increase)
Don’t be afraid of falling: pyramid-cover your position at key support levels (add 10% position for every 15% drop)
③ No movement: Wait and see for 72 hours after the release of major policies
Gift: (Three leading indicators of bull-bear conversion)
①Bitcoin Miner Position Index (MPI) breaks through 2.5, warning of risk
②Stablecoin Exchange Ratio (SOPR)
③ Futures funding rate > 0.1% for 3 consecutive days. Beware of long-term liquidation. Remember: Living longer in the cryptocurrency world is 100 times more important than making money quickly! Write your trading plan on the blockchain, not in the wind.
Come on, I’m Xiaoqi, an old investor who sincerely wishes you to get rich in the cryptocurrency world.
Keep an eye on BTC ETH BNB
Bulls have their own strategies, and bears have their own ways of playing
Xiaoqi will not lead fans to liquidation, and will not open orders blindly
It’s all about winning by being steady and cautious. If you want to eat meat, follow Xiaoqi’s car!
