It has been several days since I last summarized, the reason is that I have been making continuous profits. When a person is constantly making money, they do not have the habit of reflection and summary. Therefore, this summary is also a process of self-reflection.
1. Effortful you encountering a volatile market = losing money
When the market has no trends, people will discover a problem: whether you are trading or using leverage, or even spot trading, as long as you trade more frequently, the ultimate goal is only one: to lose money. In fact, the harder you try, the more you go all in, the more you lose. Whether it is Livermore or Charlie Munger, these great stock (betting) gods emphasize one point: the importance of waiting. The market is always there, and its state is very simple: rising, falling, and fluctuating. In the market, the only effective fluctuations for us are the rise and fall. Therefore, what you need to focus on is how to trade with the trend: buy when it rises, sell when it falls, and do nothing when it is sideways. That's all.
Today, my biggest mistake was twofold. First, early in the morning, my wife said I was not in good condition and asked me what was wrong, asking several times. At that time, I hadn’t traded yet, just got up. I got angry because for traders, the worst fear is being in poor condition; being in poor condition equals losing money. So we had a big fight in the morning. After the argument, I originally wanted to take a cooling-off period, but I didn’t. By noon, we had basically reconciled. I took a look at the market and felt there was an opportunity, but I hadn’t opened my computer or analyzed the market, and I impulsively went in heavily. After losing the first trade, I continued to go all in with the second trade, using both accounts, which was very emotional. The result was predictable: a significant drawdown! After withdrawing funds, my remaining $500 had already increased to $1600, but after this loss, I was left with only $300. It was truly painful.
The second mistake was going all in during a volatile market. Looking back now, it was truly foolish; this is not something that should be done in a volatile market, as it has no winning edge or value, yet I impulsively went in. Therefore, execution is really important, brothers. This is a very painful cost that I share with everyone: when encountering something and feeling bad, you must take a cooling-off period. When the market is sideways and fluctuating, you must take a cooling-off period. After making two consecutive mistakes, you must take a cooling-off period. If you are not in front of the computer, do not trade.
2. Make good use of market alert tools
I don't know if everyone has discovered a very good tool, which is market alerts. Next, I will explain it well. When we trade, whether it is leveraged contracts, event contracts, or spot trading, we can set an alert when the market reaches a key position. For example: Now the BTC price is 104000, the upper key resistance is 106500, and the lower key supports are 102000 and 100000. For such key positions, we directly set a price alert. When the price reaches that point, the software will automatically remind us, and we can open the software immediately to analyze the market and make our trading plan. This skill is very practical.
3. The issue of winning chances in event contracts and leveraged contracts
As long as you have been trading for a long time, you will discover an interesting phenomenon. Some market trends do not show significant fluctuations or are not strong enough. At this point, if you open leveraged contracts, regardless of how much leverage you use, your chances of winning are not great. However, if you open event contracts, the starting odds are 80%. Conversely, if the market trend is very strong, and you still trade event contracts, that would be foolish because leveraged contracts do not have an end time. Once you enter, as long as you don't get liquidated, you can hold for several hours, days, or even months. Thus, when encountering a large trend, the advantages of leveraged contracts become evident. For example, the other day I shorted ETH at 2603 with 125x leverage, and the price dropped to around 2530 within an hour, yielding a 300% profit. How much do you get with an event contract? At most 85% at the peak. This is the skill. Many people do not analyze their winning chances; they either keep opening leverage or continuously gamble on event contracts like a betting dog. Are you here to make money or to seek thrills?
In conclusion: The universe is vigorous, and a gentleman should strive for self-improvement. The path of trading is destined to be full of ups and downs, with numerous obstacles and untold hardships ahead. When making money, one feels like the chosen one, but when losing money, one feels worse than a dog. A trader who has never collapsed, despaired, or considered jumping off a building will never become a qualified, excellent, or great trader.
This is the story of a new trader who started with $10 and made it to 360 times in half a month, then withdrew to only 230 times in a day. After reading, please follow me to witness my myth of ten thousand times.