The mechanism of making money through speculation in cryptocurrency markets. It is extremely difficult to make a living trading in cryptocurrency markets. It is essentially a survival challenge, inhumane, and high-risk. Below is an analysis of its core difficulties from the perspective of market rules, capability limits, psychological loss, etc.:
1. Essence of the market: The inhumane zero-sum game dilemma
Cryptocurrency trading is a 'negative-sum game'. Retail investors need to combat hidden costs, such as handling fees and broker monitoring, with over 90% of them incurring long-term losses.
The logic of profit contradicts intuition:
Dare to buy on the dip (to overcome fear), dare to sell on the rise (to curb greed), and hold short positions when weak (to resist trading impulse). Most people find it difficult to break through human weaknesses.
2. Survival threshold: The double crushing of information gap and money management
Cognitive barriers: Traders dominate the market with money and insider information, and individual investors rely on fragmented information (such as orders from key opinion leaders) which can be easily exploited. Professional skills, such as on-chain analysis and macroeconomics, require long-term accumulation.
The life-and-death line of the fund: Trading with leverage and full positions is extremely risky (for example, a 10x leverage volatility of 10% means liquidation), and the average lifespan of contract traders is less than 3 months.
3. Psychological loss: Chronic consumption of isolation and emotions
Trading directly affects emotions: self-blame for losses, regret over missed opportunities, and anxiety about gains and losses in profits. Long-term high pressure can easily lead to insomnia and social isolation. Sudden wealth cases in the market amplify the 'survivorship bias' and hide the fact that 'the success of one general is the result of the sacrifice of thousands'.
4. Sustainability Challenges: Strategy repetition and uncontrollable risks
Strategy fit: Market rules change rapidly, technical indicators can fail inversely, and strategies need continuous improvement.
Macro risks: Policy oversight, technological changes (such as Web3.0), and unforeseen events (such as exchange explosions) can instantly destroy capital accumulation.
Rebuilding knowledge: Recognizing that trading is a 'game of probabilities', focusing on risk control, and letting go of market prediction.
Skill fundamentals: Mastering fundamental analysis (technical aspects + on-chain data + macroeconomics) and using simulation disks to verify strategies.
Rational investment: Using surplus funds for trading, setting profit goals and exit mechanisms, and avoiding greedy withdrawals.
Summary$ETH
Trading as a suitable source of income for a select few - they need inhuman discipline, the ability for continuous learning, and resistance to pressure. For most people, it is practical to invest in mainstream currencies and accumulate capital by deepening their core businesses. In the world of cryptocurrencies, 'survival is a life-or-death struggle', and 'survival' is more important than 'get-rich-quick'.
