Let me put it this way: in the crypto market, playing spot trading may not guarantee how much you earn, but at least you won't lose money. Losing a lot of money is nearly impossible, though it also varies by person. For example, for newcomers who have just entered the market, it is naturally very difficult to achieve this. I believe that seasoned veterans who have experienced two rounds of bull and bear markets can basically easily achieve stable profits in spot trading.
As long as you have a proper understanding of the crypto market, it is nearly impossible to lose money in the spot market. Those who understand naturally know whether what I say is correct. Recently, I have also been contemplating this question: why are there far more people making money through spot trading in the crypto market than through futures? I summarize the following reasons:
1. The investor's level of understanding: Spot trading often lacks leverage and accumulates capital slowly, so those who generally hold spot assets tend to have larger capital volumes. Typically, these people may have achieved a certain 'enlightenment' in other industries outside of crypto, so they are not in a hurry to achieve results and can do well even without the crypto market. In contrast, the futures crowd typically has capital below $100,000, and these people can go up or down. When they go up, they soar; when they go down, they start over from zero, so most people cannot resist the temptation of instant success.
2. Cyclicality: Spot trading tends to have a longer cycle and a higher margin for error; futures tend to have a shorter cycle and a lower margin for error. The high fees and funding rates of futures force you to make judgments in a relatively short period of time. We know that market trends, especially short-term trends, are largely random. If your judgment is wrong, you face real monetary losses; whereas with spot trading, you only face unrealized losses.
3. Psychological pressure: Those who have experienced it know that trading futures makes it impossible to sleep well. The first thing you do when you wake up at night is check your phone to see if you've been liquidated. You dream about liquidation scenarios, and before sleeping, you keep staring at the market that doesn't fluctuate at all until you can't stand it anymore, and then you quietly add a bit of margin just to dare to continue sleeping. With spot trading, it’s completely the opposite; I can sleep anytime without worrying about liquidation. There’s plenty of time to do what I want.
The above summarizes a few reasons why making money in spot trading is simpler. Complexity does not mean correctness. Therefore, if we want to make steady profits in spot trading, the prerequisites we must meet are: 1. Do not invest if you do not understand: I believe this point carries the highest weight among all reasons. I see many people complaining that Ethereum is not rising, which indicates that many people hold a significant amount of Ethereum. However, I can guarantee that at least 80% of these people have not deeply researched Ethereum; they just think it’s good because others say so. If you truly understand what you are buying, you certainly wouldn't lash out just because it’s not rising. Many people who lose money throw all their money into an asset they haven't researched deeply enough, and once the market turns against them, they fall into endless doubt and panic, ultimately leading to their own downfall.
2. Timing of entry: Just because we have researched and confirmed that something is good does not mean we should blindly jump in right away. Even if something is soaring, don't let emotions drive you to FOMO and buy at a high. You must wait for a discount before buying. Just like with NVIDIA right now, we must admit that it is a very good company, but a good company does not necessarily equate to making money. If you can't find an opportunity, then look for the next one. In investing, you must avoid having thoughts like 'I must do this or that'; appropriate waiting is necessary. A great hunter won't easily shoot without aiming.
Summary: The core of stable profits in spot trading: 1. Do not invest in what you do not understand; do not invest without in-depth research. 2. Secondly, find a suitable entry point. This point does not necessarily have to be the absolute low; a relatively low position is sufficient. What does relatively low mean? It means we pick it up when everyone else is throwing it away like a hot potato, rather than chasing after it when everyone else is scrambling for it, which can easily lead to injury. That's all I have to say; I hope you can continuously prosper, Sister Xin.
Continuing to fight alone, relying on luck to make money, will ultimately lead to losing based on skill and getting swept away in the market tide!
The market never lacks opportunities; the question is whether you can seize them. Following the right people is key to surviving long-term in the market and earning more!
Want to double my account, want to eat big profits comfortably, want to successfully recoup losses.
Stay close to Sister Xin and position yourself ahead of the bull market's main rally!
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