There have been new changes recently, and I am preparing to update the course again. The BTB investment research course has been updated three times already; this is the fourth time. These days, I’ve been in the office, smoking a cigarette, quietly thinking about the updated content, adding the changes from the past six months into the tutorial, what the case studies are, and what the updates are in various aspects.
Why do updates? The market is changing; it’s not static. When changes form trends, you need to update your mindset. Some things become ineffective, while new things emerge. For example, previously Bitcoin did not have an ETF, but now it does, and listed companies are buying; that’s a change. In the past, Bitcoin would drop by ten thousand points, which was normal, but now dropping five thousand points is seen as a lot. Before, you could definitely invest in knock-offs that would increase by dozens or hundreds of times, but now that’s not the case anymore; changes are necessary.
I was hurt by contracts before and know their severity. Looking back, contracts are not as terrifying as they seem; the key is to act under the premise of having the ability. This requires investment research skills, technical skills, position management ability, basic math skills, as well as risk control and trading strategies, along with a good mindset. If you don't have these, it's best not to get involved.
Trading requires rules, especially for retail investors. Everyone is using their hard-earned money and wants to amplify it in the crypto space to improve their lives, so it’s even more critical to have trading rules. I’ve thought of a few points these days to share with all crypto friends.
1. Follow the trend rule
Follow the trend; here the trend varies in size. In spot trading, if the trend goes up, then enter; if it goes down, then wait. In contract trading, don’t short if it’s going up, and don’t go long if it’s going down. Following the trend will at least help you lose less money. The hardest part is 'knowing the trend', which requires understanding and repeated practice. If you reverse it, even a deity can’t save you.
2. Passive response rule
The market is something we cannot control; it can rise or fall, and we cannot manage that. Old horses may want to bite the yellow-haired one, but we can only watch. It’s like playing Mahjong; if I haven’t drawn a tile, how do I know what the next one is? There’s a famous saying on Wall Street: 'A trader without a viewpoint is the best trader.' We should abandon subjective assumptions and wishful trading, allowing whatever comes to come, like the Buddha blocking the killing.
3. Reasonable profit and loss rule
You cannot make trades where you lose big and gain small. In spot trading, it's generally fine; once you've established a position, hold it and wait. If the trend reverses into bearish territory, you must cut your losses and wait to buy back at the bottom. Once it starts up again, you'll make your profits back. In contracts, many people are afraid when they are in profit and just watch when they are in loss, leading easily to losing big and gaining small. Key factors in contracts also include funding rates, transaction fees, and a bunch of other costs. Therefore, you need to consider the issues of profit and loss, commonly known as the take-profit and stop-loss strategy.
4. Better to miss out than to do wrong rule
A few days ago, I read a book (the investment knowledge I learned from Darwin), mainly discussing the relationship between evolution theory and investment. One way is to make mistakes in investment, and the other is to miss out. In investment, choose the latter, as you must first protect yourself and preserve your principal. A cheetah on the African savannah never hunts buffalo because it knows that if it goes all out, it could be fatal. If you don’t have that capability, don’t do this; it’s dangerous!
5. Act based on data rule
As an excellent trader, every buy or sell should have a basis; it’s not just a whim to gamble. When someone says it can be bought, there must be a reason for buying and selling. If you’re wrong, you can review your actions to see if your understanding was inadequate or your ability was lacking; remedy what is wrong. If something is not right, getting in is not called being bold; it’s called being reckless!
6. Take-profit and stop-loss rule
Many crypto friends completely lack this probability; this is the first move to preserve your principal. In trading, you might buy and sell due to emotional reasons, or because of sudden market changes. No matter what, as long as things don’t go as you thought, you are wrong and should stop. In spot trading, it’s common for 'hold until death' to turn into 'being held to death', or for contracts to not stop loss and just hold on. If it comes back, from the current perspective, congratulations, you made a profit. But looking ahead long-term, being deeply trapped without recovery or liquidation will be your fate.
I’ve generally summarized these points, which should still be quite comprehensive. This is derived from many years of losses and what I’ve learned. I don’t want crypto friends to lose big money and learn such profound lessons. Here’s a contradictory thing: Generally, people can’t understand the path without losing big money; at least lose money reasonably, but don’t hurt yourself too badly.
If I haven’t thought of something, crypto friends can fill in the gaps; let’s improve it together.