Last night, I had a feeling that the crypto market was going to drop. I didn’t expect that in the morning, I saw news of an Israeli airstrike on Iran. The crypto market seemed to have paid some military fees. In the morning, altcoins dropped significantly, but in the afternoon, they rebounded a bit. I was indifferent since I had no altcoins. When I saw ETH drop, I opened a grid trading contract for 5 times leverage between 2400-2800.
The current market clearly lacks liquidity. Very few people are selling, and the prices haven't risen, which indicates that there are also very few buyers. The USDT is trading at a premium; at least on our side, USDT is continuously flowing out. Even if Bitcoin and altcoins drop, it hasn’t caused USDT to rise. People have no intention to average down or buy, which is not a good sign. Once someone cashes out a large profit, with such low demand, it might not be able to sustain, leading to a sharp decline.
In the current situation, everyone really doesn't know what to buy. If you buy altcoins, they might rise 20% and then drop back immediately. Repeated false breakouts have drained the patience and capital of many traders. So the recent market is not suitable for trading altcoins in waves, not suitable for buying altcoins in large quantities, and definitely not suitable for trading contracts. The only thing that works best is dollar-cost averaging.
A few days ago, I bought 200,000 in innovative drugs. Initially, I made over 8,000, but when I woke up in the morning, I saw a big drop in the sector index. A stock that was up 30% dropped to a 17% gain, so I immediately liquidated everything and made just over 3,000.
A friend of mine has recently become obsessed with buying high-dividend stocks. He sent me a post from a blogger that said ten years ago, if you invested 1 million in certain stocks, you'd now receive 300,000 in annual dividends. I looked at the list of stocks he mentioned from ten years ago and thought, if you can list them like that, then why didn't you buy Pop Mart two years ago, or BTC and SOL three years ago, or Tesla and Nvidia ten years ago? This is a misleading statement; investing based on hindsight is meaningless. It's a seemingly simple method that can actually lead to significant losses. Many great companies from ten years ago have now seen their market values drop by 90%.
I said that collecting dividends is not a problem, but you really need to understand the company and the industry. If you buy when it's undervalued, that's fine, but if the company fails, then what have you done for nothing? You need to invest a lot of money to collect dividends because the purpose of collecting dividends is to cover living expenses. At least invest 2 million, with a 4-5% dividend; if the stock doesn't drop, you could earn 80-100 thousand, which is certainly great. But you can't just buy without considering the price because someone else said it's good. It's like investing a sum of money and feeling comfortable, expecting the dream of collecting dividends to automatically come true. I want to say, if your money is too little, even if it rises by 15% in a year, it won't mean much to you.
The core is that you need to understand. Only by understanding can you hold on; if you don’t understand, you won’t be able to hold on whether it falls or rises.
The thing about collecting dividends is that both money and time are essential; it's not easy to achieve.
Earlier, a partner who used to work in e-commerce told me that he’s going to sell houses in Xi'an. He said that relatives there can earn millions selling houses in a year. I simply analyzed the issue with him: real estate is no longer the trend. Struggling in a declining industry may yield very little. Even if you know nothing about this industry, it doesn't matter. If you recruit 10 real estate agents, pretend you're buying a house, and then ask them how much they can earn in a month, averaging their salaries, then no matter how good you are, your earnings will definitely revolve around that average.
As for others making millions, having good resources is useless to you because it relies on commissions. Their clients will not give you their commissions. You must sell your own set to earn commissions. The sales industry is the hardest to cheat in.
I told him to focus on Web3, as there’s no need to struggle in a declining industry.
I came across a post about a person who traded crypto for 8 years and ended up in debt of 6 million leaving the crypto space.
The story goes like this: during the waves of a bull market, he accumulated wealth through various operations, reaching about 10 million around 2017. However, in 2018, he lost over 1 million playing contracts. In 2020, he opened 8 takeaway seafood restaurants and lost 8 million due to the pandemic. In 2021, he bought mining machines and lost 6 million, and over 2 million with Ethereum mining. In 2023, he lost over 2 million in contracts, eventually borrowing money, selling equity, and leveraging to buy BTC, which dropped to 39,000, losing more than half. Then he started playing with meme coins and lost everything by December 2024, eventually exiting the market.
Since then, I have been in debt of 6 million, despised by relatives and friends, and avoided.
At first, this guy was very cautious, starting with 20,000. He has his own company that makes hundreds of thousands a year. Later, after making money in crypto, he ignored the company. He started trading contracts cautiously, investing 100,000 at a time. In the end, he increased his investment and lost big.
I can summarize that his money was made by luck, standing on the trend of the market.
The root of his failure wasn't playing contracts but rather engaging in things he didn't understand and investing too much. He got rid of 1,600 mining machines and was hoping to make back losses with contracts. When you have that thought, the money you made with contracts can lead you into a pit when you're out of options.
If you only play with small amounts, of course, it's fine. The key is that as you play, it can grow larger. Just like someone who initially hoarded coins for small profits eventually started trading contracts. The development of things has enormous variables; if your understanding isn't in place, you'll naturally be dragged into a pit.
My conclusion is that once you make a profit, you need to withdraw your funds and do asset allocation. In the crypto space, keeping a maximum of 30% is sufficient. If you can get rich, that’s enough; if you can’t get rich, losing that amount won’t hurt much.
