In the years of trading in the crypto circle, stable profits rely entirely on these 15 points I have grasped!
Currently, my trading profit situation is quite stable, and beginners often come to me for advice on trading methods. I am happy to share my insights from all these years with anyone. Trading in this field indeed requires hands-on practice to achieve real growth. With the right guidance, we can avoid taking detours and save time and energy.
Trading skills are relatively easy to learn; relevant materials can be found in online trading classrooms. However, the real test is personal trading mindset and thinking. The 15 trading experiences I will share next have always guided me towards the right trading direction.
These experiences are what I have summarized in actual trading, playing a key role in cultivating the correct trading mindset and way of thinking. I hope that by sharing these experiences, I can help more new traders who have just stepped into trading or those battling in the market to achieve better trading outcomes and reduce unnecessary troubles.
Be a defense-conscious trader
Becoming a Manhattan defense-conscious trader is a crucial transition for novice traders during their trading journey. Many beginners may be confused by a quick success mindset initially, they accelerate profits and even fall into a 'get rich overnight' trading mentality. However, a more practical and feasible mindset should be to maximize the protection of one’s funds. These two mindsets cannot coexist; if you focus only on quick profits, your funds are likely to be lost faster.
A rule from sports competition applies equally to trading: offense is the best defense. In this context, it means trading only under favorable conditions, while protecting capital in other times and staying away from the market. Beginners may succeed in their first few trades, but success is not sustainable, and they should be wary of the 'beginner effect' trap.
Imagine if you were holding a gun, you wouldn’t waste it easily unless you had the defense to hit the target accurately. The same principle applies to trading; retain your capital strength, and only accept a 'one-shot kill' when a truly favorable situation arises. In trading, maximizing capital protection is key to success. As long as you can effectively control risks, even in the face of strong entry signals that ultimately fail, the impact on your capital can be kept within a reasonable range.
◎ Wall charts and continuous monitoring of trades
This often has an adverse effect on trading. In life, too much involvement usually does not yield good results. If you continuously try to overly control trades, the outcome may backfire and cause you more distress.
Have you ever consciously added to your position or exited a trade early due to excessive focus on the chart? In hindsight, did it feel like a sudden conflict occurred? Such unplanned actions are often the reason many people incur losses.
The simplest way is to set a trading plan and then forget it. This is a principle I often emphasize to beginners and is one of the most valuable experiences I have gained: the less interference you have with your actions in trading, the better. Simply follow your trading plan and let the trading proceed as planned; this is true trading wisdom.
◎ Upper supplemental trading results do not affect lower supplemental trading
The result of the previous trade should not affect the next trade. This is an extremely important principle, but many people often easily forget it. They can easily be influenced by the result of the last trade. However, it is necessary to understand that each trade is unique, and the trading results are randomly assigned. Suppose you conducted 100 trades; the gains and losses may not differ much. Similarly, their distribution may fluctuate. It is possible that the last 5 or 10 trades are all losses, and if these losses affect your mindset, then the profitable opportunities that may arise next could also be suppressed due to your emotional state.
Equally important is that after experiencing profitable trades, excessive panic and fear after losing trades can also negatively impact trading. Overconfidence can lead individuals to take on excessive risks, and in the long run, the impact of such panic is quite scary. Therefore, maintaining calm in trading and not being swayed by short-term trading results is key to maintaining a stable mindset and achieving long-term success.
◎ Simplify trading, and you will reap more
In trading, practice is key. A common mistake made by many traders is overdoing things. They analyze the market too much, overinterpret trends, overthink, and overtrade—generally doing too many unnecessary things. As a trader, learning to be appropriately 'lazy' is also important.
First, it is important to clarify that in the observed time frame, the favorable signals that appear in the market are limited, or even rare. Most of what you see and hear may just be 'market noise', which does not benefit you. Learning to filter these signals and then selecting truly favorable 'quality signals' is a fixed step in seeking opportunities.
Secondly, I recommend that you learn the mindset of hedge traders for trading. They manage millions or even billions of dollars but trade very principled, like picking diamonds from sand, selecting the highest return opportunities. For signals that sound like 'possibly' or 'hope', I advise you to stay away. In my 20-plus years of trading experience, the best trades are only those that are clear and obvious.
◎ Clearly state your activation plan before entry
In trading, no one tells you what to do. You must set the rules for yourself, which means you are responsible for your own actions. Many people lack this self-control, often leading to a loss of direction in trading.
Before trading, one of the most important tasks is to establish an exit plan. It took me several years to realize that exiting is more important than entering. Observations show that people's exits are often impulsive, resulting in either very little profit or significant losses. Establishing a strict profit and loss plan is the best method. Such a plan can provide you with clear guidance, allowing you to stay focused and execute the plan whether in profit or loss. This disciplined exit plan helps ensure that you maintain a clear alert in trading and reduces the impact of emotions on decision-making.
◎ Avoid worthless trading
In the world of trading, worthless trading refers to trades where risks and profits are disproportionate, usually occurring when traders act blindly and trade frequently. Such trades often lead to large losses and small profits, affecting traders' mindsets and even triggering a vicious cycle of falling into difficulties.
Specifically, it is manifested in traders eagerly entering the market at what they perceive as 'opportunities', considering the profits and risks of trading. Such proactive traders often win favorable psychology, even if they make only small profits. They overlook the significant risks, thinking that every market movement is an opportunity not to be missed, magnifying small opportunities and trading immediately. This attitude not only shows contempt and disrespect for the market but also makes it difficult to achieve good results.
For professional traders, they usually develop a trading plan in advance, set stop losses, etc., ensuring that even losses do not have a serious impact. However, losses from worthless trades are different. These traders, due to their shallow understanding of the market, make trading decisions casually and lack deep consideration. Such avoidable loss trades are detrimental to the trader's growth.
◎ High discipline
High discipline plays a crucial role in financial market trading. It refers to traders adhering to a series of clear rules and principles while trading to ensure effective risk management, achieve investment goals, and avoid adverse consequences from emotions and random decisions. The level of discipline is directly related to the success of trading and is considered one of the key factors for successful trading.
I insist on emphasizing the abandonment of emotional interference in trading decisions. Every day I only spend half an hour checking charts, deliberately avoiding getting caught up in excessive observation of market fluctuations. I advise traders to strictly adhere to their trading plans and avoid over-analyzing the market, as disciplined execution is the cornerstone of stable profits. By following the planned strategy, I can control panic, avoid emotional decisions, and thus improve trading efficiency and stability.
◎ Most of the time, you should stay away from the trading desk
In trading, a wise strategy is to maintain distance from the market. Overtrading is often a shortcut to losing funds, and remembering this is crucial.
I strive to utilize the framework of larger time frames to leverage market trends. This method acts as a natural filter, allowing you to exclude many unnecessary information distractions. By doing so, you can focus more on executing your trading plan, ensuring the efficient use of trading opportunities. In my view, the daily chart is the best choice for technical analysis. ◎ Do you sleep soundly at night?
The most in-depth way to understand your stress levels is to conduct a sleep test.
If you encounter tricky risks in every trade, then thinking about trading will feel like a nightmare that haunts your thoughts. When you lie in bed, are you often troubled by worries about trading? Waking up in the middle of the night, are you able to talk about market conditions on your computer or phone?
If you find yourself trapped in these emotions, then your trading may have serious problems. Maintaining long-term trading and profits requires effective risk management. If anxiety has affected your sleep, it means that your trading risks have exceeded the acceptable range. Timely adjustments to your positions and investment in each trade are key. Everyone should maintain a cautious attitude towards this.
◎ Before live trading, have you reached that point?
Before engaging in live trading, there are two key points to keep in mind to ensure that your trading does not turn into gambling.
First, you must have a clear trading strategy. In live trading, a lack of trading strategy can easily lead you astray and cause unnecessary drawdowns. It is best not to rush into trading until you fully grasp the strategy. Remember, do not attempt to use multiple different trading methods simultaneously, as this will only complicate matters.
Secondly, capital management is crucial. Without sufficient funds, you cannot engage in trading in the long term, let alone make a profit. Therefore, it is extremely important to have a deep understanding of the importance of capital in trading. Do not recklessly waste your funds, as it is your lifeline in trading. With effective capital management, you can better protect your investments and ensure that you can operate healthily in the market.
◎ How is your self-control? This is important
The success or failure of trading depends not only on rational strategies, trading plans, and capital management but also on the psychological aspect of self-control. The mindset of a trader can be said to be the dominant force in the rhythm of trading, and a successful trader must possess strong self-control.
In trading, the biggest challenge does not come from financial issues but rather from personal emotional fluctuations. A poor mindset can trap traders and become the biggest pitfall in trading.
Indulging in emotions can lead to a loss of rationality, summarizing the judgment of trading decisions. Confidence is key to successful trading, but overconfidence can become a breeding ground for bad emotions.
In trading, a principled person can better master themselves and remain calm. Trading does not require excessive display of personality, but rather requires a steady execution of plans and always rational decision-making. By establishing a solid psychological foundation, traders can better scrutinize market fluctuations, ensuring that the trading process is more robust and successful.
◎ The more favorable factors, the better
The success or failure of completing a trade can gain more favorable factors, which will increase the likelihood of profit. In the trading chart, if the trend line, important chart levels, and trading signals can remain consistent, then the trade is more likely to achieve profit.
Although many traders seek to avoid human errors through automated trading systems, I personally do not prefer to rely on automated trading systems. I believe that as long as one can find the intersection point where trends, water levels, and signals align, effective trading can be executed without worrying about the quality of the trades. In trading decisions, unity and consistency are key and can be achieved through effective integration of various supports.
◎ Do not add to positions when losing
In trading, overly focusing on win rates while neglecting risk management is a dangerous mindset. I insist on the viewpoint that one should not continue to add positions during a rebound, as this only turns trading into gambling. I believe a successful trader should have risk awareness, avoid taking risks, and not pursue doubling the account in the short term.
Some traders view profits as a secondary goal, focusing more on proving the correctness of their views. However, overly pursuing a high win rate while neglecting risk and emotional management is extremely dangerous. When trading goes wrong and contradicts market trends, some traders not only fail to set stop losses but continue to add positions, hoping for a market reversal. This irrational trading emphasizes gambling. Successful traders should focus more on remaining calm, controlling risks sensibly, rather than being swayed by short-term high win rates.
◎ Set reasonable stop losses and strictly execute them
Determining reasonable stop losses and strictly executing them is a key principle in trading. I have always believed that those who do not set stop losses may ultimately face the risk of being liquidated. For each order, set a reasonable stop loss distance and make wise decisions based on personal circumstances. Additionally, I remind traders not to widen stop losses during losses and not to close positions too early during profits.
After placing an order for each trade, stop losses and profit targets should be set, while keeping away from emotional trading. Once set, it is best not to repeatedly check orders or charts, as such behavior may disrupt emotions. Seeing a loss on an order may prompt traders to widen the stop loss, resulting in more losses. Conversely, when an order is profitable, closing it too early may cause traders to miss out on more profits. In short, constantly closely observing the market and the impact of emotions and mindset is significant; the best practice is to set it and let it not be influenced again.
Patiently wait for the best trading opportunity
If you find it unbearable to endure the pain, then waiting for a clear trend to emerge before taking action is also a good choice. The market is never short of preparation, but what is truly lacking is a consistently good attitude. In the world of trading, patiently waiting and ensuring your mindset is in the best state for success is key. Do not rush to take action but wait for maturity because a clear trend can provide you with a more defined direction.
In trading, the market often generates panic signals or weak signals. However, the importance of waiting for the best trading opportunities is self-evident, just like a cheetah waiting for the best prey. For weak signals, we should not take excessive risks but patiently wait for the exact opportunity. Maintaining patience is key because the market is constantly in focus, but not every moment is the best trading opportunity.
Summary
Finally, I must emphasize that trading is not the entirety of life; it is merely an investment approach and should not affect normal life. Unless you are a professional trader, do not devote all your time to trading; you should have your own job and career.
In summary, successful traders need to adhere to simple yet effective trading strategies, maintain a high level of discipline, wait for the best timing, set reasonable stop losses, avoid overtrading and risks, and not forget that besides successful trading, there are other aspects of life and career. These suggestions help more people succeed in the crypto market.
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