Profit comes from sticking to the trend trades that others have given up, seizing opportunities that others don't want, and doing what others dare not do. Investment only has abandonments due to lack of persistence, not complete failures. Trading is the same; originally optimistic about a direction, but as the market fluctuates, one changes their original direction. Initially bearish, yet due to a slight market rise, one exits and goes long, ultimately delaying the downward trend and causing losses against the trend. Such examples are countless in trading; any success requires persistence.
Becoming a trader with a strong defensive awareness is a key transition for novice traders on their trading journey. Many newcomers may be misled by a desire for quick success, hoping to earn profits quickly, even trading with a mindset of 'getting rich overnight.' However, a more practical and feasible mindset should be: maximize the protection of your funds. These two mindsets cannot coexist; if you focus solely on quick profits, your capital is likely to be lost even faster.
A rule from the sports arena also applies to trading: offense is the best defense. In this context, it means only trade under favorable conditions, while protecting capital and staying away from the market at other times. Newcomers might achieve success in their first few trades by chance, but luck cannot last. You should be wary of the 'beginner's luck' trap.
Imagine if you hold a gun; unless you are absolutely certain you can hit your target accurately, you wouldn't waste bullets easily.
The same principle applies to trading: preserve your capital strength and only strike when truly favorable opportunities arise.
In trading, maximizing the protection of capital is key to success. As long as you can effectively control risks, even when encountering strong entry signals but ultimately failing, the impact on capital can be kept within reasonable limits.
Frequently checking charts and constantly monitoring trades often has a negative impact on trading.
In life, too much interference usually does not yield good results. If you constantly try to control trading excessively, the results may backfire and bring you more trouble.
Have you ever unconsciously increased your position or exited a trade early because of excessive focus on the charts?
In retrospect, does it feel like you were too impulsive at that time? Such unplanned actions are often one of the reasons many people incur losses.
The simplest way is to set a trading plan and then forget about it. This is a principle I often emphasize to newcomers and one of the most valuable experiences I've gained: the less interference you have with your operations in trading, the better. Simply follow your trading plan and let the trades proceed as planned; that is true trading wisdom.
The result of the last trade should not affect the next trade; the outcome of the last trade should not influence the next trade.
This is an extremely important principle, but many people often easily forget it. They can easily be swayed by the results of the last trade. However, it is essential to understand that each trade is unique, and trading results are randomly distributed.
Assume you executed 100 trades; the gains and losses may be negligible.
However, their distribution cannot be so even.
It is possible to have 5 or 10 consecutive losses, and if these losses affect your mindset, the profitable opportunities that may arise next could also be hindered by your emotional state.
It is also important to note that after experiencing profitable trades, excessive confidence can have a negative impact on trading, just like the fear that follows losing trades.
Overconfidence can lead one to take on excessive risks, and its negative impact in the long run is quite frightening. Therefore, staying 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, moderation is key. A common mistake many traders make is overdoing things. They excessively analyze the market, overinterpret market conditions, overthink, and overtrade, generally doing many unnecessary things. As a trader, learning to be appropriately 'lazy' is equally important.
First, it needs to be clear that favorable signals in the market over a period are limited and even rare. Most of what you see and hear may only be 'market interference', noise that is of no benefit to you. Learn to filter these signals and then select the truly favorable 'quality signals' for you; this is the routine step for finding opportunities.
Secondly, I recommend you learn the mindset of hedge fund traders for conducting trades. They hold millions or even billions in capital, but trade with strict principles, like selecting diamonds from sand, choosing only the highest return opportunities. For those 'possibly' or 'seemingly' valid signals, I advise you to steer clear. In my 20+ years of trading experience, the best trades have always been the most obvious and intuitive.
Have a clear exit plan before entering.
In trading, no one tells you what to do. You must set your own rules, which means you have to take responsibility for your actions. Many people lack this self-control, leading them to often lose their trading direction.
Before trading, one of the most important tasks is to determine the exit plan. It took me several years to realize: exiting is more important than entering. Observations show that many people's exits are capricious, resulting in either minimal profits or significant losses. Establishing a strict take-profit and stop-loss plan is the best approach. Such a plan can provide you clear guidance, allowing you to remain calm and execute the plan regardless of profit or loss. This disciplined exit plan helps ensure you maintain clarity in trading and reduce the influence of impulsiveness and emotions on decision-making.
Avoid worthless trades.
In the trading world, worthless trades refer to trades where risk and profit are disproportionate, often occurring when traders are blind and trade frequently. Such trades often lead to losses greater than profits, affecting traders' mindsets and even trapping them in a vicious cycle of losses.
Specifically, traders facing a volatile market rush to enter upon seeing so-called 'opportunities' without considering the profits and risks of trades. Such blindly entering traders often hold a lucky mentality, thinking that even a tiny profit is a gain. They ignore large risks for small profits, believing any market movement is an opportunity not to be missed, subjectively amplifying small chances and impulsively trading. This attitude not only shows disdain and disrespect for the market but also makes it difficult to achieve good results.
For professional traders, they usually develop trading plans and set stop-losses in advance to ensure that even if they incur losses, the impact will not be too significant. However, the losses caused by worthless trades are different because these traders have a shallow understanding of the market, their trading decisions are more arbitrary, and they lack careful consideration. Such avoidable losses are more harmful than beneficial to traders' growth.
High discipline.
High discipline plays a crucial role in trading in financial markets. It refers to traders adhering to a clear set of rules and principles when trading to ensure effective risk management, achieve investment goals, and avoid adverse consequences brought about by emotions and arbitrary decisions. The level of discipline directly relates to the success of trading and is regarded as one of the key factors for successful trading.
I insist on emphasizing that trading decisions should not be influenced by emotions. Every day, I only spend half an hour checking the charts, deliberately avoiding getting lost in excessive observation.
Market fluctuations. I suggest traders strictly adhere to their trading plans.
Avoid over-analyzing the market, as disciplined execution is the cornerstone of stable profits. By following a predetermined plan, I can stay calm, avoid emotional decisions, and thus improve trading efficiency and stability.
Most of the time, you should step away from the trading desk. A wise strategy is to maintain distance from the market. Overtrading is often a shortcut to losing capital, and remembering this is crucial.
The stars shine as always. Follow the public account (Sunny in the Crypto Circle) and you will surely gain something. Helping others is helping oneself. There are no bad markets, only poor operations. I hope that regardless of how the market changes, we can continue to walk together, and in ten years, we can look back at the crypto circle with a smile.
Having experienced the ocean, nothing else compares; without the misty mountains, the clouds are not the same. The above are some insights from my 10 years of trading in cryptocurrency, heartfelt words after many detours. Today, I share them with everyone, hoping to help with your understanding and thought process in cryptocurrency trading.
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