In my years of full-time trading, I have experienced the ups and downs of life, from being heavily in debt to achieving financial freedom, realizing a leap in social class.
During this period, I have dabbled in various fields, whether participating in dog coin projects, ICOs, or diving into mining; I have tried them all.
Along the way, I have stepped into countless pits and experienced the market's ups and downs, but what I felt more deeply is the tempering of my mindset.
Here, there are continuous surprises as well as disappointments; this is a circle that is both magical and full of temptation.
I have summarized countless trading skills and strategies, but ultimately found that the only way to achieve sustained profits is simple and direct—bravely buy in a bear market and decisively sell in a bull market. This strategy seems crude, yet it consistently works, allowing me to profit without loss.
1. For example, if the total account funds are 200,000, you can afford to lose a maximum of 20%, which is 40,000. Therefore, I suggest the most aggressive loss plan: 10,000 the first time, 10,000 the second time, and 20,000 the third time.
I believe this loss plan has a certain degree of rationality.
Because if you get it right once out of three times, you can profit or continue to survive in the market.
Not being kicked out of the market is itself a success, and there is a chance to win.
2. Grasp the overall market trend. Trends are much harder to navigate than fluctuations, as trends involve chasing rises and cutting losses, requiring determination in holding positions, while buying high and selling low aligns well with human nature.
Trading is such that the more it aligns with human nature, the less money you make; it is precisely because it is difficult that it is profitable.
In an upward trend, any violent pullback should be an opportunity to go long. Do you remember what I said about probability?
So, if you're not in the vehicle, or if you've gotten out, be patient and wait; when a drop of 10~20% occurs, be bold.
3. Set clear profit and loss targets. Profit and loss can be said to be the key to determining whether one can make a profit. In several trades, we must ensure that total profit exceeds total loss.
Achieving this is actually not difficult; just do the following points:
① Each stop loss ≤ 5% of total funds;
② Each profit > 5% of total funds;
③ Total trading win rate > 50%. Meeting the above requirements (profit-loss ratio greater than 1 and win rate greater than 50%) can achieve profits. Of course, it is also possible to have a high profit-loss ratio with a low win rate, or a low profit-loss ratio with a high win rate.
As long as you ensure total profit is positive, total profit = initial capital × (average profit × win rate - average loss × loss rate).
4. Remember to avoid excessive trading. Since BTC perpetual contracts are traded 24/7, many newcomers operate daily, almost every trading day in a month, which can lead to mishaps.
After frequent operations, there will always be mistakes. After making a mistake, your mindset can deteriorate, and once your mindset worsens, you may act impulsively and choose 'revenge' trading: going against the trend or over-leveraging.
This will lead to one wrong step after another, easily resulting in huge losses on paper, losses that may take years to recover from.