I am 32 years old this year, and I started trading cryptocurrencies at 22. In 2023 - 2024, my capital successfully broke into the 8-digit range. Now my life is quite comfortable; I stay in high-end hotels costing around 2000 yuan, and I might have crypto symbols on my suitcase and hat. Compared to the older generation engaged in real businesses or the 80s generation in e-commerce, my life is much more comfortable; I rarely encounter troublesome business dealings and have very few worries.
Actually, in the crypto world, mindset is more important than technical skills. I will share my experiences without reservation.
I. Basic Principles of Investment.
Learning is essential.
If you want to invest in the crypto space, you must first understand blockchain technology and how digital currencies operate, and always pay attention to market trends; this is the premise for investing. It's like understanding the terrain and the enemy's situation before going into battle.
Rational investment is key.
Never follow others blindly; invest based on your own risk tolerance. Just like eating, everyone has different appetites; you can't just force yourself because others are eating a lot.
Diversify investments to reduce risk.
Don't put all your money into one project; otherwise, if that project has a problem, you'll lose everything. You can spread your money across different places; thus, even if one loses, others might still profit, reducing risk.
Long-term holding yields returns.
The cryptocurrency market is particularly volatile; it's normal to rise today and fall tomorrow. But if it's a quality asset, holding it long-term is more likely to yield significant returns. It's like planting a tree; you can't expect to plant it today and cut it down for money tomorrow; you have to wait for it to grow.
Stay calm when making decisions.
Market sentiment is like the weather in June; it can change suddenly. Don't let it sway you; keep a calm mind to make the right decisions. If you see others panicking and trading frantically, and you follow suit, it's easy to lose money.
II. Core Strategies to Avoid Contract Liquidation.
Fund allocation has its strategies.
If you have 5000U, don't invest it all at once; allocate it reasonably.
Use 3000U (60%) for low-risk, stable trading, such as trading the swings of Bitcoin (BTC) and Ethereum (ETH).
Invest 1000U (20%) in low market cap altcoins that have hotspots and great potential; there might be big opportunities when new coins go live or during sector rotations.
Use 500U (10%) for contract hedging; only use it when the market experiences extreme conditions, such as before a sharp decline, using 5 - 10 times short orders to reduce spot losses.
Keep 500U (10%) as cash reserves for bottom-fishing when the market crashes.
The most common mistake beginners make is to go all-in, investing all their money in one coin, or using high leverage to bet on direction; this can easily lead to total loss.
Trading strategies should be flexible.
Main Battlefield: BTC/ETH Band (3000U).
Trade at key support and resistance levels. For example, buy Bitcoin when it hits the moving average support level, and sell when it hits the previous high resistance level. The goal is to earn 10 - 20% per wave, doing 2 - 3 trades a month, relying on compound interest to grow your money.
Critical Point: High Odds Altcoins (1000U).
Only play with low market cap coins that have hotspots; seize the opportunities when new coins go live or during sector rotations, you might make a big profit.
Hedging Protection (500U contract).
When the market experiences extreme conditions, use contracts to hedge and reduce losses.
Position management should be strict.
No single trade should exceed 10% of the principal; for example, with a 5000U account, a single order shouldn't exceed 500U.
Set a hard stop loss not exceeding 5%; if you lose 500U, cut the order quickly; don't hold on, or you will lose even more.
Take profits in batches; if you earn 20%, sell half and keep the other half for potentially higher returns.
Review weekly; sell off weak coins and keep strong ones.
Remember to "cut losses short and let profits run," rather than "running at a small profit and holding on through losses."
Rolling operations require skill.
Operational Steps.
Choose a target: Pick a cryptocurrency that you believe will rise in the future.
Initial Purchase: Use all your funds to buy this coin.
Set a Stop Loss: Set a stop loss below the purchase price so that even if the price drops, losses can be limited.
Monitor the Market: Always pay attention to market trends.
When the price rises: If the price reaches your set target, use some profits to increase your position and buy more.
Repeat Operations: Continue to monitor the market; if the price rises, keep adding to your position.
Golden Timing for Rolling Positions.
Breakthrough after a long-term sideways market: When the market has been in a long-term sideways trend and volatility drops significantly, once a direction is chosen to break through, consider rolling your positions.
Buying the dip during a bull market: In a bull market, after a surge, if there is a sudden drop, you can use a rolling strategy to buy the dip.
Breakthrough at the weekly level: When the market breaks through key resistance or support levels on the weekly chart, it's like breaking through a defensive line, and this is when rolling can seize the opportunity.
Market sentiment and news events: When market sentiment changes significantly, or there are major news events and policy changes that could impact the market, rolling can come in handy.
Key Points.
Only roll long positions: Don't trade against the trend; the bull market cycle in crypto is long, making it easier to capture upward trends.
Isolated Position Mode: Use the exchange's 'Isolated Margin + ' mode to isolate the risk of individual positions and avoid total liquidation.
Leverage Limit: Even if the trend is very clear, leverage should not exceed 5 times; otherwise, it's easy to get liquidated under extreme volatility.
Emotional Management: Don't chase high after missing a chance to increase your position; wait for a pullback or the next trend signal. If there is no clear buy or sell point, don't force a trade; otherwise, it will be emotional trading.
III. Establish Your Own Buy and Sell Points.
Everyone's personality, amount of funds, and risk preferences are different, so buy and sell points are also unique. You need to establish a set of rules for your own buy and sell points based on your own situation, and strictly follow the principle of 'buy at buy points, sell at sell points' to avoid being influenced by market emotions.
IV. Retail Investor's Psychological Journey.
In the crypto world, retail investors generally undergo similar psychological changes, typically experiencing these stages:
When the market is soaring, you regret not having enough position and think about going all-in when it drops.
When the market just plummeted, you are still full of confidence, feeling that the drop isn't enough, waiting to increase your position.
When the market enters a downtrend, you start to complain, feel down, and hope for a rebound that never comes.
When the market is in continuous fluctuations, everyone falls silent, and no one speaks.
No one is mentioning bottom-fishing anymore; everyone thinks the market will continue to fall and isn't discussing the blockchain revolution.
Occasionally someone reminds, but no one reacts.
When the market starts to reverse, you are still waiting for a pullback, thinking it is a temporary rebound, continuing to observe.
When the market shows anomalies, you chase after the rise, only to find it was a temporary top.
Repeatedly doing this, in the end, you get caught holding the bag at the bottom of a bull market, lose money, and exit the crypto space.
In the crypto world, it's actually a battle between retail investors and whales. Without insider information, we can easily be taken advantage of. Welcome like-minded friends in the crypto space to discuss and improve together!
