What do newcomers in the crypto world want to achieve? Making money!!! But to make money, you first need to improve yourself.
As a seasoned player in cryptocurrency trading, I will share some insights from my trading experience that I hope will help you.
To be honest, after spending so much time in the virtual currency market, although I didn't lose money in the end and even made a little, looking back at my 'wild operations', I really broke into a cold sweat. If my luck had been a bit worse, I probably would have lost everything.
First, if you want to make money, you need to improve your understanding.
This saying applies to any industry, and the crypto world is no exception.
Why do so many people rush into the crypto world? Isn't it because they see the opportunity in blockchain?
It's like riding a bike against the wind; it's exhausting and you can't go fast; but if you stand on the windward side, you can easily take off.
In last year's bull market, I saw that those who made money were basically those who loved learning and were willing to research.
The current crypto world is not as easy as everyone thinks; the pace is very fast. Moreover, this industry is still in its infancy, with new knowledge and concepts constantly emerging and changing very quickly.
As long as you are willing to spend time learning and communicating with others, it is really not hard to become a big player.
It may sound exaggerated, but if you can thoroughly understand the Bitcoin white paper, your theoretical level can directly surpass half of the people in the circle.
Second, beginners should use spare money for regular investments.
Only a few dare to bet their entire fortune on blockchain; most people have their own jobs and don't have that much energy and funds. 'Investing with spare money' is not just a cliché; it's a lesson learned by those who have been through it with real money.
Trading cryptocurrencies is like trading stocks; mindset is extremely important. If you can't eat or sleep because you've lost a bit of money, then you've definitely invested too much. Once your mindset collapses, your investment decisions will also be thrown into chaos.
Remember, never use your lifesaving money or borrow money to trade coins! Otherwise, when you urgently need money and want to sell coins, there's a high probability you'll have to cut your losses.
The most suitable investment method for beginners is using spare money for regular investments.
You can set a fixed time and amount, for example, every Sunday at noon, take a portion of money to buy mainstream coins, and then just leave it alone. This method is both worry-free and labor-saving, and it allows you to steadily benefit from the industry's growth.
Third, you must do enough homework before selecting coins.
If you plan to hold a certain coin for the long term, you must research it thoroughly.
Currently, many project parties conduct KYC verification when raising funds, and before we buy coins, we should also 'verify' whether the project is reliable.
How to study specifically? You need to start from the aspects of business logic, technical advantages, and team background.
It's best to experience the product personally.
Just like traditional investors wish they could live in the founder's house for due diligence, if you plan to heavily invest in a certain coin, spending more time researching is definitely not a loss.
Fourth, set clear goals and strictly execute them.
Everyone understands the principle, but very few can actually do it; after all, human nature is the hardest to overcome. But precisely because most people can't do it, if you are able to, you can become part of the profitable minority.
Many people can only buy but not sell; originally wanting to make quick money through short-term trading, they end up being stuck in long-term positions.
If you want to hold long-term for a big rise, you might end up turning your coins into 'inheritance'.
Why is this happening? Either you didn't set the take-profit and stop-loss points properly, or you set them but hesitated to sell when it reached those points.
If you research and feel that a certain coin has potential, you can set a higher take-profit point, but it should be combined with your expectations and the coin's market value. When you reach the take-profit point, sell in batches according to your plan decisively; don't hesitate when it's time to stop-loss. It's like running a company; when you urgently need money, you definitely sell the losing department, not the profitable one. The principle is the same.
Another point to remember is that once you sell, don't easily buy back. Many people become emotionally attached to their coins and trade repeatedly, which is actually irrational.
Fifth, if you don't have the skills, don't easily engage in short-term trading.
It's not that short-term trading can't be done, but in the current crypto environment, I really don't recommend beginners to try it easily. Why?
Because the regulation of the crypto world is still not perfect, and the means of market makers to exploit investors are varied, including false advertising, insider trading, price manipulation, and all sorts of tricks.
The news you see is basically what the market makers want you to see; there is a fundamental information asymmetry.
If you really want to give it a try, it's not impossible, but you must control the proportion of your investment and not exceed 20% of your total funds.
If you don't have a deep understanding of the project and are not proficient in technical analysis, and can't even distinguish between a market maker's wash trading and selling, then I advise you not to send money.
The current crypto world is too restless; only those who operate contrary to human nature and can remain calm have the opportunity to make money. Remember, no industry allows you to make money effortlessly, and the crypto world is even more so.
Sixth, recognize reality: this is not an amusement park.
The first lesson of entering the crypto world is to understand that this is not a place for you to easily make money. Many people come in with dreams of getting rich, but leave with losses. Those who can truly survive in this market first recognize one fact: the crypto world is a zero-sum game; if someone makes money, someone else must lose money. Every penny of your profit is someone else's loss. Before you start playing any game, you must first understand the rules. The most basic rule in the crypto world is that supply and demand determine price. But here, supply and demand are affected by too many factors: policy changes, big player operations, market sentiment, technological developments, etc. Price fluctuations can be very severe, with daily increases or decreases of several tens of percent being very common. This is why many people are scared after entering because they are not psychologically prepared.
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