How to turn 100,000 into 20 million? My journey of reversal!
Hello everyone, I am Kui Ge. In 2015, I accidentally came into contact with the cryptocurrency trading industry. At first, I lost hundreds of thousands just like gambling. But later, I began to study seriously, searching for information everywhere, learning relevant knowledge, and continuously improving my abilities. After several years of ups and downs, I finally welcomed a turning point in 2024. I started my journey of reversal. In just over two years, I have grown from 100,000 to now eight figures!
Core principle: Three don'ts for trading cryptocurrencies:
Avoid buying in during price increases: when market sentiment is high, prices tend to be inflated. Conversely, buy during market pullbacks or declines, taking advantage of market fear to acquire assets at low prices.
Diversify risk: do not put all your funds on one cryptocurrency. Diversified investments can spread risk; even if a certain cryptocurrency performs poorly, it will not deal a fatal blow to your overall investment.
Control position size: full position trading will limit your flexibility. Retaining a certain amount of cash reserves allows you to quickly adjust strategies when the market trend does not meet expectations.
Six rules for short-term cryptocurrency trading:
After high-level consolidation, new highs often occur; after low-level consolidation, new lows often emerge: high-level consolidation usually indicates a new round of price increases, while low-level consolidation may lead to further declines. Wait for the trend to become clear before taking action.
Do not trade during consolidation: when the market lacks a clear direction, the best approach is to observe and wait until the trend is clear.
Buy on bearish candles, sell on bullish candles: a contrarian thinking strategy, buy when the market is generally bearish, sell when the market is generally optimistic, reducing the risk of chasing highs and cutting losses.
Judging the rebound strength based on the speed of decline: a rapid decline is often accompanied by a rapid rebound, while a slow decline may lead to a more moderate recovery.
Pyramid-style position building: gradually increase the position size, especially increase buying power when prices are falling, to lower costs and lay a foundation for future gains.
After continuous rises and falls, there must be a consolidation phase: long-term price movements will always experience a consolidation phase, with smaller price fluctuations. At this time, it is not advisable to rush in and out; wait for the next trend signal.
True cryptocurrency trading experts simplify things. They repetitively engage in simple actions. This short-term trading model has a win rate as high as 98.8%, and learning it can help you easily go from 100,000 to 10 million, focusing only on this one model!
1. Diversifying positions is not mysticism; it’s a lifesaver!
How to allocate specifically?
For example, if you have 30,000 USDT, divide it directly into 3 parts, each part is 10,000 USDT. Use only 1 part for each opening, lock the rest in your wallet as if it doesn't exist.
Remember two numbers: Bitcoin maximum 10 times, altcoins not more than 5 times!
Even if you see a huge surge is coming, don’t be greedy! The higher the leverage, the easier it is for the exchange to bring you to zero with a single needle.
For example: if you open 10 times leverage with 10,000 USDT and the price drops by 10%, the account evaporates directly. But if you only open 5 times, it will only be liquidated if it drops by 20%, doubling the margin for error.
Position diversification has a hidden function: it helps to calm down!
When people lose money, they easily engage in 'revenge trading', which results in even greater losses.
After diversifying positions, even if one day you get a sudden brain wave and blow up one part, the remaining two can help you calm down. Is it the same to lose 10,000 and lose 30,000?
Two, high leverage = chronic suicide, don’t be stubborn!
There will always be people who are unconvinced: 'Old Wang next door made a BMW in one night with 100 times leverage, why can't I?'
Bro, Old Wang won't tell you that he has blown up 10 times, nor will he say his BMW was traded for his house deed.
The truth about high leverage is twofold:
1. Needle treatment for disobedience: Exchanges love you guys who open high multiples; a needle in the middle of the night takes all your capital.
2. Mindset collapse: opening 100 times, a 1% price fluctuation makes you restless, can you still operate rationally?
Remember:
- Bitcoin over 10 times = gambling with your life.
- A counterfeit with more than 5 times = giving away money.
The lower the leverage, the more willing you are to hold positions, and the more you can ride the trend!
Three major deaths of counter-trend positions:
1. Stubborn holding type: 'I don't believe it won't drop!' - the result is that the principal is all lost.
2. Averaging down type: 'If it drops again, I will add to the position to pull the average price up!' - the result is that you end up with no resources left.
3. Mystical type: 'When a golden cross appears on the K-line, it must reverse!' - the dealer teaches you a lesson with a big bearish candle.
Correct posture: better to miss out than to give away your head!
The market is going crazy? Then just watch! Missing out doesn’t lose money, but losing money against the trend can be fatal.
Newcomers need to understand: why 24-hour market watching is useless❗ Read this to understand the tricks of the big players!
'Slowly cutting off large losses', unlike Trump’s strategy to pressure Ukraine 🇺🇦 last night, there is also a method that big players love to use to cut leeks.
Don't be complacent; this is not a warning! If you still can't distinguish between 'distributing goods' and 'washing plates', then you are really not far from being eliminated by the market!
Understand the MACD indicator in one article, so you can stay away from blindly buying and hoping for luck!
1. When the fast line in the MACD indicator crosses above the slow line forming a golden cross, this is a clear buy signal. Moreover, the higher the position where the golden cross appears, the stronger its implied buy signal. A golden cross formed above the zero line is even stronger, while one formed below the zero line is relatively weaker.
2. When the slow line in the MACD indicator crosses below the fast line forming a death cross, this is a strong sell signal. The lower the position where the death cross appears, the stronger the sell signal. A death cross occurring above the zero line is a weak death cross, while one below the zero line is a typical death cross.
For beginners, the MACD indicator has unique value. It can help investors accurately capture the starting point of a strong upward trend and also has some bottom-fishing capabilities.
At the same time, through the signals of crosses, the MACD indicator clearly provides buy and sell points, offering strong support for investors' trading decisions. Mastering the usage techniques of the MACD indicator is undoubtedly an important step for novice investors on the path to successful investing, greatly increasing the probability of investment success.
Of course, just looking at this point is not enough for you to swim in the crypto market.
1. Contracts are not gambling.
2. Find the method that suits you best, as well as the market environment.
3. Position, volatility, holding time - recognize the true nature of contract and leverage risks.
4. Leverage has position limits; you can't open several thousand dollars with 100 times leverage.
5. Entering 10% with 100 times leverage is not called light position; ten times is ten times!
6. Recognize the boundaries of your current methods. 7. Stop-loss, don’t hold your position!
8. As long as you keep an eye on the market, effective strategies will have a chance to be effective again.
9. Keep trading records.
10. If you haven't been in contact with contracts or entered the crypto space before reading this article, don't just join right away!
First, contracts are not gambling.
Contracts change the nature of risk; for example, if the price rises by 1%, the player's invested assets double, but if the price drops by 1%, the player's assets will be liquidated, losing all the principal. Poverty and wealth are always just a thought away and a moment away. In fact, they are similar in nature to futures and stocks (margin trading), although some people think these are also gambling...
When I was purely losing money at the very beginning, I held this kind of mentality that 'contracts = gambling with some规律', and directly used 50 times leverage with a capital of one or two hundred USDT.
The first trade, target 5% profit, maximum loss of 75% in between, hold the position, successfully returned to profit and took profit;
The second trade, target 2.5% profit, lost 75% in between, hold the position, successfully liquidated and went to zero.
Wanting to profit 2.5% but losing 100%, a probability of a few tenths is genuinely unlucky; however, looking back now, stepping into the big pit of holding positions so early can hardly be considered unlucky. If this happened when the principal was several thousand or even tens of thousands, the liquidation would be much closer...
I guess I will probably become one of those who constantly say 'contracts are gambling', as a relatively more miserable group (having lost money in liquidation), would refuse to understand contracts or even digital currencies further.
Then switch to futures or stocks to continue losing.
Two, find the method that suits you best, as well as the market environment.
After my own exploration, I chose a relatively low-risk operating method.
Prepare an amount of funds that you can bear the risk, open contracts at 5 times, and buy one-fourth of this fund.
For instance, my operation with FIL was to prepare 200 USDT as capital, bought 50 USDT, and opened a contract at 5 times.
Why operate like this? Because buying 50 USDT means you still have 150 USDT margin inside, and it would only get liquidated if the currency drops by 40%.
This way, you won't accidentally get liquidated. Many of my friends like to play with high multiples like 10x, 20x, which can be very exhausting, as you have to keep an eye on the market and can't sleep at night.
Finally, choose to set a stop loss on a 5 times contract, and you basically won't encounter liquidation.
For taking profits, because my own strategy for spot trading is to withdraw profits at 30%, so switching to a 5 times contract means withdrawing at 150%.
Three, recognize the true nature of contract and leverage risks.
A factor that is as important as leverage, yet often overlooked in terms of risk: holding time. Profit and loss = holding time × volatility × position size, which can roughly represent the risk as above, with holding time being a key component.
Sure, 10 times leverage is high risk, but going in for 5 minutes of short-term trading, staying alert, is completely incomparable to directly sleeping with a 10 times leverage; some of the latter are even so extreme as to not set stop losses, and the risk has become almost tantamount to giving away money. When I first started, I used 10 times and 20 times leverage with amounts not exceeding $50, partly because my holding time was short, so I could trade a few hundred times while controlling the risk.
Altcoins have greater volatility than Bitcoin; contracts have greater volatility than spot; this is something to pay attention to before beginners open positions. Some friends tell me that contract risks are high, yet they turn around and fully invest in chasing small-cap altcoins without even reviewing their white papers. The actual risk taken is far greater than playing contracts normally. However, when misjudging market direction, a huge fluctuation can also lead to significant losses, such as the FIL futures rising from 25 to 30 without warning in just a minute, directly leading to one of my trades losing over a third of my capital at that time.
Position size is the most obvious looking factor; the more positions you have, the greater the risk. However, I have seen people say, 'As long as you keep trading contracts, you will inevitably slide toward 100 times leverage' or even say they are doing altcoins with 100 times leverage, which involves another point:
Four, leverage has position limits; you can't open several thousand dollars with 100 times leverage.
At least this is the case for USDT on Binance. All exchanges have maximum position limits for leverage. Taking BTC as an example:
125X is well known, but 'the maximum position you can hold' is 50,000 USDT, which means you can only really use 125 times leverage when you have less than 400 USDT (50000/125). If you don’t change the leverage, even if you have 50,000 USDT, at most you can only hold 1.25 BTC (just when it returned to 40,000 while writing this). Opening only this one position, it’s correct that it says 125x, but you are using 1x leverage, which is essentially useless!
Correspondingly, with BTC 100 times leverage, you can use at most $2500; for ETH 100 times leverage, you can only use $100; altcoins do not have 100 times leverage; most are capped at 50 times, as shown below.
You can only use $100 to open 50 times.
The maximum holdable position is determined by the leverage ratio, exchange scale, and whether the cryptocurrency is substantial enough. Binance is already the largest cryptocurrency exchange in the world. If the multiple you receive exceeds the above too much (like letting you open 100 times BTC leverage with ten thousand dollars) or if there are 200 times or even higher leverage, it’s very likely to be a scam from a black exchange!
Since the conversation is about leverage, it conveniently leads to the next point:
Five, entering 10% with 100 times is not called light position; ten times is ten times!
Unless you have multiple positions, it makes no difference from entering a full position with 10 times leverage; moreover, multi-position trading is usually done by individuals who can at least understand single-position trading.
Position/balance is the actual leverage being used, and this should be used to measure risk.
6. Recognize the boundaries of your current methods.
Returning to my own trading.
In November, a wave of YFI and CVC trading allowed my account to grow from $700 to over $3000 (the previous hole of over 200 dollars was also supplemented back with FIL); then, during the two days of the GRT contract launch in December, the volatility was significant, and I made a total of 7000; at this time, the total number of trades was 4623, with the highest single-day profit being $2769 (on the day GRT launched).
But in the end, I experienced my first single-day loss exceeding a thousand, nearly -$1200, and at one point even lost two thousand five hundred dollars. Faced with such market conditions, recording the worst record also led me to summarize the problems I faced:
There is a severe lack of competitiveness in the contract markets for mainstream cryptocurrencies like Bitcoin and Ethereum; in addition, as account size grows, the profit space for small positions entering and exiting frequently will become increasingly limited; after all, humans cannot compare with quantitative robots, and the advantages of manual trading do not lie here.
Seven, stop-loss, don’t hold your position!
Below is the profit chart up to before the May 19 crash.
On February 1st, early morning, after Doge surged, many people agreed to meet at 9:30 PM.
Buy XRP and hold, whoever closes first is a dog.
Although I didn’t go long because of this, I felt there would be a market at that time, so I started leaning towards going long from 9:30, with leverage not high, just around one time, but it happened to coincide with XRP crashing from 0.6 to 0.4 at 9:31. (Wasn't it said that whoever closes first is a dog?)
Set a record for the highest single-day loss (over -$6000), a single loss exceeding a thousand, and directly two consecutive losses (maximum -$1672.68);
Additionally, on March 18, late at night, thinking ADA would rise, I took a long position, and the position was not big either, but suddenly ADA plummeted from $1.4 to a maximum of $1.1, setting a record for the highest single loss (-$3549.10).
The reason these three trades did not cut losses is due to the belief that 'it will recover' and holding the position.
The time to close positions, whether you can close them or not, is only about ten seconds.
In extreme market conditions, having high leverage positions without stop-losses is a luxury that can only be afforded for a few minutes. I’ve also seen friends go to sleep without setting stop-losses, fully aware of the risks of trading cryptocurrencies. From a perspective of profitability, they seem stronger than me, but their lack of awareness about cutting losses and stop-losses has already determined the outcome.
As for unplanned averaging down, especially leveraging for averaging down, the nature is even worse. Unless your position is large enough to make a turnaround by yourself (like an obscure altcoin) and you have sufficient trading experience, otherwise, it will only lead to quicker losses than holding.
Reiterate: take profits as per the situation, but stop losses must be in place!
Stop-loss must be in place!
This was told to me by a certain big brother. If you see this while browsing Zhihu, just say hello to me, and I will treat you to barbecue, haha.
It was mentioned earlier that at the very beginning, I was best at high-frequency low-position trading, which became increasingly restricted as my account grew larger. Not only that, but even the methods I modified based on account size have started to be limited.
Although I have never abandoned it, the opportunities to use it are indeed rare. When the market is not performing, and I am profitable yet without much to show, I sometimes miss the time when I made the most progress, using short-term trading to steadily increase my balance, dreaming big with a small account.
May was not smooth; the second wave of Dogecoin's violent fluctuations did not yield the expected profits. During the two weeks of slump, I knew I should have done better but didn’t know how to start, and even during the big drop at 7:30 PM on May 19, there were no significant results.
Until the real May 19 crash came, the website became slow, TradingView's K-line chart lagged by several minutes, trading volume counting stopped (actual trading volume surpassed any previous market, including last year's 312), and even the official website's one-minute candlestick chart mistakenly displayed several nearly parallel red candles after recovering.
I almost instinctively thought of the market environment that appeared when I first engaged in high-frequency trading. Last time it was altcoins, this time it is Ethereum contracts, which have trading volumes several orders of magnitude higher and are second only to Bitcoin.
Starting from the first counter, going long on 30 ETH and closing immediately after floating profit;
The second, 30 ETH, floating profit, close;
50 ETH, 60 ETH, the website price was a bit stuck, paused for a moment, took 0.003 ETH to test the speed, and found it could be done, then went for 30 ETH, 50 ETH……
The movements of Ethereum are significant. At that time, although I wasn't too nervous, I should have been quite focused because I didn't even glance at the balance next to me.
When Binance gets completely congested, you stop to find that you've already exceeded your target.
………………………………
Previously on the day Doge surged, I worked all day to earn ten thousand dollars and was so happy I almost couldn’t sleep, although I haven’t had a day of earning so much since then.
As a result, on that day, the previous record was unexpectedly broken at the most unexpected time point with the most unexpected yet reasonable trading method - even though none of the trades used more than 2.5 times leverage, and none of the profits exceeded 20%.
Suddenly, it felt unreal. After getting stuck on Binance, I went to chat with friends. I have other friends I’ve known for years who recently started trading contracts, and he complained about the heavy losses on his spot positions. We chatted casually until early morning when his spot positions almost recovered, and then he went to sleep. After that, I took a screenshot and transferred most of it to my spot wallet, as my current level doesn’t require that much money.
The only regret that doesn’t count as a regret is thinking back to an article I saw on Zhihu (about getting rich through Bitcoin contracts, making a vow), where the author planned to turn 1,000 into 1 million, and I really hope that when I search for it, I can congratulate him.
As a result, I found he had temporarily given up... This matter could only end in a stalemate. I hope that when he returns, the market will be even better than now.
Nine, keep trading records.
Every day, I make several trades, how the profit and loss situation is, why the profit and loss, etc.…
To be honest, I haven't done enough, but many traders who are better than me say that keeping records is very helpful; my own records have also helped me at times. Although no method can guarantee profit (after all, as the number of transactions increases, your opponent's strategy will definitely change), the market has too strong uncertainty; however, it can better reflect your current problems. The more you do, the more you will capture some of the current market rules.
Below are the trading statistics; there may have been instances of mistakenly counting two transactions together during the integration process, but it’s not a big deal:
Total number of trades: 13866, average leverage: 2.06X, starting balance of $1000, average leverage: 0.76X;
Weighted leverage of the principal is 0.46X (i.e., total position divided by the sum of balances at each opening to avoid the situation where opening a bunch of 20 times leverage when having only a few dozen dollars raises the average);
25 transactions with single profits exceeding $1000, 5 transactions with single losses exceeding $1000, three of which have been mentioned, and the other two occurred on January 29 with Dogecoin and during the Ethereum period on May 19;
$1000 to start, in terms of percentage, there were 5 instances of over 10% profit in a single transaction, with a maximum of 16.25% (ETH, 2.44X leverage), and no single transaction loss exceeding 10%, with the highest being 8.58% (BTC, 46X leverage, which was the initial loss when BTC broke through 40,000 mentioned earlier).
Market risks are nothing compared to the crypto space; as for contracts, the 1-9 rule of traditional futures still applies!
Especially for those who haven't entered the crypto space yet, this cannot be considered a good time; the reason for the May 19 crash was related policies, and be cautious of issues like frozen cards. The image below is forwarded, and its authenticity is unclear.
10% of people make profits, 90% of people incur losses, but 90% of those who lose think they are in that 10%.
1. Use spare money for investment: when investing in cryptocurrencies, only use the money you have available; never borrow money or take out loans for trading, as the risks are too high.
2. Carefully select value coins: when choosing investment projects, meticulously select those with potential 'value coins' and formulate a reasonable funding allocation plan. This is what is called the 'Sunny Day Investment Strategy', making your investments more stable.
3. Gradually increasing positions to respond to pullbacks: after entering the market, fluctuations or pullbacks in price are normal. Therefore, allocate your funds reasonably, buy in batches to lower risk.
4. Diversify investments to reduce risk: do not operate with full positions, allocate funds to different projects, so that even if one project has problems, other projects can help you share the risk.
5. Stay informed: frequently monitor news updates in the cryptocurrency space and the latest developments in finance and economics, so you can capture investment opportunities more quickly and make money faster.
6. Go with the trend, don’t confront hard: when investing, don’t confront the dealer or the market trend head-on. Learn to follow the market trend to better seize investment opportunities.
7. Use contracts cautiously: if you choose to trade contracts, be sure to control the leverage ratio. It is recommended to use leverage between 20 to 50 times; do not easily go for 100 times leverage. Steady profits are the way to go.
8. Strictly control positions and avoid random operations: position control is key to investing. In uncertain situations, do not operate casually. Not operating means no risk, and thus, no loss. Also, regularly check your asset status to ensure proper management.
9. Stay calm and clarify entry and exit strategies: it is crucial to maintain a calm mindset during the investment process. Know when to enter and when to exit. Experiences in the cryptocurrency space will help you grow continuously; mindset is more important than operation.
Still the same saying, if you don’t know what to do in a bull market, click on Kui Ge's avatar, follow him for bull market spot strategies and contract passwords, shared free of charge.
