If you treat cryptocurrency trading as a game, then it is definitely a high-risk, high-reward gamble.
So, what kind of game is this? Let's break it down from several aspects:
1. Rule Setting: High volatility, unregulated, strong competition.
The core characteristics of the cryptocurrency world are:
Extreme volatility: A daily fluctuation of 20% is normal, and contract leverage can make someone rich in a day or wipe them out instantly.
2. Role Setting: Who is the player, and who is the prey?
In this game of cryptocurrency, the winning probabilities of different players vary greatly. They can generally be divided into the following categories:
(1) Prey: 95% of retail investors.
They hear stories of getting rich in the cryptocurrency world, enter the market with fantasies, and end up becoming the 'liquidity' of the market.
They like to chase highs and cut losses, FOMO (fear of missing out) when prices rise, and panic sell when prices drop, engaging in emotional trading.
Seeing others getting rich, they go all in, only to be harvested by the market makers.
Survival difficulty: Extremely high (most will be eliminated by the market).
(2) Predators: Market makers, whales, and liquidity providers.
They control market sentiment and harvest retail investors through techniques such as pump and dump, fake breakouts, and traps.
Essentially, the money lost by retail investors is profit flowing into their pockets.
Survival difficulty: Low (as long as the market exists, they will always make money).
(3) Gambler-type traders: High-leverage players.
They seek to make huge profits with small amounts of capital, often using 10x or 50x leverage.
If they time the market correctly in the short term, they may quickly double or even increase their investment tenfold, but most will eventually go to zero.
Survival difficulty: Extremely high (money earned by luck will eventually be lost back through skill).
(4) Rational investors: Long-term thinkers.
They have their own trading strategies, do not chase highs and cut losses, but instead position themselves based on market cycles.
They hold mainstream assets like Bitcoin and Ethereum, knowing that the cryptocurrency market is growing in the long run.
Survival difficulty: Medium (requires strong patience and understanding).
3. Victory Conditions: How can you survive in the game?
To survive and make money in the cryptocurrency world, you need to follow these survival rules:
(1) Understand your winning probability and do not open leverage recklessly.
(2) Do not let market sentiment control you.
In a bull market: The market is filled with greed, retail investors FOMO into the market; you must remain calm and reduce positions at highs.
In a bear market: The market is extremely fearful, and retail investors panic sell; you need to have patience to buy low.
(3) Do not be cannon fodder for short-term trading.
80% of short-term traders lose money because of the extreme volatility in cryptocurrency, and ordinary people simply do not have the ability to fight against market makers.
(4) Understand cycles and go with the trend.
Bull Market: Suitable for holding positions, and one can even consider adding positions in batches.
Bear Market: Suitable for dollar-cost averaging and stealth positions, rather than panic selling.
Sideways market: Do not make random moves; patiently wait for significant market movements.
(5) Do not be brainwashed by the 'get rich quick' myth.
Most people enter the cryptocurrency world because they see others getting rich overnight, but in reality, only a very few get rich, while the vast majority face liquidation.
4. Ultimate Conclusion: The cryptocurrency world is a survival of the fittest, and only a few can win.
If you can understand the rules of the market, strictly adhere to discipline, and have patience, you may become a winner.
In the cryptocurrency world, understanding determines life and death, discipline determines wins and losses, and patience determines wealth.
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