I have always wanted to explain the logic of trading thoroughly. During this time, I've been considering how to explain it so that everyone can understand it clearly, grasp the essence, and still keep it simple and accessible.

When we start trading, including the trading masters and novices I have encountered, whether in spot trading or contracts, it is very difficult to sustain profitability before achieving enlightenment. The main issue is not knowing how to navigate the future, what direction to take, and how to complete it step by step.

If you are coming into speculation for quick profits during a bull market, and cannot calm your mind to learn and grow, and are not very interested in trading, this article may not be suitable for you. It's best to skip it to avoid wasting your valuable time.

To achieve financial freedom through trading, one must go through seven stages. I found that many traders I encountered during my live streams have not even passed the first stage, yet they are thinking about financial freedom, which is a bit unrealistic and far-fetched. These seven stages are: Theory, Practice, Cool-headedness, Rationality, Judgment, Strength, and Luck.

1. Theory

This is relatively easy to understand, just like basic knowledge. As Chinese, we need to know basic information such as who the President is, the national anthem, the national flag, the national emblem, teachers, Chinese language, basic history, etc. In trading, we also need to learn basic theories. The origins of cryptocurrency, its connection to international finance, trading technical indicators, theoretical principles, trading techniques, market distribution, and patterns of price fluctuations, etc. Only by mastering these basic theories can we say we have completed the first step.

2. Practice

This doesn't need much explanation. It's about applying the learned theories in practice, finding buying and selling points. In the practical process, one will discover many inconsistencies with the theory, leading to corrections and summaries.

For the average person, these two stages can be achieved with some persistence, and they do not require extraordinary talent. In reality, many traders I have encountered have not reached these two stages, and thinking about achieving financial freedom is still far off.

3. Cool-headedness

It can be understood as calmness, maintaining established goals and execution power under any circumstances, not swayed by emotions or feelings in trading strategies, but following probabilities in trades. Stop losses when needed, take profits immediately, and not pay too much attention to other people's opinions and comments.

4. Rationality

When trading, maintain rationality, reasonableness, and an anti-human perspective on trading. Do not be easily influenced by FOMO nor impose FOMO on others. If mistakes occur, pause and summarize. If profits are made, pause and summarize. Constantly examine one’s behavioral models, trading models, and strategies throughout the trading process to ensure they are in place.

These two points start to increase in difficulty. After completing stages one and two, this stage requires controlling human nature, restraining oneself, and continuous self-reflection. This stage is very grueling. Many traders understand the theory and have rich practical experience but cannot sustain profitability, which results in being stuck at this stage. The most common practice at this stage is meditation.

5. Judgment

Making judgments on price fluctuations is this stage. It seems like we do this every day; it's either up or down, or sideways. It doesn't seem difficult, but the challenge lies in making the correct judgment. This level is considered a talent level, not belonging to the technical or emotional realm, requiring comprehensive qualities.

6. Strength

On the road to success, bumps are more common than joy. Even if you achieve your goals, the joy is just a moment; what you really enjoy is the process of climbing. Because there are many bumps, strength is needed, especially when one possesses points 1-5 but still cannot sustain profitability, making it necessary to reach the second level of talent skills, which is strength! Internally seeking, constantly strengthening one's inner self, insisting, as long as points 1-5 are solid, one must face ridicule, insults, and failures with a strong head held high.

7. Luck

The seventh point belongs to metaphysics. In the process of trading, we often find that sometimes there is an element of luck. For example, usually waking up at six to check the market, but yesterday I drank too much and woke up at nine, only to find the market had dropped to a low point for me to buy. Or waking up in the middle of the night to see a drop, buying in, and then finding out in the morning that it has risen. Or entering a currency that I don't quite understand and making a profit without much clarity, all belong to this category. Of course, it's important to note that if points 1-6 are achieved, the seventh point becomes very important as it can speed up your path to freedom. However, it is elusive and cannot be easily understood.

Conclusion

To achieve financial freedom through trading, a solid theoretical foundation and practical experience are essential. Controlling emotions, combined with calm and correct judgments, will make you more confident. When facing setbacks, it is crucial to be strong and not easily defeated. Meditate and summarize, and finally, add a bit of luck to achieve success. Do not think you can skip any stage and reach the shores of wealth directly. Give yourself some time for continuous refinement! Believe you can achieve your desired results in the cryptocurrency world.