If your capital is under 50,000, and you want to achieve quick success in the crypto world through short-term trading, then please read this post carefully. After reading, you'll have a sudden realization about the essence of short-term trading!
I was born in 1987, and I've been in the crypto world for 11 years, fully trading cryptocurrencies to support my family for 5 years!
Not choosing finance or computer science in college is one of my life's greatest regrets. I started to touch Bitcoin and blockchain online early on, and the enchanting candlestick charts and disruptive concepts fascinated me. With infinite longing for the crypto world, I participated in trading early on, thus beginning this journey full of challenges and opportunities.
Like most friends who have just entered the market, at first, everyone is fascinated by various technical indicators and on-chain data, constantly backtesting, trying to find the 'holy grail'; eager to buy 'low-priced' altcoins, or those that have already dropped more than 90%+, believing their 'margin of safety' is higher. The harsh reality tells me that most of these initial market perceptions are wrong and dangerous.
Only later did I painfully realize: if you want to quickly and relatively controllably gain profits in the crypto world with huge fluctuations and 24/7 trading, focusing on short-term hot trends is almost the only feasible path (for small funds). The core of short-term trading is identifying the mainstream narrative tracks of the market and precisely grasping the sentiment cycle. The mainstream narrative breeds leading coins, and the crazy rise of leading coins, in turn, reinforces and spreads that narrative. The contributions that maximize your account and yield the highest efficiency often come from seizing those leading coins in several phases. In a raging bull market, they provide the strongest explosive power; during localized rebounds, they often start first and are relatively 'resilient' (Note: 'safety' in the crypto world is relative!). In 2021, I captured the most rapid upward wave of my career in leading projects like SOL and MATIC.
Buying the same coin during different market sentiment phases and narrative cycles yields vastly different results! The sentiment cycle tells you when to take bold action, even leverage (caution!); when to hold back, or even short (if capable); and when to completely exit and observe. The mainstream narrative of the market tells you where capital is attacking (is it AI, MEME, new public chains, or Layer 2?). This is the correct, top-down speculative thinking. Unfortunately, many friends get it completely wrong, going against the trend and fighting market sentiment, and the result is naturally being ruthlessly harvested.
There's a saying that impressed me: 'If you don't occupy the high ground of cognitive awareness, FUD (Fear, Uncertainty, Doubt) and FOMO (Fear of Missing Out) will occupy it for you.'
95% of contract trading beginners don't survive 90 days...
Let me describe the life of a contract trader in the crypto world:
But if you're doing contracts, you'll basically only sleep 2 hours a day, with the alarm going off every 15 minutes.
Watching the K-line fluctuate, feeling anxious, watching the spike, my heart racing. I'm deeply afraid of being liquidated.
Your savings are only 3000 yuan, which is the last capital for riding an electric bike to deliver takeout.
No girlfriend, no time to spend with family, no sex life, not interested in anything else.
Maybe you smoke and chew betel nut, with bloodshot eyes.
One night you get liquidated, and the next day you put on a kangaroo costume to deliver takeout.
But I'm so tired, I haven't eaten well for a long time and I'm already malnourished.
But in the cold wind and under the scorching sun, you can only endure.
You risk dark circles under your eyes, misdeliver an order, and receive a bad review from the customer.
You were deducted 50 yuan, you need to place 10 more orders to earn it back.
You have no choice, but at this moment, the crypto bull market has returned.
You no longer have the capital to enter the market, your credit card is overdue, and you haven't repaid your friend's money.
You've already squandered your parents' money, and you feel no warmth in this cold city.
People who play in the crypto world can see their assets increase by 50 or 100 times overnight, or they can instantly drop to zero.
Playing contracts in the crypto world is like playing with your heartbeat, thrilling and more stimulating than riding a roller coaster.
Have you ever experienced consecutive losses and frequent liquidations?
Then you feel depressed and regret your decision?
You are eager to recover your losses, but end up sinking deeper?
You repeatedly fantasize about the scenarios after success, but reality keeps slapping you in the face?
For beginners, avoiding contract trading and starting with spot trading is a more prudent choice, backed by multiple reasonable logics.
Contract trading hides multiple risks for beginners.
The high leverage characteristic of contract trading is a 'double-edged sword' that beginners find hard to control. Contract trading usually allows investors to use leverage, meaning a small amount of capital can control a larger trading scale. For example, 10x leverage means that a 10% price fluctuation could lead to the risk of losing all of the investor's principal. Beginners have a weaker ability to withstand market fluctuations and lack an intuitive understanding of leverage risks, making them susceptible to amplified losses from short-term price movements.
The forced liquidation mechanism combined with the risk of 'spike' further exacerbates the dangers of contract trading. As mentioned earlier, 'spike' can lead to severe price fluctuations within a short time, and in contract trading, this kind of volatility can easily trigger forced liquidation. Beginners often lack sufficient foresight for sudden market situations and lack experience in dealing with 'spikes', which may cause them to miss recovery opportunities after rapid price corrections due to being forcibly liquidated, resulting in irreversible losses.
Moreover, the complexity of contract trading rules far exceeds beginners' understanding. In addition to leverage and forced liquidation, it also involves margin calculations, expiration delivery, perpetual contract fees, and other specialized content. If beginners rush into the market without fully understanding the rules, they may incur losses due to operational errors (such as insufficient margin or choosing the wrong delivery time), and these 'non-market factors' leading to losses are particularly regrettable for beginners.
Spot trading is an ideal choice for beginners.
The risk boundaries of spot trading are clear, making it more suitable for beginners to establish risk awareness. In spot trading, investors buy the cryptocurrency itself, and the maximum loss is just the invested principal, without the risk of excessive losses or liquidation caused by leverage. This 'controllable loss' feature allows beginners to gradually accumulate experience in the market without constantly worrying about the extreme situation of 'being liquidated overnight.'
Spot trading is simple to operate, which helps beginners focus on learning market rules. The logic of spot trading is straightforward: buy low and sell high to earn the price difference, without needing to consider complex parameters like leverage ratios and margin maintenance. Beginners can concentrate on studying core content such as market supply and demand, news impacts, and technical indicators, gradually understanding the underlying logic of price fluctuations, laying the foundation for more complex trading later.
From the perspective of cultivating a trading mindset, spot trading can better help beginners establish rational habits. The high volatility of contracts can easily lead to emotional trading; beginners often impulsively increase their positions due to short-term profits or panic sell due to losses. In contrast, spot trading has a relatively smooth rhythm, and the psychological impact of price fluctuations is smaller, making it easier for beginners to cultivate a 'long-termism' mindset and avoid falling into a vicious cycle of chasing high prices and selling low.
The opportunity has come, assets doubled! Follow Biao Ge closely and easily make big money.
Continuously follow: PROVE, TOWNS.