If you want to trade well in cryptocurrencies, there are three things you should never do.
When trading cryptocurrencies, never rush to buy when prices are rising; learn to think counter-intuitively. When others are fearful, you need to be brave and look for buying opportunities; conversely, when everyone is overly excited, be cautious and consider whether it's time to pull out.
When trading cryptocurrencies, never bet all your money on one coin; doing so is too risky. If something goes wrong, it could all be over. Diversify investments; if it doesn't work out in one place, it might in another. This is the way to earn steadily.
When trading cryptocurrencies, never operate fully; always leave some funds available. There are plenty of market opportunities. If you are fully invested and a good opportunity arises or if a strategy adjustment is needed, you will be unable to act, leading to significant losses! Keep some funds available for flexibility to lower opportunity costs.
Trading cryptocurrencies should be steady; don’t think of making a fortune overnight. Take it slow, learn this simple method, and it ensures you can survive in the market for a long time and make money.
Next, let's delve into the wisdom of short-term trading.
Rule One, during high-level consolidation, a new high may emerge; while hovering at a low level, it may indicate a new low. Observe changes quietly; wait for the direction to become clear before taking action; this is a sound strategy.
Rule Two, remain calm during sideways movement; a tranquil heart allows extraordinary achievement. Most people fail because they cannot withstand solitude; only by maintaining this tranquility can one achieve greatness.
Rule Three, the K-line's fluctuations indicate when to buy and sell. A bearish daily close may present a good buying opportunity; if the daily closes bullish, consider reducing your holdings, as this aligns with the market rhythm.
Rule Four, a slow decline leads to a slow rebound; a rapid decline can lead to a strong rebound. Market fluctuations have their own laws; understanding this allows you to seize opportunities.
Rule Five, pyramid-style accumulation, the true essence of value investing. Layered increases, stable accumulation, trading time for space, patiently waiting for the flowers to bloom.
Rule Six, after rises and falls, there must be sideways movement. At this time, there is no need to sell everything due to high prices, nor to heavily invest due to low prices. Because after sideways movement, a change is imminent. If the market turns down from a high position, stop losses in time to preserve strength for future battles.
Why do I keep losing money in the cryptocurrency market?
1. Addiction to secondary market contracts leading to liquidation.
Many people play contracts in the cryptocurrency market, fantasizing about getting rich overnight, but the reality is that the only outcome of contracts is liquidation; a slight market fluctuation can instantly clear your account.
2. Being stuck with too many altcoins at the peak.
Many long-time retail investors feel that altcoins have larger gains than BTC or SOL, so they heavily invest in altcoins or even all-in, and they also like to catch bottoms. However, this round of altcoins has been underwhelming. When they drop, they don't have a bottom; fundamentally, this is due to the lack of liquidity in this round, and the secondary market lacks a wealth effect. Whatever you buy in the secondary market is at a high price and gets trapped. All new coins listed on a certain platform start high and drop continuously, with no end in sight, prompting fast-acting retail investors to flock to the primary market.
The various altcoins in the secondary market, VC coins have low liquidity and high FDV; many VC coins have dropped 90%, yet their market value remains unchanged. It is these market makers, VCs, and exchanges that collude to take advantage of retail investors. Check out the various altcoins listed on a certain platform over the past year; look at their K-lines and see how much they have dropped.
Now, apart from some foolish retail investors, are there still people willing to buy these altcoins at high prices in the secondary market? Just look at the recent year; which of the new coins listed on a certain platform hasn't started to drop since the day it was listed?
3. Blindly believing in news can lead to losses.
The cryptocurrency market is filled with mixed information. Many people love to follow the trend and listen to insider news, resulting in being manipulated by market makers and losing everything. The market is never short of stories; it is short of those who can see through them.
4. Lack of clear strategies and risk management.
Many cryptocurrency investors trade solely based on feelings, with no strategy at all.
Scared of drops when prices rise, adding positions when they fall, only to be slapped by the market repeatedly, getting deeper and deeper.
How can I recover from losses and achieve profits?
Transitioning from the secondary market to the primary market, seizing new wealth opportunities. If you have been repeatedly losing in the secondary market, it is time to consider the opportunities in the primary market.
The advantages of the primary market compared to the secondary market:
In the primary market, participants often can buy meme coins with potential for hundredfold or thousandfold returns at lower prices. There is greater potential for profits, with opportunities to catch big dogs with hundredfold potential.
Risk is controllable. By continuously learning from experts, you can enhance your understanding and skills, thus reducing investment risks.
Learn risk management; preserving your capital is essential for the future. The cryptocurrency market is not a casino; never put all your funds into one coin. Allocate capital wisely, set take-profit and stop-loss points, and always remember that your capital is the foundation for survival in the market.
The cryptocurrency market is not a place where anyone can easily make money, but it is indeed a market full of wealth opportunities. Those who truly make money never rely on luck, but on correct strategies, long-term vision, and precise grasp of trends.
In the cryptocurrency market, you need to find a way to earn 1 million in capital, and from a few thousand to earn 1 million in capital, there is only one path, which is rolling positions.
Once you have 1 million in capital, you'll find that life seems different. Even without leverage, a 20% rise in spot trading yields 200,000, which is already the income ceiling for most people in a year.
Once you can grow from a few thousand to 1 million, you’ll grasp some profitable ideas and logic. At that point, your mindset will calm down significantly, and thereafter, it’s just about copying and pasting.
Don't always aim for millions or billions; start from your actual situation. Boasting only makes the boastful comfortable. Trading requires the ability to identify the size of opportunities; you can't always trade with light positions or heavy positions. Normally play with smaller stakes, and when a big opportunity arises, bring out the big guns.
For instance, rolling positions can only be done when big opportunities arise; you can't always roll. Missing out is fine because you only need to roll successfully three or four times in your life to go from zero to tens of millions, which is enough to elevate a regular person into the ranks of the wealthy.
The concept of rolling positions itself carries no risk; not only is it risk-free, but it is also one of the correct approaches to futures trading. The risk lies in the leverage. You can roll with 10x leverage or 1x; I generally use two to three times, capturing profits of dozens of times. If not, you can even use a fraction of a leverage, which has nothing to do with rolling positions. This is clearly your choice regarding leverage; I have never suggested using high leverage for operations.
I always emphasize that in the cryptocurrency market, only invest one-fifth of your money and only one-tenth of your funds in futures. At this stage, the funds used for futures only account for 2% of your total capital, and futures should only use two to three times leverage. Also, only trade Bitcoin, which minimizes risk to an extremely low level.
The following are methods for rolling positions:
Increasing positions with floating profits: after achieving floating profits, you might consider increasing your positions. However, ensure that your holding cost has been lowered to reduce the risk of losses. This does not mean to blindly increase positions after making profits, but to do so at the right time.
Bottom position + T trading rolling operation: divide capital into multiple parts, keeping a portion as a base position, while another part engages in high-selling and low-buying operations. The specific ratio can be chosen based on personal risk preference and capital size. For example, one can choose a half-position rolling T strategy, a 30% base position rolling T, or a 70% base position rolling T. This method can lower holding costs and increase profits.
I believe there are mainly two types of 'appropriate timing':
Increase positions during convergence breakout trends, and after the breakout, quickly reduce the added positions during the main upward wave.
Increase trend-based positions during pullbacks in trends, such as buying in batches during moving average pullbacks.
There are various specific methods for rolling positions; the most common is to adjust holdings. Traders can gradually reduce or increase their positions based on market changes to achieve profitability. Traders can also use trading tools like leverage to amplify gains, but this also increases risk.
I've been trading cryptocurrencies for over a decade, from facing liquidation to achieving financial freedom through trading. By 2024, my funds multiplied by 50 times; if not for withdrawing funds twice to buy a house, it could have been 85 times.
I also tested the above methods with a small account: starting with 50,000, I reached 10 million.
After years of navigating the cryptocurrency market, I've summarized an effective investment strategy.
These iron rules apply not only to novices but also help veterans maintain clarity in a complex market environment and achieve stable returns.
1. Capital management: act within your means, diversify risks.
Concentrate on holding one coin for under 100,000: with limited capital, focus on holding one potential coin and deeply research its fundamentals and technical aspects.
200,000 to 300,000, play with two coins: when you have a bit more capital, you can diversify into two coins to lower the risk of a single coin.
Within 500,000, three to four coins are sufficient: when capital increases further, holding a maximum of three to four coins avoids excessive diversification.
No matter how much capital you have, do not hold more than five coins: regardless of the amount of capital, the number of coins held should not be too many to avoid management difficulties.
Focus capital during bull markets, and operate lightly during bear markets: in bull markets, concentrate funds on the most promising coins; in poor market conditions, operate with light positions to minimize losses and exit quickly.
2. Trend is king: follow the market, do not act against the trend for higher investment success rates.
Read news and learn technology: understand market dynamics and technical indicators.
Blindly catching the bottom or chasing highs, following the trend.
A drop and rebound often lure in buyers, while a rise and pullback may be a trap: do not stray from your investment strategy. Do not guess the market makers' intentions: the operations of market leaders are unpredictable; focus on your own strategy.
3. Only act when the market is active; be flexible to seize opportunities more easily. Act during market activity: when market enthusiasm is high, investor sentiment builds up, and don't cling to old patterns. Operate flexibly and adjust strategies in response to market changes.
4. Stop-loss and take-profit: Protect your principal and lock in profits.
Set a fixed stop-loss point: stop losses promptly during losses to avoid greater losses and protect profits.
Gradually raise the selling price: increase the selling price gradually when in profit.
5. Buy quickly and sell decisively: make quick decisions to avoid hesitation. Buy quickly: decisively purchase when opportunities arise to avoid missing great chances.
Sell decisively: sell decisively when the expected target is reached or the market turns, to avoid losses due to greed.
6. Deliberate deeply before increasing positions.
Ask yourself: before adding positions, consider whether you are willing to invest new funds under the current circumstances. If the answer is yes, then consider increasing your positions.
7. Long-term focus, short-term assistance.
Avoid frequent short-term speculation: short-term operations can easily lead to losing direction and affect your mindset.
Follow the trend: large sums should follow the market trend and be held long-term in promising coins.
8. Do not blindly catch the bottom; treat the market rationally.
A large drop does not mean you can catch the bottom: a significant market drop does not necessarily indicate that the bottom has been reached; blindly trying to catch the bottom may result in further losses.
Few people make money in the market: only a small number of people can truly profit in the market, so remain rational and do not blindly follow the trend.
I am Xiao O, a professional analyst and educator, a mentor and friend on your investment journey! As an analyst, my fundamental duty is to help everyone make money. I will help you resolve confusion and losses, speaking with strength. When you feel lost and don't know what to do, follow Xiao O, and I'll guide you.
