This is an article that can light a lamp for traders who are trapped in a dead end of trading, feeling painful and confused. (I will tell everyone at the end of the article why I wrote this article.)
The vast majority of traders have their understanding of trading stuck at the level of probability.
And naively believe that this is the ultimate secret of trading.
Not at all; it is precisely because the understanding of trading remains at the level of probability.
Thus, the results of trading are also sometimes earning and sometimes losing, with the capital curve forever spinning in place.
True winners engage in certainty.
Only with certainty can one securely and steadily earn money.
In the ever-changing field of cryptocurrency, the vast majority of traders often have their understanding of trading stuck at the level of probability. They naively view probability as the ultimate secret of trading, yet this is precisely the root cause of their stagnation in trading. Because their understanding of trading only stays at the level of probability, trading results are like a solitary boat drifting in a stormy sea, sometimes earning and sometimes losing, with the capital curve forever spinning in place, making it difficult to achieve a qualitative breakthrough.
The true winners are actually engaged in certain trading in the cryptocurrency world. Only with certainty can one achieve steady returns and realize stable wealth growth. In investment trading within the cryptocurrency world, the return to value has certainty; this is an important underlying logic. However, its catch lies in the uncertainty of time, like waiting for dawn in the dark without knowing when it will arrive. For example, in the traditional investment field, the world-famous investment master Warren Buffett relies on the long-term substantial float funds from his insurance company, which provides a solid financial backing for his investments. At the same time, his long life is also a key factor. With the power of compounding, often referred to as the eighth wonder of the world, under an average annual return of 20%, he has achieved his reputation as the 'Oracle of Omaha' after the age of fifty through the passage of time. In the cryptocurrency world, we can also see similar value-return logic; some digital currencies with solid underlying technology and broad application scenarios may experience significant price fluctuations in the short term due to various factors, but in the long run, their value often gradually becomes prominent, returning to a reasonable range.
Speculative trading in the cryptocurrency world also has certainty, which is the emergence of trends. However, the troublesome catch is that the magnitude of trends is difficult to predict, and we cannot know in advance whether this trend will cover all previous small losses. In a sense, the world's richest man, Masayoshi Son, is a master in the field of risk speculation. Although he conducts rigorous research on all the projects he intends to invest in and mostly invests in popular projects, except for a few investments like Yahoo and Alibaba, the vast majority end in losses. However, just Alibaba alone contributed 95% of SoftBank Group's market value at one point. From the perspective of risk-reward ratio, its returns reached an astonishing 1700 - 2000 times. In the cryptocurrency world, there are also many similar cases, such as some emerging digital currency projects that were not favored by the market during their early development and had depressed prices. However, as the project progresses, once the market forms a trend, prices can rise sharply. If we draw an analogy between Masayoshi Son's investment strategy and speculative trading in the cryptocurrency world, it resembles a system with low win rates and high risk-reward ratios.
Cognition plays a decisive role in the cryptocurrency world; it determines the amount of wealth each person can grasp. In this world full of temptation and risk, wealth beyond cognition, even if earned by luck, will ultimately be lost by luck. Beginners often believe that speculative trading has a 100% win rate certainty, thus exhausting all their efforts to pursue win rates. However, after countless attempts prove fruitless, they gradually realize that speculative trading is destined to have a low win rate, leading to a shift in their understanding of trading towards probability. Since cognition remains at the level of probability, trading results will inevitably fall into a cycle of sometimes earning and sometimes losing.
(Memoirs of a Stock Market Big Player) Although it was born in traditional financial markets, the concepts within it also have profound guiding significance for speculative trading in the cryptocurrency world; it can be considered the Bible of speculative trading. The core points in the book are two: holding and increasing positions with floating profits. The core of the Turtle Trading Rules is also holding and increasing positions with floating profits. Holding is essentially betting on trends, believing that the power of trends will drive prices in a favorable direction; while increasing positions with floating profits is about managing the risk-reward ratio, allowing profits to be maximized when the trend arrives. In the cryptocurrency world, once we identify an upward trend, firmly holding onto our digital currency and increasing positions with floating profits according to certain rules during the price increase can potentially lead to substantial returns when the trend ends. Thus, the core of speculative trading in the cryptocurrency world is mainly reflected in these two points. First, adhere to a trend trading style, as trends in the cryptocurrency world have certainty; following trends allows one to act accordingly. Second, be adept at using strategies such as increasing positions with floating profits to maximize the risk-reward ratio, thereby achieving guaranteed profits. Of course, the method for achieving a large risk-reward ratio is not limited to increasing positions with floating profits; for instance, setting reasonable stop-loss levels while controlling risks and allowing profits to run as much as possible is also an effective way to improve the risk-reward ratio. However, the extent to which one can maximize the risk-reward ratio when a trend emerges not only reflects the trader's level but is also the true path to success in speculative trading in the cryptocurrency world. Only by ensuring that profits cover losses can speculative trading in the cryptocurrency world have certainty, and only with certainty can one produce guaranteed results and achieve stable wealth growth.
Do not treat price as a target, nor should you consider the ups and downs as everything. However, real profit is not based on short-term fluctuations, but on the skills and experience you can learn from each rise and fall. Therefore, do not consider chasing prices as a means to make money. I've seen countless retail investors who chase trends, but the real winners are those who quietly accumulate experience in the valleys because they know opportunities will come sooner or later. Do not treat emotions as a strategy; do not let momentary impulses ruin your chance to make big money. You must first learn to calm down and formulate your strategy, and do not let market emotional fluctuations affect you. Real profit is not a one-time explosion, but a calm analysis and precise strike.
Many people lose in the cryptocurrency world because they do not manage their positions, do not know to pay attention to news, cannot read various indicators on the charts, love to hold onto positions, over-invest, and do not set take-profit or stop-loss orders. This is the reason you are losing money. A master teaches the basics, but cultivation depends on the individual.
You don't have to stay up all night staring at the charts guessing trends, nor do you need to struggle over whether your entry and exit points are precise. Only seize opportunities where the trend is clear; hold back in bear markets and maintain your positions in bull markets. In the next wave of market movement, I will say, let’s ride the rhythm together and let our profits outpace 90% of retail investors!
Follow me @加密大师兄888 , remember, the cryptocurrency world is not short of opportunities; what’s lacking is the execution to keep up.