Making money from trading coins refers to the price differences generated during the trading process. In simple terms, if you can make money, someone else has paid a high price to buy your position; if you profit, someone must incur a loss.
Assuming there are ten participants in the cryptocurrency space, each with $10. If a few people make money, one person earns $2 from each of the other nine, resulting in this person having $28, while the other nine have $8 each, allowing the game to continue. If most people make money, nine people earn $2 from one person, resulting in nine individuals having $11, while the one person has lost everything and owes $8, making it impossible for the game to continue.
A few people make money, and the market is sustainable; when most people make money, the market will collapse.
It's similar to the lottery; as long as most people win, the lottery company cannot continue to operate. Only when the majority lose and a few win can the lottery company maintain its business.
Therefore, the cryptocurrency market will exhaust all methods to ensure that the majority of people lose money.
How to become one of the few who make money?
There are many factors contributing to losses in cryptocurrency trading. In summary, they can be boiled down to the following six points; as long as you go against these six points, you can become a unique individual.
1. Serious short-term thinking
Simply put, we should focus on the long term. What everyone discusses and sees is how much it has risen today or how much it has fallen tomorrow... not how this coin will perform in six months or a year. People can observe those so-called 'gods' in the crypto world who have achieved financial freedom; none of them made money in just three to five days; they all relied on time. Allocate positions reasonably, focusing on the long term while also considering short to medium-term strategies; if you can accurately gauge short-term trends, you should also follow them.
2. Chasing highs and cutting losses
Chasing highs and cutting losses is a common mistake among cryptocurrency investors. When they see a coin soar and everyone discussing it, they jump on the bandwagon. After being stuck with a loss of 10% or 20%, they are reluctant to cut their losses and instead hold on, waiting for the day they can break even. When the price continues to drop, leading to a loss of 50%, 60%, or even 70%, they then conclude that the coin is no good and cut their losses at the bottom; this cycle repeats itself, and there really isn't a good solution to the issue of chasing highs and cutting losses—it's a psychological problem.
3. Insufficient cognition
Many people invest without thinking critically; they simply follow what others say. Today, a certain influencer claims this coin is good, and they buy it immediately! Tomorrow, a rumor says that coin will rise, and they follow suit... As for why this coin is good or why that coin will rise, they have no idea; this mindless investment approach is bound to result in losses. While we can use others' insights as references in our investments, we must first establish our own understanding; no matter how powerful the KOL is, they first establish their position before you, and after they sell, they remind you—you're just helping them.
4. Inner restlessness
Impatience seems to have become the norm in the cryptocurrency world. Many people enter this market with the mentality of getting rich overnight, yet they are unprepared for the possibility of losing everything in an instant, and they lack the ability to truly get rich overnight! After buying a coin, they hope that the price will rise immediately, double in three days, or increase tenfold in half a month... If the coin does not rise after half a month or even incurs a loss, they start making excuses for themselves and vent their frustrations, blaming the project team for not managing market value, cursing the market manipulators, and complaining about inaccurate predictions from influencers... Having seen too many stories of overnight wealth in the cryptocurrency world, and with seemingly tenfold and hundredfold coins emerging at nearly every moment, they subconsciously treat the crypto market as a 100% win casino, believing that as long as they buy coins, they can make money, without recognizing it as a real financial market where bloodthirstiness is the essence.
5. Not learning
Previously, a media outlet conducted a survey on investors' understanding of digital currencies. Among 778 randomly selected digital asset investors, less than 10% could quickly and accurately describe what 'Bitcoin' is. Only 17 individuals could clearly explain what 'blockchain technology' is. Although the sample size is small, it sufficiently illustrates the current state of investors in the crypto space. If you don't even understand what you are investing in, where does your belief come from? Without belief, how can you hold onto assets, regardless of how low the price or how good the coin is? Learning is an eternal treasure, and only through continuous learning can one avoid being taken advantage of.
6. Lack of sound investment philosophy
Most people do not have a comprehensive investment plan before investing, and they completely follow their instincts. This instinctive investment approach is likely to lead to significant losses when unexpected situations occur. Only by summarizing a set of investment strategies suitable for oneself can we cope with various circumstances, whether the market rises or falls, allowing us to maintain a calm mindset and avoid making wrong choices due to emotional influences.
Old Bo only engages in real trading; the team still has spots available, hurry up to join.