From my personal experience, the end of trading cryptocurrencies is not liquidation but wealth.
It's not a passion for trading cryptocurrencies, but a passion for making money and improving the living standards of oneself and one's family. The ways to earn money in this world are just a few.
1. Starting a company leads to overcapacity, shrouded by the pandemic, and crazy competition. Opening a company nowadays is akin to courting death.
2. Starting a small food stall is possible, but if you can't rent a good location, a poor location won't attract business. Street vendors are possible, but can you really handle the days of eating and sleeping outdoors, covered in grease?
3. The self-media entrepreneurship is crazily competitive, there are more self-media competing for traffic than traffic itself. It seems those big accounts are glamorous, but only they know the hardships behind it. For instance, I answer questions sincerely, but it doesn't earn me much appreciation.
4. Working a job is certainly fine, it's like having a crisis management person (the boss) to support you, but a job can only give you a salary; can it give you wealth? It can't. Of course, if you are a technical expert, a highly educated individual, or a sales champion, then it can work.
However, 99% of the world's people are not.
Six years ago, I gave up a high-paying job in the eyes of friends and family to trade cryptocurrencies full-time, simply because I had a flash of insight into the underlying secrets!
At this moment, adhering to the principle of helping others helps oneself, I am revealing the refined trading methods I've discovered. Each one is a precious insight built with real money, understanding them will help you avoid four years of setbacks!
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Beginners in crypto contracts must take a look at leverage.
What is leverage? Simply put, it is 'borrowing power.'
Imagine this: With 100 dollars (margin), you can control assets worth 500 dollars through 5x leverage. If it rises by 10%, you earn 50 dollars (equivalent to a 50% profit on the principal); however, if it falls by 10%, your 100 dollars is wiped out (liquidation).
Why should beginners be extremely cautious?
1. The speed of loss amplification far exceeds imagination: A slight market fluctuation could wipe out your principal. This is not a scare tactic; there are many bloody lessons.
2. 'Going to zero' is not a legend: Under high leverage, a significant fluctuation can wipe out your account, leaving no chance for recovery.
3. Emotions are the biggest enemy: when in loss, it's easy to 'lose control' and want to leverage to recover, which often leads to deeper traps.
How to use leverage in a relatively 'reasonable' way? (Core principles)
1. Engrave 'low' in your mind!:
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Beginners are strongly advised to start with a leverage of 1-5x! ** Don't look down on it! First, feel the market fluctuations and the power of leverage. With 5x leverage, a 20% price reversal will lead to liquidation, which is already risky.
Veterans also recommend keeping it within 10 times. ** Real experts do not rely on high leverage to gamble but on strategy and risk management. Exceeding 20 times? That’s really not much different from gambling; be extremely cautious!
2. Position management is crucial!:
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The amount invested in a single trade should always be just a small part of your total capital! It is recommended not to exceed 5%-10% (for example, if you have 10,000 USD, use only 100-500 USD for a single contract). Never go all in!
High leverage must be matched with lower positions! ** If using 10x leverage, the position should ideally be halved compared to using 5x. Ensure that even if you incur a loss, it won't be devastating.
3. Stop-loss! Stop-loss! Stop-loss! (Important things are worth repeating three times!)
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Always set a stop-loss when placing an order! This is your only 'safety rope.' Based on your risk tolerance and technical analysis (e.g., slightly below support levels), preset your maximum acceptable loss point, and let the system execute it automatically!
Never move stop-loss to hold onto a position! Having fantasies during losses often leads to catastrophic consequences.
4. Recognize the trend and go with the flow:
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Leverage is more suitable for relatively clear and smooth trending markets. Using high leverage in a volatile market is a common way to get slapped.
Do not leverage against the trend! Don't think that just because prices have fallen a lot, you can definitely catch the bottom for a rebound; the market is skilled at punishing various forms of defiance.
5. Keep a calm mindset, refuse greed:
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Using leverage is to utilize funds more efficiently, not to get 'rich overnight.'
Set reasonable profit targets; after reaching them, consider taking partial profits to secure your gains.
Losses are part of trading; accept them, stop-loss according to plan, and do not let them affect your next trade.
Someone asked me how to turn 3000 into 100 times?
Try to earn 10% every month, and do you think you can fantasize about making a million with compound interest?
That's just a fantasy. The reality is that you can only earn 100 times through each 10x, 5x, or 3x trade.
Compound interest is one of the eight wonders of the world…
You only need to get liquidated once to never listen to those toxic motivational speeches again!
Crossing social classes through cryptocurrency trading relies absolutely not on compound interest, but on cycles, liquidity, and price action.
Use cycles to trade contracts:
The larger the cycle you observe, the higher your chances of winning. Essentially, the crypto market is a global financial market where you are playing a trading game with people all over the world, and now you need to take money from their wallets.
How to take it?
Use slow money to make fast money, use smart money to earn the money of the foolish.
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Most people in this world are impatient, lack strategies, and are reckless. Most people rely on a 'brute force' approach to trade, rarely paying attention to their position size, timing of entry, and risk levels.
They only focus on how to make quick profits, thus entering and exiting quickly, risking large for large, leading to liquidation.
They trade with profits and losses of just a few points, but if you extend your positions for longer, aiming for 200 points in profit and stop-loss, your chances of winning increase significantly.
Your capital will consume such funds, and it's not about how smart or patient you are; in fact, you are leveraging a key factor - 'cycles.'
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When Bitcoin was priced at 3000 USD, it fluctuated daily by about dozens of points; at 10000 USD, it was 200 points; at 30000 USD, daily fluctuations were around 1000 points; currently, at 58000, it's about 2500 points.
And your liquidation price can only bear a fluctuation of... 300 points. I understand your ambition, but you can't take volatility lightly!
These insights should not be understood only after you get liquidated, but rather at this very moment!
If you manage your risk well, it doesn't matter if your contracts are 1000 times; you only need to care where your risk level is.
Let me give you an example: this bull market is a large cycle, within which there are countless small cycles, and within those small cycles, cycles are nested. These small cycles fluctuate back and forth but are always moving toward a peak.
You need to judge where the low point of a small cycle is at this moment, one that is unlikely to be broken, and then trade within this cycle without looking at resistance, support, or obstacle levels. In this small cycle, your trades will be the strongest.
After years of trading, I've found that those who can consistently profit are the 'fools.'
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Can you believe it? Those who survive the longest and earn the most in the crypto market are never the 'smart people' who stare at the charts all day but rather a group of 'stubborn' individuals who stick to simple methods.
In recent years, I've seen too many stories of liquidation: some people stare at the K-line chart for three days and nights without sleep, and in the end, they go all in and get liquidated; some follow so-called 'insider information' to chase highs and lows, ultimately wiping out their accounts. They don't lack skills but fall victim to three deadly habits.
Chasing highs and lows is the biggest pitfall. Seeing a cryptocurrency surge makes you greedy, fearing to miss out on a hundredfold opportunity, only to get trapped as soon as you enter; when prices plummet and panic ensues, you are scared into cutting losses, perfectly hitting the wrong rhythm. The true cycle bonus always belongs to those who engrave 'buy on dips, sell on rallies' into their bones.
Heavy bets are even more dangerous. Thinking that you can get rich overnight just because you are sure about the direction, putting all your capital into one cryptocurrency. But the major players can easily shake it, causing a slight fluctuation that leads to forced liquidation, leaving no chance for recovery.
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Operating with a full position is the easiest to lose control. As soon as the market fluctuates, emotions go out of control, and you want to invest everything you have. Even if you guess the big trend correctly, you can't adjust your position flexibly and watch better opportunities slip away.
In the end, it's not about who can predict the market better but about who can control themselves. I have summarized a set of 'anti-human nature operation guidelines,' which are simple yet effective, although few can stick to them:
During sideways periods, never act lightly. If high consolidation hasn't ended, don't rush to exit; if low consolidation hasn't bottomed, don't blindly catch the bottom. Waiting for change signals before acting is the best strategy.
Enduring during fluctuations is essential to win. Most people lose patience in sideways markets, and frequent trading leads to losses. Remember, the longer the sideways market lasts, the more aggressive the trend will be once it establishes.
Follow the daily market sentiment. Buy in batches when the daily close is bearish, and gradually sell when it's bullish; this is much more reliable than guessing.
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Understand the rhythm of the decline to find opportunities. Cryptocurrencies that decline slowly often have limited rebound potential; those that decline quickly might have urgent rebound opportunities, the key is to grasp the rhythm.
The pyramid building method must be used. Enter in batches, with smaller positions as you go higher, always leaving yourself some bullets to deal with unforeseen situations.
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Wait for signals after significant rises and falls. After sharp fluctuations, there will inevitably be consolidation; once consolidation ends, a change will occur. Do not go all in at high points or liquidate at low points; wait for clear signals to act.
The crypto market never lacks opportunities; what it lacks are those who can stabilize their mindset, endure until opportunities arise, and live long. If you achieve these, you'll find that trading is not that difficult.
What kind of game is trading in the crypto market?
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It's a game of life and death where money acts as soldiers.
If you win, the soldiers increase; if you fail, the soldiers decrease.
What you gain is what others lose; what you lose is what others gain.
Others will release various messages, creating emotions to let your soldiers plunder.
But later, you will find that there are many traps; as soon as you buy, it drops, and your soldiers are plundered away.
The opportunity you see is actually a trap set by others just waiting for you to step in.
Moreover, they often show you the myth of getting rich overnight, like turning 20,000 USD into 30 million USD.
Why do retail investors like to read these stories? Because they are poor, and being poor makes them anxious to get rich quickly.
So they become greedy, and greed leads to reckless trading, going all in, borrowing money and leveraging.
They think it’s trading failure, but in reality, they have been scammed.
If you really want to trade, just focus on BTC. It's tough for others to operate.
Others, including ETH, are not viable.
If you want to trade in other cryptocurrencies, then you'll need an information advantage.
Information advantages can be insider news, summaries and insights from experienced individuals, or your unique analysis.
In short, if you want to make money, you need to have an advantage, even if it’s just 1%. You can still gamble.
Otherwise, you will feel good, listen to others saying it's good, and then go buy.
You are deceived because of greed and ignorance.
The crypto market is full of fraud; making money is not that easy.
Rather than saying it is a new type of investment financial market, it might be more accurate to say it is a global on-chain casino.
There is no fairness here; the myth of getting rich is only occasionally told to you.
The goal is to attract traffic, to let you see and give you confidence; that is what others want you to see and feel.
If you do not have unique abilities, do not trade cryptocurrencies.
If you have the ability, you naturally know that the crypto market is just an amplifier of human nature.
Finally, I share a survival rule for contract trading: Don't rely on luck, rely on discipline.
The first trick: Don't bet on direction; treat trading as a probability game.
Beginner's fallacy: Guessing up and down based on one's feelings, like a gambler throwing dice.
Expert mindset:
Trend judgment: First, see whether the market is rising or falling, then decide whether to go long or short.
Leverage risk: A 10x leverage increase of 1% earns 10%, but a 1% drop leads directly to liquidation.
Three questions before placing an order:
What is the current trend?
Is there any sudden news?
Where to set the stop-loss point?
Best entry point: wait for 'breakthrough + pullback confirmation' before taking action. It’s better to earn less than to lose money!
The second trick: Make money with strategies, not by shooting from the hip.
Three guaranteed strategies suitable for beginners:
① Grid quantification - a cash machine in a volatile market.
Applicable scenario: BTC sideways (e.g., 60k-65k range).
Operation: Place an order every 500 USD, automatically buy low and sell high.
Returns: 3x leverage + small positions, with a profit of 15% per grid, earning 2%-5% daily.
② Funding rate arbitrage - free profits.
Method: Go long on spot + short on contracts, locking in funding rate differentials.
Case study: Funding rate 18%, spot annualized 2%, net gain 16% (100,000 USD earns 16,000 USD annually).
③ Hedges against major events - insurance before significant events.
Operation: Open equivalent long and short positions simultaneously, and stop loss on one side once the direction is clear, while scaling up on the other side.
Core principle: Do not predict up or down; just seize explosive market opportunities.
The third trick: The only secret to avoiding liquidation - risk control comes first!
99% of those who get liquidated do so because of a lack of discipline.
Position management:
Start with a 1% position, increase your position only when you are in profit, and never exceed 3% for a single trade.
Immediately reduce position after a loss; if you lose three times in a row, go to cash.
Stop-loss ironclad rule:
Always set a stop-loss (2%-3%) when placing an order, and do not fantasize about miracles.
After making over 5% profit, move the stop-loss to the break-even point to ensure no loss.
Emotional control:
Three consecutive losses? Mandatory 24-hour break!
Record the emotions and reasons for each transaction, turning subjectivity into objectivity.
Capital safety:
Strictly separate your trading account from your living expenses, keeping at least a year’s worth of emergency funds.
Never use your meal money to trade contracts!
Final advice
Contracts are about discipline, not luck.
The more you want to make quick money, the faster you die; the more you follow the rules, the longer you live.
