I was born in 1988, a full-time cryptocurrency trader, with assets in the tens of millions. I withdraw 200,000 yuan from the currency world every month, feeling no impact, living leisurely and freely, without deceit or scheming, living the life I want. My daily routine now is to wake up at 6:30 for a run, without fail. In the morning, I generally review yesterday’s trades along with updates from the evening’s news, in conjunction with my positions and specific situations to make waves or small operations for short-term trades, enhancing my market sense. Then, I spend two hours summarizing my reviews; this is the most important task in the morning, aiming to make good profits in the evening! After that, I write an investment-related article to post on Zhihu, which also records my cryptocurrency trading life, providing a place for reminiscence when I grow old. I also love to write about investment experiences and insights, helping both myself and others. From initially losing 85% to supporting my family through cryptocurrency trading, I have tried almost every method. If I were to say what truly helped me out of confusion, it would be the ten-character maxim I summarized, which actually applies to most people. Reading it can help you avoid many detours, especially the tenth character!!!
One important word in the currency world: Endure.
Two important words in the currency world: Avoid greed.
Three important words in the currency world: Maintain discipline.
Four important words in the currency world: Rational layout.
Five important words in the currency world: Follow the main force.
Six important words in the currency world: Focus on value.
Seven important words in the currency world: Do what you understand.
Eight important words in the currency world: The market is the best teacher.
Nine important words in the currency circle: Rationality, moderation in entry and exit, and strategy.
Ten important words in the currency circle: Good mindset, no hesitation, endless learning.
I summarized how to avoid risks in the currency world after fully realizing the risks and experiencing the consequences.
Only after experiencing the consequences can we truly understand how to avoid risks. My personal experience is as follows:
1. Do not go all-in.
Since investment has very high uncertainty and considerable risk, you should never go all-in! Every time you go all-in, there will inevitably be a time you regret it. I am the best example; not long after I entered the cryptocurrency world, I went all-in on BTC and BNB, quickly bringing my account balance close to 10 million. However, later, going all-in on metaverse projects and contracts nearly led to my downfall twice. The principle of not going all-in is actually basic common sense in the investment field, which many investment tycoons and books will tell you at the outset. Yet I genuinely made this fundamental mistake; in fact, new investors generally wouldn’t start by going all-in. I initially only invested 100,000, but the problem lies in small-scale investments; if they quickly yield high returns, the greedy demon will be unconsciously unleashed, ultimately consuming reason and leading to all-in action.
2, Be cautious when increasing leverage.
Unlike gambling everything, leverage should be used when appropriate. When faced with relatively certain opportunities, especially during significant upward trends, decisively increase leverage; one move can elevate you several levels. Those who started borrowing to speculate on real estate twenty years ago belong to this category. However, using leverage is a high-risk operation within high risk. More seriously, when many people begin to use leverage in a certain investment field, it must be when that field is experiencing long-term high growth. You will see people around you making money with leverage, even making huge profits, while those who do not use leverage seem out of place, holding cash or being qualified but not borrowing is the biggest fool! For decades, wasn’t that the case in China's real estate investment field?
This situation leads to many blindly following investors, who, like me six years ago, lack basic knowledge about investments. When you tell them about the risks of leverage, they will impatiently say that house prices will absolutely not drop. If you ask why, they will say China will not allow real estate to drop. Regardless of whether China’s real estate will drop or not, the complete lack of awareness of leverage risks, from an investment perspective, has already pushed them to the edge of a cliff. As for when and where they will fall, it may just be a matter of time! So how to cautiously use leverage? I think the three most important points are:
1) Increase leverage in your most familiar field.
First, only when you are most familiar can you have a better success rate. Therefore, adding leverage is a significant test of mindset for most people. If you do not understand enough, your mindset will be harder to stabilize, easily leading to mysterious operations, compounding mistakes, and stubbornness.
2) Before increasing leverage, you must ask yourself repeatedly: Can you bear it if the worst-case scenario happens?
Leverage should only be added when the answer is certain! Here, you must be absolutely rational and extremely conservative; never deceive yourself. Do not blindly follow others, and especially do not have a gambling mentality! For most people, a reliable approach might be to use small positions with leverage to seek larger gains!
3) Once you sense the smell of risk, you must immediately reduce leverage or stop loss, even if it’s just a slight hint! Losing money with leverage is much more stimulating than making money with it. Those who have experienced this will remember it for life! Lastly, I want to emphasize that I am not encouraging everyone to use leverage; I am just stressing the risks of leverage and the issues that need to be considered. Whether to use leverage depends on the individual. As I mentioned earlier, leverage is a high-risk operation within high risk, suitable for aggressive players with strong risk tolerance. If you are not that type of player, I suggest you don’t play.
Ten years in the cryptocurrency world, getting to this point relies on having discipline during big drops and strictly enforcing it. Today, I share the 'six major manuals' for winning in cryptocurrency trading that I have repeatedly summarized and practiced over the years. If you decide to trade cryptocurrencies for a lifetime, these six major manuals are worth collecting and memorizing.
Point one: Understand when to stop losses and take profits.
We buy and sell currencies to trade, to speculate, not to hold forever! When you are making money, you think about making more, but when you are losing, you are reluctant to sell. This mindset is definitely not advisable. When your position goes wrong, you need to sell decisively.
Point two: Do not always think about buying at the lowest point and selling at the highest.
Because the market will only have lower points and higher points. Ordinary people cannot achieve this mechanism, so don’t pursue so-called highs and lows. What we really need to do is to buy and sell in the bottom and top areas.
Point three: Volume and price must match perfectly.
For those positions that rise without volume or set new highs without volume, we must remain vigilant. It may likely signal that the main force is unable to offload, indicating exhaustion. Never chase; it’s better to miss an opportunity than to make a mistake.
Point four: Reactions must be quick.
When new information appears, we need to immediately identify which sectors and companies are favorable. If you can’t keep up with the first tier, we need to act promptly, as the second tier will also have considerable gains.
Point five: Learn to rest.
As the saying goes, it takes three months to see the bottom and three days to see the top. This means that the main upward wave of the known currency price cycle only lasts for a very short time. Therefore, we must learn to seize this main wave, while the rest of the time is usually for resting.
Point six: The biggest good news in the market is a crash.
Often, after a decline, there will be many larger opportunities. When others are greedy, you must learn to be fearful; when others are fearful, we must be greedy. So when the market crashes, don’t be afraid; at this time, we should choose quality positions and build them in a timely manner. These six points may sound simple, but very few can truly achieve them. Why? If you cannot overcome human weaknesses, you will never earn your first ten million in your life!
If choosing to speculate on cryptocurrencies, whether there will be any prospects is hard to say. Just like some people who have experienced ups and downs in the currency world, losing their entire fortune and then winning it back. Trading cryptocurrencies does not depend on looks, education, or profession, but it tests mindset and ability. To succeed in the currency world, you need solid knowledge, such as mastering the inner logic of technical indicators, overcoming greed and fear, and establishing a trading system that suits you. You should properly manage your funds, choose trends, timing, and opportunities, set stop-loss and take-profit standards, and strictly adhere to trading discipline. Trading cryptocurrencies is like navigating a martial world; without solid skills, failure is certain. Some people gain wealth and growth in the currency world, while others get cut down. In summary, spending a lifetime trading cryptocurrencies, being able to earn steadily is successful; otherwise, you must reflect carefully. Here are the iron rules of the currency world that you must know:
1. Asset allocation, diversify risks.
The essence of asset allocation is also to spread risk. You must never go all-in on a specific cryptocurrency like the popular all-in emojis in various crypto groups. Another extreme is over-diversification. This is a common mistake many small investors make; buying dozens of coins, rushing to buy high-potential coins recommended by big names, leads to an evenly spread portfolio where even a few significant gains don’t yield much profit. Seeing a few coins rise sharply, they start to panic, resulting in a series of hasty operations, and when the average gain is calculated, they find they haven’t beaten Bitcoin. The ideal number of coins to hold should be around 3 to 5.
2. Think repeatedly before buying, do not be swayed by emotions.
What to think about:
Is this trade a short-term, medium-term, or long-term position?
What to do if it drops after buying?
Should I continue to average down, cut losses, or hold my position?
What to do if it drops significantly?
If it rises, when should I sell?
If you do not think these questions through, you are likely to encounter the following situations.
1. After a significant drop, if you haven’t thought clearly about the stop-loss point in advance, and today it drops 20%, you hesitate to stop-loss, thinking it will rebound a bit tomorrow before selling, yet tomorrow it drops 30% again, leading to regret for not selling yesterday. Thus, you keep getting caught until you incur massive losses, and you finally choose to cut losses. Therefore, when buying, you must think carefully about the stop-loss point. As soon as the price hits it, sell immediately; stopping losses means admitting mistakes to avoid larger losses, and gambling-style averaging down is prohibited!
2. After buying, if it gradually declines or stays flat for a long time, and then suddenly rises by dozens of points, sell immediately, only to see it skyrocket for several days thereafter. The correct operation is: Before buying, consider whether this trade is for the long term or the short term. If it’s long term, lean more towards value investing. Analyze the future market size of the project you are investing in, then combine it with the fundamentals to assess what market share your investment can capture, thus estimating its valuation in 2-3 years. Compare this valuation to the current price to determine whether it is a good time to buy and how much growth potential is left, which refers to the investment return rate. If you can see this clearly, you can buy more during dips because you are not afraid of these declines; you are focused on future value. Don’t act until it reaches your mental estimation point, and refuse to sell during small gains! If it’s a short term investment, clarify the buying logic for that currency: Is it based on good news, favorable narratives, or technical analysis from K-line patterns? Buy slowly, and even slower; don’t think about buying now because the price might go up later. If you have this mindset, you will be swayed by emotions! Never chase prices impulsively. Before buying, think thoroughly and prepare for all possible scenarios to be worry-free.
3. Cherish life, stay away from contracts.
The first element of investment is risk avoidance, while playing contracts and using leverage is an act of increasing risk, which I resolutely avoid. Perhaps sometimes luck is on your side, allowing you to gain excess returns due to leverage. But if it triggers your greed and disrupts your mindset, that money will eventually be returned to the market. Most of the friends I have known who played contracts over the years have lost everything. In summary, they earned little and lost a lot. Don’t think your operations are better than others; it’s not easy for even one out of 100 leveraged users to survive for two years. In the bull market of 2021, shorting 519 made a name overnight, earning 30 million in one night. However, two years later, not only did they lose everything earned, but they also accumulated a mountain of debt! When playing contracts, you might win ten times, but one failure can bring you back to square one. Contracts are just a process of making money; going to zero is the end!
4. Invest with idle funds, do not borrow.
Whether in the currency world or stock market, any investment must be made with idle money; you cannot use money that must be used at home. It must be idle cash. The currency world is a high-risk market; once you lose money that you need urgently, the consequences are often very difficult to accept and can cause significant harm to your family. You must not borrow money to invest; once you borrow, your risk is 100% because borrowing has costs. If the market remains sluggish while you are in a loss position and need to repay, you can only cut your losses at a low price and be eliminated by the market! The currency world will always be a long bear market with a short bull market; those who borrow will find no place to rest in the currency world!
5. Either don’t buy, or buy enough.
Many people will ambush at low points, but once they see a rise, they feel they didn’t buy enough, adding to their positions as the price rises, significantly raising their average holding price. Then, one day the market turns, and they get caught. This is the most taboo! Simply put, it’s still greed. So remember, for the coins you believe in, either don’t buy, or buy enough!
6. Lean towards value investing.
For some cryptocurrencies you find very valuable, and you recognize their excellent teams, great visions, attractive promotions, and strong R&D capabilities, then stick to them. These valuable cryptocurrencies should be included in your medium to long-term investment portfolio, allowing them to slowly mature into fine wine. Even if the price drops, do not consider panic selling; hold firmly. Let time accompany you to slowly grow rich.
7. Maintain a calm mindset.
In fact, the most important thing in trading cryptocurrencies is mindset. Many people clearly know it’s not a good buying point yet can’t resist the urge to buy; this is a mindset issue. They feel uneasy if they don’t buy for a few days, constantly mingling in various WeChat groups and comment sections of big names, hoping to find the secret to getting rich. Little do they know, the more they watch, the more they lose; the more active they are, the less money they have. Hahaha... You must control your hands, spend the most time researching, and the least time operating! Also, absolutely do not chase high prices; maintain this mindset: let it rise as much as it wants, as if that coin doesn’t exist. Only ambush value coins at low positions and wait patiently for them to bloom. Making money is not as difficult as you think. Of course, trading discipline is myriad; the core gene for making money is what can be deeply ingrained. Many things, even if counted for you, if you don’t make a mistake, you still won’t remember. Often at this time, you need guidance from others or a mentor. Trading cryptocurrencies isn’t that hard, but many people always fall into misconceptions. When I first started trading cryptocurrencies, I spent a lot of time and energy researching various techniques, only to find they were useless. The so-called 'cryptocurrency trading secrets' are mere empty talk; what’s truly important is mindset and discipline. Many people are greedy; when they see good market conditions, they desperately increase their positions, only to be carried away by market emotions. For example, my friend, with small funds, desperately chased the rise and fall, ultimately losing everything. Learn to stay in cash, especially when the market is bad; not losing is a victory. Remember, do not blindly pursue short-term profits; patiently waiting for real opportunities is the best strategy. I once made the mistake of frequent operations; later, I realized that stabilizing my mindset is the most crucial secret. Trading cryptocurrencies is connected to life; when you understand life, you also understand the currency world. The path to success is simple, and only through unity of knowledge and action can you navigate smoothly and remain undefeated! Keep following me; I believe you will avoid many detours! I am Qing Tian, sharing only the most practical insights. If you like it, feel free to follow Xiao Xun, listen to a variety of opinions to gain clarity, and focus on the core technology of the currency world! Follow me for the most authentic answers!
