1. Personality influences destiny.
First of all, contracts are a speculative market that allows for leveraged long and short trading. A person's personality determines whether they can play longer in the contract market. Trading contracts is a process of accumulating small amounts into larger ones, gaining experience and wealth. Therefore, those with impulsive and overly gambling personalities are fundamentally unsuitable for this market. Thus, the first pitfall is designed for those with impatient personalities who are prone to impulsive decisions.
So how do we prevent the first pitfall? To be honest, a person's personality is hard to change. Even if you learn some candlestick knowledge or position management, the impulse to take risks is difficult to suppress. You need to find a friend who has a better personality, more patience, and self-discipline to help you stay on track.
2. Do not open orders to trade when in poor physical and mental condition.
Speaking of personality, let's touch on physical and mental states. I have experienced several nights of staying up late with poor sleep, while managing fans and clients during the day, busy with real-life matters, and by night I was already very tired. When physically exhausted and not in a good state, my mind was also not very clear, and I made trades in a daze. Later, I realized I had made mistakes! This is an example of being in poor physical condition. I also mentioned mental state when chatting with fans and friends, for instance, feeling down after losing money on something and wanting to earn back quickly, or just made a profit and feeling happy, casually making a trade to test luck. None of these reflect the mental state one should have when trading contracts. In such cases, trading becomes akin to gambling, with a 50% chance of winning.
3. Addiction
I'll put the pitfalls related to operations at the back; the first three are all derived from personal issues. Later, I'll address operational and technical knowledge aspects. This addiction is a common characteristic raised by many netizens. The Bitcoin market operates 24 hours a day and has many legendary stories, like playing contracts with 500 yuan and later earning 1 million—these are low-probability events. When magnified, this attracts numerous participants hoping to seek large profits from the contract market. Moreover, newcomers often have a bold attitude, not considering many factors, and it's easy to make money at first. Once they taste the sweetness of making money, they become addicted, often thinking they can easily recover losses later. They keep adding to positions and making trades. Even seasoned traders can't avoid the urge to trade daily. Once you become addicted to trading contracts, it often leads to pitfalls. Experienced traders who stare at the market too much can easily misjudge trends; daily short-term fluctuations can affect their grasp of the larger trend, resulting in small profits but large losses, or missing out on significant market movements. Therefore, this addiction pit must be self-regulated by both novices and veterans.
4. All-in without setting stop-losses, fond of adding to positions, chasing highs and cutting losses.
I categorize these several points together, as they are common mistakes made by newcomers in the speculative market, whether in contracts or spot trading. When seeing a rapid increase in price, they immediately think of jumping in to buy, and when seeing a sharp decrease, they fear selling slowly. They want to buy back at lower prices to increase their cryptocurrency holdings. The same applies to contracts; as soon as they see a rapid increase, they think of quickly entering to capture some bullish profit, and when they see a rapid drop, they immediately think of shorting. Sometimes, chasing high prices can indeed yield profits, and one might profit from a quick sale, but often due to greed, if they don't sell in time, they may find themselves at the top when a wave of selling occurs. Alternatively, they may short at a support level only to encounter a sharp rebound. Some people do not set stop-losses, thinking that their capital is sufficient, and keep adding to positions. However, in a one-sided market, like the recent Ethereum surge far exceeding last year's prices, many ended up unable to maintain their positions and were forced to cut losses or hold until liquidation.
5. Position Management
Here, I want to emphasize position management because good position management, combined with leverage, can make trading contracts much more manageable. I also want to discuss the concept of accumulating small amounts into larger ones and controlling one's greed. Only by adhering to these two principles can you get accustomed to using small leverage. Then, position control becomes easier. The input for each trade can be adjusted downwards; when your margin occupies only a small portion of your capital, you can maintain a more relaxed mindset towards upcoming market fluctuations.
Use long-term funds to treat daily trading, and you will have the confidence to handle minor issues. Only when you are calm inside can you respond calmly. For example, if the price of Bitcoin reaches 12,000, you can open a large trade with a 2x or 3x low-leverage short position while looking at the bullish scenario. When the price rises to 13,000, short again, then 14,000 again, allowing your liquidation price to adjust above 20,000. Treat this as a long-term hold. Then, regularly operate on the exchange you frequently use for short-term positions, or take profit at intraday resistance levels and reverse to short, etc.
This is when you can control your funds, position, and leverage, and also set up a hedge for yourself. Suppose currently at 12,000 it stops rising and starts to fall; your 3x short position will keep making profits. If it rises again this year, although that position incurs losses, you can regularly add to your short position according to your plan, raising the average price of your short position, and when Bitcoin reaches its peak, it will naturally decline. Your short position will naturally yield profits by the end of the year. This requires your position to occupy only a small part of your total funds, with large funds serving as margin.
Here's a case: A netizen opened a short position, and the liquidation price was set at 120 points, but it was liquidated at 50 points. They asked me what happened, and I said first you need to understand the rules of the exchange; they use a specific position method, which is isolated margin, and you did not choose to auto-add margin. Your funds were in the spot account, and the contract account had insufficient funds. The system indicated a liquidation price of 120 points, but the margin you occupied in the contract account was not enough to maintain the 120 points liquidation. Therefore, when the funds in your contract account could only sustain up to 55 points, the system automatically liquidated your position. This was purely due to improper operation, without prior learning of the exchange's trading rules. Plus, you directly used 50% of your contract account to gamble. This is simply unreasonable. Additionally, without a substantial fund backing, you were forced to liquidate before even reaching the normal liquidation price of 120 points.
6. Pay attention to news and have good insight, as well as the ability to handle news.
In the past, whether you traded stocks or invested in foreign exchange or gold, it was necessary to pay attention to various news in the capital market, including policy news. When trading contracts, you also need to pay attention to information within the cryptocurrency circle. This tests a person's ability to handle various types of news, assessing your observation and analysis skills. The same news can prompt two different viewpoints, making a person's insight particularly important. If you are not good at analyzing and processing various news sources, listen to others' opinions to integrate them. Often, subsequent market trends are judged based on news.
7. Lack of Concept of Time and Space
When trading cryptocurrencies, especially contracts, it is necessary to have a concept of time and space regarding market trends. For instance, in the past, many exchanges did not offer perpetual contracts and settled every Friday. Therefore, every Friday afternoon during settlement, it's easy to see a reversal, as the price might drop sharply just before the expiration date, wiping out previous profits. Now that perpetual contracts are common, the significance of Fridays has lessened, making Saturdays and Sundays even more crucial. Since the US stock market and gold are closed on weekends, Bitcoin loses its correlation with the international financial market, potentially leading to its own independent trend, suddenly spiking and then crashing, before rebounding to previous levels, with Monday following international market trends. It might also suddenly crash before rebounding. Additionally, during the day, at every multiple of four—like 4 AM, 12 PM, 4 PM, 8 PM, and 12 AM—small fluctuations often occur due to many traders paying attention to the 4-hour chart's changes. Each time a new candlestick forms on the 4-hour chart, there is often a small fluctuation. Some people even wait until 8 AM the next day for the daily chart to update, while the 12-hour chart updates at 8 PM, marking important rhythm points.
Let's also discuss spatial issues. For example, when you determine that the main force may lift the market over the weekend, consider where it might rise to. If it needs to drop to a certain position by Monday, based on wave theory or other theories, you should estimate the trend. For instance, if you have two days left to rise on Saturday, estimate the pressure level it can reach. If by Sunday, only one day is left, you can only lift it to a certain level. Considering time and the maximum space it can reach above, if it rises too much and then crashes, can it hit the expected position? What support exists below if it drops on Saturday? If the price rises for two days on Sunday, how high will it go before a potential crash? These concepts of space and time are essential for a trader to possess. Especially when there are no significant fluctuations during the day, and if you don't close positions before sleeping, you may find yourself liquidated the next day. Often, major fluctuations occur late at night, which is a piece of advice from seasoned traders. Observing time and space can reveal certain patterns.
8. Choose an exchange with high traffic.
An honest exchange with long-term operational capacity can withstand regulatory pressures. This means that once policies restrict speculation and contract trading, whether these smaller exchanges can endure the risks. Whether they can maintain normal operations overseas or simply run away is crucial. When trading contracts, ensuring the safety of your capital should be the top priority. Therefore, look at the operating team behind an exchange to see if they are genuinely working hard to run a business, and whether their service team, including customer service, has a very positive attitude, etc.
9. Learning techniques that are too mixed and not proficient, indicators are chaotic and unclear. Lack of confidence.
I’ll categorize these under technical aspects and summarize them. When you read too many technical articles, you might not know which indicators to focus on, and whether the skills you’ve learned are accurate, as too many moving averages and indicators can lead to confusion. Once you have your trading plan, strictly follow it to avoid confusion. When facing a wrong trade, respond in an orderly manner. Execute profit-taking and stop-loss plans according to your strategy; if you make a mistake, correct it promptly. Stay calm.
10. Poor memory, failure to summarize lessons.
Remember these nine points. If you have previously fallen into pitfalls and failed to learn from your mistakes, you will continue to make errors. People often say that one learns from mistakes. So why do we keep making the same mistakes in the same areas? You should learn to summarize, make daily notes of your mistakes, and track your growth process. Look back at your past to see your progress, correct your mistakes, and learn from others' more scientific methods. Engage with fellow netizens, as many visitors are true experts. Be humble and eager to learn. Very few people are genuinely willing to teach you how to become wealthy, so when you meet a good teacher or friend, make sure to learn from them earnestly. You may not get another chance to meet such genuine people; this world is full of deceit. Encountering a real person is actually quite rare.#ETH走势分析 #国产概念币集体爆发 $BTC$ETH
