I was born in 1987, a full-time cryptocurrency trader, with assets in the tens of millions. I withdraw 200,000 yuan from the cryptocurrency world each month, feeling no impact. My life is leisurely and free, with no deceit or intrigue, living the life I want. Now my daily routine is.
Get up at 6:30 and go for a run, come rain or shine. Mornings are generally spent reviewing yesterday’s replications and updating evening news, combined with my positions and specific situations for swing trading or operating short-term with small funds to enhance market sense.
Then, spend 2 hours on review and summary; this is the most critical task in the morning, aimed at being able to earn well in the evening! Then write an investment article and post it on Zhihu, as a record of my trading life, so that when I grow old, I have a place to look back on. When I have time, I also love to write an article about investment experiences and insights to benefit others as well as myself.
From an initial loss of 85% to trading cryptocurrencies to support my family, I have tried almost every method. If you want to say what truly helped me out of confusion, it would be the ten maxims I summarized myself, which actually apply to most people and can save you several years of detours, especially the tenth word!!!
One important word in the cryptocurrency world: Endurance
Two important words in the cryptocurrency world: Resist greed
Three important words in the cryptocurrency world: Maintain discipline.
Four important words in the cryptocurrency world: Rational layout
Five important words in the cryptocurrency world: Follow the main force
Six important words in the cryptocurrency world: Centered around value
Seven important words in the cryptocurrency world: Do what you understand.
Eight important words in the cryptocurrency world: The market is the best teacher.
Nine important words in the cryptocurrency world: Rationality, moderation in entry and exit, and strategy.
Ten important words in the cryptocurrency world: Good mindset, no hesitation, learning without limits.
I summarized how to avoid risks in the cryptocurrency world while fully recognizing risks and experiencing the lessons brought by risks.
Only after suffering the consequences can one truly pay attention to how to avoid risks. My main experiences are as follows:
1. Do not go all in
Since investment carries a very high degree of uncertainty and a significant risk, one should not go all in! Going all in once will eventually lead to a loss; 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, going all in on metaverse projects* and contracts* nearly wiped me out twice. The principle of not going all in is actually basic knowledge in the investment field, something many investment moguls and books will tell you from the start. Yet I still made this fundamental mistake; in fact, new investors usually won’t go all in right away. When I first started, I only invested 100,000. The problem is that if small investments quickly yield high returns, the greed within will be unconsciously unleashed until it ultimately consumes reason, leading one down the path of going all in.
2. Be cautious with high leverage*
Unlike going all in, leverage should still be used when appropriate, especially in the face of relatively certain opportunities, particularly during significant upward trends. Decisively leveraging can lead to several steps up. Those who started borrowing to invest in real estate over a decade ago belong to this category. However, leveraging is a high-risk operation among high-risk operations. More seriously, when people generally begin to leverage in a specific investment area, it usually indicates that this area has been growing rapidly for a long time. Everyone sees those around them making money through leverage, or even making a fortune, while those who don't leverage seem out of place. Holding cash or having qualifications but not borrowing is the biggest foolishness! In the past few decades, wasn’t the real estate investment sector in China like this?
This situation will bring many blind-following investors who, like me six years ago, lack basic understanding of investments. When you tell them about the risks of leverage, they impatiently reply that housing prices will never drop. If you ask why, it's just one sentence: China won't let real estate fall. Regardless of whether Chinese real estate will drop or not, the sheer ignorance of leverage risk means they have already pushed themselves to the edge of a cliff; as for when and where they will fall, it may just be a matter of time! So how do you leverage cautiously? I think the most important points are three:
1) Leverage in fields you are most familiar with.
First, being familiar leads to a better success rate. Then, leveraging is a significant test of mindset for the vast majority. If you don't understand enough, it's even harder to stabilize your mindset, making you prone to bizarre operations, compounding mistakes, and ultimately regretting it.
2) Before leveraging, you must repeatedly ask yourself whether you can bear it when the worst situation occurs.
Only when the answer is certain can you leverage! Here, you must be absolutely rational, extremely conservative, and never deceive yourself. Do not blindly follow others, nor have a gambling mentality! For most people, a reliable practice might be to use small positions with leverage to seek big returns!
3) Once you catch a whiff of risk, 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. Trust me, experiences that leave a mark are unforgettable! Lastly, I want to emphasize that I do not encourage everyone to leverage; I just stress the risks of leveraging and the issues to pay attention to when playing with leverage. Whether to leverage really depends on the person. As I said earlier, leveraging belongs to a high-risk operation among high-risk operations, more suitable for aggressive players with strong risk tolerance. If you are not that kind of player, I suggest you don't play.
In the cryptocurrency world for 10 years, the key to Dong Ge's survival until now is having my own discipline and strictly following it during market downturns. Today, I share the 'Six Great Secrets' of cryptocurrency trading that I have repeatedly summed up and practiced over the years. If you decide to trade cryptocurrencies for a lifetime, I recommend keeping these six secrets in mind.
First point: You must understand stop-loss and take-profit.
We trade cryptocurrencies to engage in transactions, to speculate, not to hold forever! When you make money, you think about earning more, and when you incur losses, you are unwilling to sell; this mindset is certainly unacceptable. When the position trends incorrectly, you need to sell decisively.
Second point: Don't always think about buying low and selling high.
Because the market will only have lower and higher points. Ordinary people cannot achieve this mechanism, so don't chase the so-called highs and lows. What we really need to do is buy low and sell high.
Third point: Quantity and price must perfectly match.
For those positions with no volume during the rise or those reaching new highs with no volume, we must be vigilant. It could very likely be a signal that the main force can't sell off, leading to exhaustion. Never chase, it's better to miss out than to make a mistake.
Fourth point: Reaction must be quick.
When a piece of information appears, we must quickly find which favorable sectors and companies it affects. If you can't keep up with the first echelon, then we must timely act; the second echelon will also yield considerable gains.
Fifth point: Learn to rest.
As the saying goes, three months to see the bottom, three days to see the top. This means that there is only a short time for the main wave of the known cryptocurrency price rise cycle. Therefore, we must learn to seize this main wave; the rest of the time is usually for resting.
Sixth point: The greatest boon in the market is a sharp drop.
After a drop, greater opportunities often arise. When others are greedy, you must learn to fear; when others are fearful, we should be greedy. Therefore, when the market experiences a sharp drop, do not be afraid. At that time, we should choose quality positions and build them in a timely manner. These six points sound simple, but very few can actually achieve them. Why? If you cannot overcome human weaknesses, you will never earn your first ten million in your life!
If you choose to trade cryptocurrencies, whether there will be success is hard to say. Just like some people have experienced ups and downs in the cryptocurrency world, losing their fortune and regaining it. Trading cryptocurrencies does not depend on looks, education, or profession, but it tests your mindset and ability. To succeed in the cryptocurrency world, you must have solid knowledge, such as mastering the internal logic of technical indicators, overcoming greed and fear, and establishing a trading system that suits yourself. Do well in trading, timing, and choosing opportunities. Set standards for profit and loss, and strictly adhere to trading discipline. Trading cryptocurrencies is like venturing into the world; without solid skills, you will undoubtedly fail. Some people have gained wealth and growth in the cryptocurrency world, while others have been cut down. In short, trading cryptocurrencies for a lifetime, being able to maintain stable profits is a sign of success; otherwise, you must consider carefully. You must know the iron laws of the cryptocurrency world:
1. Asset allocation, diversify risk.
Asset allocation is essentially to spread risk. You must not put all your bullets on a particular coin like the popular all-in expressions in various cryptocurrency groups. Another extreme is over-diversification. This is a common mistake for many small investors who buy dozens of coins, rushing in for coins recommended by influencers, spreading the risk too thin leads to tiny positions. Even if there are a few that rise significantly, they won't earn much. Seeing some coins rising sharply leads to anxiety, resulting in a flurry of operations, and when you check the average increase, you find it hasn't outperformed Bitcoin. The ideal number of coins to hold should be around 3 to 5.
2. Repeatedly think before buying, do not be influenced by emotions.
What to think about:
Is this a short-term, medium-term, or long-term trade, or a swing trade?
What should I do if it drops after buying?
Should I continue to average down, cut losses, or hold my coins?
What should you do if it drops significantly?
If it rises, when should I sell?
If you don’t think through these questions clearly, you are likely to encounter the following situations.
1. It has dropped a lot, without thinking through the stop-loss point beforehand. Today it dropped 20%, and I was reluctant to stop-loss, thinking it would rise a bit tomorrow to sell. However, tomorrow it dropped another 30%, and I regretted not selling yesterday. This continues until I suffer substantial losses and then choose to cut my losses. Therefore, when buying, it's essential to think about the stop-loss point thoroughly. As soon as the price hits it, sell immediately. Stop-loss means admitting a mistake, avoiding larger losses, and prohibiting gambling-style averaging down!
2. If it starts to drop after buying or has been flat for a long time, and one day suddenly rises by dozens of points, sell it immediately. Then, after several days of skyrocketing, you could be left hitting your thigh. Correct operation: Before buying, consider clearly whether this trade is for the long-term or short-term. If it's long-term, then lean towards value investing+. Analyze how large the market is for the project you are investing in and then combine the fundamentals to judge what share of the market your investment can occupy. This can help you estimate the valuation that may appear in 2-3 years and, according to this valuation, assess whether the current price is suitable for building positions and how much growth potential there is, which is the investment return rate. If you can see this clearly, you can add positions when it drops because you are not afraid of these declines; what you focus on is future value. Only when it reaches the psychologically estimated point do you act, refusing to sell at small gains! If it's short-term, you need to think clearly about the logic behind buying that coin—whether it’s favorable news, a main narrative, or a technical buy point from the K-line. Take your time when buying; don't think that if you wait, the price will go up. When you have this mindset, you are being controlled by emotions! Don't get caught up in a hot chase of rising prices; before buying, you must think carefully and prepare responses for all possible situations to be worry-free.
3. Cherish life, stay away from contracts
The first factor of investment is risk avoidance, while playing contracts with leverage is an act of increasing risk, which I firmly avoid. Sometimes luck may favor you, allowing you to gain extra returns due to leverage. But if it stirs your greed and damages your mentality, that money will eventually be returned to the market. Most of my friends who have played contracts over the years have lost everything. In summary, earning little and losing more. Do not think your operations are better than others; for 100 leveraged users, surviving two years is not easy at all. In the bull market of 2021, shorting at 519 made a name, earning 30 million overnight, but two years later, not only did I lose everything I earned, but I also built up debts! Playing contracts, you can win 10 times, but one failure can bring you back to square one. Contracts, earning money is just a process; going to zero is the end!
4. Invest spare money, do not borrow.
Whether in the cryptocurrency world or the stock market, we must always invest spare money. You cannot use money that you must have at home; it must be spare money. The cryptocurrency market is extremely risky. If the money you urgently need incurs losses, the result is often hard 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 comes with costs. If the market continues to stagnate while you are incurring losses and still have to repay, you can only sell at a loss! Eliminated by the market! The cryptocurrency world is always characterized by long bear markets and short bull markets; those who borrow will find no place to be buried in the cryptocurrency world!
5. Either don't buy or buy enough
Many people, although they will ambush at low prices, when they see a rise, they will feel they bought too little. They keep adding positions as the price rises, forcibly raising their average holding cost several times. Then one day when the market turns, they get trapped. This is the most taboo! In short, it's still greed, so next time when you find a coin you believe in, remember to either not buy or buy enough!
6. Focus on value investing
For some coins that you find very valuable and acknowledge their excellent team, great vision, beautiful promotion, and strong R&D capabilities, then persist. These valuable coins 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 on firmly. Let time accompany you to grow rich.
7. Maintain a calm mindset
Actually, the mindset is the most important in trading cryptocurrencies. Many people clearly know it's not a buying point, yet they can't resist the urge, which is a mindset issue. It feels uncomfortable not buying cryptocurrency for a few days, mingling in various WeChat groups and prominent commentators' comment sections, hoping to find the secret to getting rich. Unbeknownst to them, the more they look, the more they lose, and the more they trade, the less money they have, haha... You must control your hands, spend the most time researching, and the least time executing! Also, do not chase high prices to buy cryptocurrencies; have this mindset: it can rise as much as it wants, treat this coin as if it doesn't exist. Only ambush value coins at low prices, waiting for the bloom. Making money is not as difficult as you think. Of course, trading discipline is paramount; the core genes for making money are those ingrained in your bones. Many things, even if you count them, you won't remember if you don't make a mistake. Often, at such times, you need others or mentors to guide you. Trading cryptocurrencies isn't that difficult, but many people always let themselves fall into misunderstandings. When I first started trading cryptocurrencies, like everyone else, I spent a lot of time and energy studying various techniques, only to find they were not useful. The so-called 'cryptocurrency trading secrets' are just empty talk. What's truly important is mindset and discipline. Many people are greedy; seeing good market conditions, they frantically add positions, resulting in being driven by market emotions. For example, my friend, with a small amount of capital, desperately chased the rise and fall, ultimately losing everything. Learn to stay out of the market, especially when the market is bad; not losing is a victory. Remember, do not blindly pursue short-term profits; patiently waiting for the real opportunity is the best strategy. I once made the mistake of frequent trading; later, I learned that stabilizing my mindset is the most important key.
Trading cryptocurrencies is related to life. When you understand life, you also understand the cryptocurrency world. Simplicity is the ultimate sophistication. Knowing and acting in unison can keep you agile and in an invincible position! Keep watching me; I believe you will avoid many detours! I am Dong Ge, sharing only the most practical insights and information. If you like it, feel free to follow Dong Ge, focusing on core cryptocurrency technology! When you follow me, I will give you the most genuine answers#Strategy增持比特币
