Last Saturday, I was munching on takeout while binge-watching a drama, when the door was banged loudly. As soon as I opened the door, my brother who boasted six months ago about 'earning while lying down', looked paler than the green light of his phone screen: 'Bro, 80,000 is down to 12,000... how come buying spot is worse than playing contracts?'
I almost sprayed the chicken nuggets in my hand on his face. You have to know, when he first entered the circle last year, he patted my shoulder with such enthusiasm: 'I won't touch those flashy leverage things, just want to do spot trading, it's stable as hell!'
Now that I think about it, his 'stability' is purely self-comfort. Back then, whenever someone in the crypto group shouted 'some asset is going to hit a new high', he immediately transferred 20,000 to follow the trend; a few days later when someone said 'it's down to a safe line, it's the right time to buy the dip', he didn't blink and threw in another 30,000. In his words: 'Everyone is buying, they can't be fooling just me, right?'
So what happened? After half a year, the money in the account didn’t double, but rather shrank from 80,000 to just over 10,000. As a crypto analyst with five years of experience, I must say this: many people are like him, treating 'spot trading' as a guarantee of safety, only to end up falling into the 'boiling frog' trap—it's not the asset itself that has a problem, it's your operation that's completely wrong!
First trap: treating 'big V signals' as orders from above, you are just the last batch of retail investors.
The dumbest operation I've ever seen is when someone treats 'signals' on social platforms as investment guides. Those so-called 'big shots' who claim that 'certain assets must rise' have already secretly sold a third of their positions when they shout signals; by the time you excitedly enter the market, it drops 8% that day. By the time you realize and want to sell, you can't even find the counterparties.
Remember my words: there are no living Lei Fengs in the crypto market; all free 'insider news' is lagging. If there’s a chance to make a guaranteed profit, no one will break it down and tell you. When I analyze, I only look at data, not noise; the commotion in those groups is just for listening, don’t take it seriously.
Second trap: supplementing your position when the trend is downward; it’s not about bottom fishing but filling the pit.
The worst part for my friend is that he learned to 'buy more as it falls.' When the coin price drops by 5%, he supplements 10,000; when it drops by 10%, he adds another 10,000; by the third time, his assets were directly halved, with 80,000 in principal trapped. He always says, 'It’s dropped so much, it will definitely come back,' which is simply gambling on the market's sympathy.
The crypto market is a heartless machine; it won’t rise just because you shed tears over your losses. My iron rule is: never add to your position before the trend is clear. When it's time to cut losses, you must be decisive. Selling at a loss hurts, but at least you can preserve your principal, which is better than watching your money evaporate. Don't cling to the fantasy of 'waiting to break even'; there are plenty of opportunities to re-enter the market.
Third trap: fully investing in a 'concept asset'; when a black swan appears, it goes directly to zero.
What’s even more ridiculous is that he poured all 60,000 of his principal into a so-called 'potential concept asset' just because the project party painted a 'great prospect.' As a result, one day the project party suddenly announced a 'delay in landing,' and that day the asset dropped by 40%, leaving him completely stunned.
This is a classic case of putting all your eggs in one basket. I often tell my fans that splitting positions is not about diversifying risk; it’s about leaving yourself an exit strategy. My position strategy is: never invest more than 30% of total funds in a single asset; mainstream assets as a base, and concept assets should only have small positions for testing the waters. Don’t be greedy for those illusory 'hundredfold expectations'; preserving your principal is essential for surviving longer in the market.
Fourth trap: only knowing to 'buy on the rise and supplement on the fall,' not understanding K-lines means you are just wasting time.
In the end, I realized that this brother hadn't seriously looked at K-lines for half a year; all his buying and selling was based on feelings—chasing when it rises and supplementing when it falls, pure 'headless chicken operation.' Later, I spent half an hour teaching him the basics: if the upper shadow is longer than the lower shadow, it indicates strong selling pressure above; if each high point is lower than the last, this is a clear signal of a downtrend—when the trend is unclear, staying still is a hundred times better than chaotic trading.
K-lines are not metaphysics; they are traces of market funds. Even if you don't have time to study complex indicators, at least learn to observe trends and identify support and resistance; this is more useful than listening to a hundred 'big shot suggestions.' I spend half an hour every day reviewing K-lines, and it's much more reliable than blindly following trends.
