You can view all financial industries in the world as scams, and then study how to avoid the risks within them, while also extracting wealth.
You are a person in society, and if you don't want to be eliminated, you must keep up with the times. When the wind blows your way, seize the opportunity, that's all.
Fly smoothly for a while, and when most people recognize it, you land steadily. Well, they highly recognize it, then turn around and go back to the factory to tighten screws. Why do so many people play with virtual currencies? According to the examples around me, there are actually too many stories of the underdog reversing their fortunes. But you must ask yourself: if you hadn’t entered this industry, would it be easier to earn 5 million by working your whole life or by winning the lottery?
I dare say that you will never be able to keep 5 million yuan in your bank account with these two things for your entire life.
But is it virtual and possible? I don't know if it is possible for you, but what I am sure of is: relying on this probability is greater than working a lifetime to earn 5 million or winning the lottery.
One is completely impossible, and the other has infinite possibilities. Which one do you choose?
Let me talk about myself. In the mid-2017 bull market, I entered the market with 300,000, peaking at over 5 million. At that moment, I thought I was a master in the crypto world and decisively quit my job to focus on trading stocks, even borrowing money to trade cryptocurrencies.
However, reality gave me a hard slap in the face. In November of that same year, Bitcoin plummeted, causing me not only to lose all my profits but also to incur significant debt. In the end, I had to sell my house, and my wife and child almost left me. 2021 was my darkest moment; in just a few months, I experienced a fall from the peak to the abyss.
I have been trading stocks for ten years now. When I first entered the market at its peak, I reached over 5 million, experienced a week of going to zero, felt hopeless and depressed for half a year, and then returned to the crypto market, trading again from 10,000 to the following number. In fact, the so-called enlightenment in cryptocurrency trading means being calm and composed regardless of whether the market is good or bad, and being able to maintain a stable state of mind along with the profit curve!
The so-called returns are merely the basic rewards from correctly executing trading signals. After seeing many skilled traders rise and fall in this market over the years, there are no secrets in this market, no so-called trading secrets or tricks. It seems that many traders are pursuing a so-called holy grail, but unfortunately, there is no holy grail in this market, just as there are no perpetual motion machines in physics. What exists are years of experience, correct cognition, and consistent execution.
Before enlightenment, it is as difficult as climbing to the sky.
After enlightenment, it becomes easy.
Many experts in the cryptocurrency world realize after gaining enlightenment that trading is quite simple, while many retail investors believe that the skills of profitable traders come from countless hours of learning and numerous losses. It's normal for them not to want to teach others, and what they share is often not the core! In the past few months on Zhihu, I have actually made a considerable effort to share core experiences, but even if someone understands, they may not believe it. Even if they believe it, understanding it is challenging. Achieving it is also very, very difficult. One can only say that the time has not yet come; once the time is ripe, one will gain enlightenment naturally. The process of trading and gaining enlightenment is the same: from seven losses to two breakevens to one profit, it's merely about focusing without distraction, not being greedy for various profit models; all previous transaction records become waste paper: from being talkative about the stock market to becoming taciturn. Here, I summarize five points from my personal enlightenment.
What does it feel like to gain enlightenment in cryptocurrency trading?
1. Only earn what you can earn. As the saying goes, 'there’s enough water to drown three thousand, but I only take a ladle.' I only engage in certain upward bottom formations, as practice makes perfect; the longer the time, the greater the grasp, and it has already become a cash machine.
2. The path is simple; starting from learning hundreds of technical knowledge, from moving averages, patterns, Dow theory, and later on Gann waves, I ultimately discovered they all have one characteristic: they are based on candlesticks. Just like clothing is something external to the body, I removed the excess and was left with only the fluctuations of capital and price, which led to a qualitative leap in trading.
3. Leave room for any trade. No matter how confident you are, do not operate with a full position, which is equivalent to leaving yourself a way out!
4. It’s better to miss an opportunity than to make a mistake. There are no good but seeds, only good entry points. The entry point directly determines how much profit you will make in the future. Even if you are optimistic, if the price is too high, firmly avoid entering, wait for a pullback, and find a good entry point.
5. Operations must be planned. Some people watch the market every day, switching from one thing to another, which is exhausting. Therefore, you need a trading plan. Before entering a trade, assess whether the risk is greater or the opportunity is greater, what the stop-loss and take-profit targets are, and how to expand positions. Only in this way can you establish a trading system and achieve long-term stable profits in the cryptocurrency market.
Life is like trading cryptocurrencies, filled with both joy and sorrow, with rises and falls alternating.
Many people who start trading cryptocurrencies have the following characteristics: they know nothing, only listen to rumors, blindly chase trends, and end up getting stuck or even liquidated. They lack skills and do not observe the market, relying solely on feelings to enter trades. Their mindset is not stable, and their inner strength is insufficient; with even slight fluctuations, they either can't hold on or get trapped. Looking at their transaction records, they are either at the peak or halfway up the mountain; continuing like this, it's impossible to profit.
There was originally no road in the world; when many people walk it, it becomes a road. Trading on this path, although not groundbreaking, can be considered pioneering. The roads walked, the rivers crossed, observing the trends of cryptocurrencies, identifying these 12 types of bottom signals that easily trigger an increase, and spending half a year to verify them, I found that the success rate is very high!
In simple terms, it's about seizing short-term rebounds at the bottom. If these 12 types of bottom signals appear, enter without hesitation. Many might wonder if this will trap them; I focus on short-term trades, not greedy, controlling within ten points, a small profit is enough.
When a bottom signal pattern appears, there is usually an increase of more than ten points, minimizing risks, taking a bite of meat in exchange for a better position.
As the saying goes, there are only three ways to make money: with your hands, with your brain, and with your money.
Making money with your hands is hard-earned money; making money with your brain puts you above others, but the real way to make money is to make money with money.
Making money with money sounds appealing; who doesn't want to make money that way? But the prerequisite for making money with money is that you must have money, and secondly, you need the relevant knowledge to use that money to make more. The cryptocurrency market provides such a perfect opportunity.
Most traders have a very superficial understanding of the relationship between price and volume: if a price change is accompanied by strong trading volume, then that price change is likely to continue in the current direction; conversely, if the trading volume is below 'normal,' then that trend is less reliable. Most traders' understanding of volume remains at this 'depth.'
And regarding the different performance characteristics of volume in trend recovery patterns, trend reversal patterns, technical charts, and volume overlay lines, most traders know very little.
One of the fundamental skills of volume analysis is the interaction between volume and simple price patterns. Specifically: ① How volume patterns indicate price changes in trending and non-trending markets; ② How volume patterns confirm price changes.
If the judgment is accurate, then volume can be used as a navigation system for the trading battlefield. It serves as an amplifier for the market, clearly revealing the mindset and confidence of buyers and sellers when pushing the price into a certain pattern.
After seeing the battlefield clearly, we will compare this volume-price pattern with volume indicators and oscillators to interpret trends and capture trading opportunities.
Bitcoin trading is a real-world game: make fewer mistakes than others.
Trading cryptocurrencies is an addictive and dangerous game. Zero-sum games are cruel, but the cryptocurrency market isn't even zero-sum. Because of this nature, the market will prove in various ways that most people are wrong. The market changes rapidly and is difficult to grasp; the only way to survive is to control oneself, manage one's desires and emotions, and make rational decisions and execute them.
Decision-making is easy, but execution is hard. We all advocate the philosophy of unity of knowledge and action. Applied to Bitcoin investment, understanding the market is 'knowledge,' and trading is 'action.' The meaning of 'knowing is easy, acting is hard' is that the distance between knowledge and action is far more than a thousand mountains and rivers, especially in Bitcoin trading. This may be because the cryptocurrency market is a condensed version of life, hence also condensing the opportunities for mistakes.
People often say, don't fall in the same place twice. But for those in Bitcoin trading, this saying is basically a joke: who hasn’t repeatedly lost in the same place? Westerners have a similar saying: a fox cannot fall into the same trap twice, and a donkey won't fall in the same place twice.
However, in the field of Bitcoin investment, for most traders, it's basically impossible to learn timely lessons from mistakes and ensure that they won't repeat them next time. If we use the aforementioned saying as a standard, everyone in the Bitcoin market is a habitual offender of knowing their mistakes yet still repeating them; they are fools who can't be awakened even by a thousand slaps, and they are like foxes and donkeys who make the same mistake twice in the same place. As the ancients said: 'Clearly knowing yet clearly committing again. Knowing is one thing, committing is another.' Successful traders have usually been slapped by the market countless times, and the ways they are slapped are not just about losing money, but often about liquidation.
To avoid repeated mistakes, some people even write rules on the back of their hands, which they see every time they place an order. However, once in a trading state, they revert to their old ways. Many feel guilty about this, even believing they are dumber than a donkey, that they are not cut out for trading. In fact, investors need not be overly harsh on themselves, as being able to understand everything yet not controlling oneself is basically the norm for speculative traders.
Although I repeatedly make mistakes, those with a heart can see through these 'criminal records' and find that the probability of their mistakes is slowly decreasing, and the 'gains' from mistakes are slowly increasing. These people will ultimately understand: successful traders require meticulous thinking, strict constraints, inner strength, and a high cost of making mistakes. Therefore, many excellent traders have gone through many hardships. When Buffett said he only understood investing at 60, it must be for a reason. There’s a saying on Wall Street that in speculation, the average age of those who achieve modest success is 50, those who gain fame at 60, and those who may accomplish great things at 70.
Youth comes at a price. Fortunately, youth is the greatest capital; they can trade time for space and tuition for experience. However, this school charges high tuition fees, and there are many excellent students who can’t afford the fees. Therefore, one must cherish every trading opportunity and every mistake; these are the cornerstones for increasing one's skills and improving one's level.
While repeatedly falling, different people have different postures. These postures can be divided into three types: turtle-style falls, roly-poly toy-style falls, and pilgrim-style falls.
A turtle-style fall means that once it falls, it cannot get back up and can only lie on its back waiting for help; a roly-poly toy-style fall means falling repeatedly, often in the same place, but each time it stubbornly gets back up, then changes direction and continues the next round of falls and getting up. A pilgrim-style fall means that with a firm goal in mind, even if it falls, it will still get up and continue moving forward, with each fall bringing it closer to the goal. Choosing the Bitcoin industry means you will inevitably fall at any time; since that’s the case, you should choose to be a pilgrim in thought, heading towards your identified 'road to success.'
Buffett said, 'We are not worried about making mistakes; what I consider is how to do differently in the future.' Bitcoin investors are ordinary people living in the world, filled with distractions and even desires, so most have experiences of repeating mistakes, and will continue to do so in the future. The standard of 'not falling in the same place twice' is unattainable for anyone in the Bitcoin market.
However, according to game theory, Bitcoin trading is a kind of real-world game. The characteristic of a real-world game is that as long as you make fewer mistakes than others and control the losses incurred when mistakes happen, over time, you will be the successful one.
If you still feel confused and have no idea how to start in this market, comment '333' to get on board!
