First of all, everyone entering this market certainly has a common goal: making money. But where does the money in the market come from, and how many people pay attention to the hidden rules in the market? Many people have asked, why do I earn little and lose a lot? When I make money, it’s either too little or I miss out, but every time I have to take a hit, I can’t avoid it. Why is that? Because you can’t hold on to your profitable trades, but you stubbornly cling to your losing trades. No one gives you a correct mindset, and no one gives you confidence. If the direction is wrong, you don’t know to cut losses in time; if the direction is right, you lack confidence to hold.
Here are several summarized points that will greatly help improve your trading level if read carefully:
1. Survival first: Buffett once said that there are three principles to achieving profits: First, preserve your capital; second, still preserve your capital; third, remember the first two. Therefore, regardless of the size of your trading account, this is the first principle. Every trade, we must have take-profit and stop-loss orders, keep in mind our trading discipline, don’t harbor luck or be greedy, and ensure that after a loss, we still have the strength to trade again.
2. Be good at seizing big opportunities. If you want your account to grow quickly, you must be good at seizing opportunities. Capture a big opportunity every once in a while, and patiently wait for the next opportunity. This can also be understood as winning with quality rather than relying on the number of trades. An excellent trader often needs to endure 99% of loneliness to welcome that 1% of their brilliant stage.
3. Pay attention to patterns and probabilities. Each cryptocurrency essentially has institutions and market makers behind it. Market makers are people, and people have habits and characteristics. The common methods and operational rules they use usually have traces to follow, which are deeply engraved in the genes of each cryptocurrency, such as the exchange rules of pressure and support, the rise and fall patterns, and the established probabilities, like the rise and fall probabilities of key candlestick patterns. Understanding the operational trajectory of each cryptocurrency is essentially grasping the operational rules of the market makers, managing the rise and fall probabilities, achieving knowledge of oneself and the opponent, ensuring success in battles, which must be the result of timely judgment and thorough consideration and preparation.
What I want to express here is to go with the flow. Enter when you have confidence, and admit defeat when necessary. It’s actually quite normal to fear losing and for the market not to follow your plan. If you have good risk management, there’s no need to be overly concerned; it can reduce the probability of profits turning into losses. I can illustrate this with a common mistake and a common trading habit; see the diagram below:
Trading with the trend is not wrong, but an uptrend on a five-minute chart might just be a pullback within a thirty-minute chart. Buying in here might initially seem like the right direction, but when the thirty-minute chart concludes its pullback, the price will naturally continue to decline, and at that point, you could go from profit to loss. Therefore, using higher time frames to choose entry timing is a very good habit.
Habitually comparing roughly 4-6 times the time frame chart before entering the market can greatly reduce the tragedy of empty happiness. After entering the market, you can also observe higher time frame charts to use your behavioral performance to avoid some unforeseen rapid declines.
4. A trading system that suits you. If we want to succeed in trading, we must build a trading system that suits ourselves. Continuously summarize experiences during trading, optimize the system, so that its success rate increases and the system becomes more refined, ultimately achieving stable profits. The live courses will teach everyone how to build a trading system that suits them, allowing you to stand undefeated in this market.
5. Choice is very important. In the cryptocurrency market, which is high-risk and high-reward, it’s better to worship the wrong god than to follow the wrong person. How far a person can go depends on who they walk with, and how excellent a person is depends on who guides them.
A thousand words boil down to one piece of advice: During a bear market, everyone can calm down to learn and think; in a bull market, one must not forget to ride the wave and must not be carried away.