Since I first entered the cryptocurrency space, my funds rose from fifty thousand to one hundred thousand, then jumped to three hundred thousand two hundred, and soon after, in my third year, broke through five hundred ninety thousand. By August of the fourth year, this number skyrocketed to three million seven hundred eighty thousand, and just three months later, in November, my assets had accumulated to over seven million. In the following years, I had skillfully withdrawn as much as thirty million in profits. However, this journey was not smooth sailing. At one point, my assets approached four million; at that time, I thought I was a big player in the cryptocurrency space and impulsively quit my job to focus entirely on trading, even going into debt to increase my stakes. But fate played a cruel joke on me; the arrival of a financial storm made me not only lose all my profits but also burdened me with heavy debt.
Eventually, I had to painfully sell my property, and my relationship with my husband even reached a freezing point, nearly leading to separation.
That was an extremely dark period; I fell from the cloud to the abyss in just a few months. This experience made me deeply realize that my past success was largely due to luck.
Thus, I made up my mind that if I wanted to continue on the road of trading, I must settle down to learn. In addition to consolidating foundational knowledge and analyzing market dynamics, I also deeply studied technical indicators. I understand that without in-depth market research and a reasonable capital management plan, funds will ultimately run out. As a retail investor, without a solid backing, blindly following trends will only lead to regret when exiting the market.
In the next three years, I cut off all contact with classmates and friends, stayed home day after day to review and study. When I got tired, I would directly take a nap on the keyboard. This extraordinary effort finally allowed me to achieve financial freedom through trading.
In the face of a drop in the cryptocurrency market, how can long-term investors break through? This trick will help you navigate difficulties smoothly.
The cryptocurrency market is experiencing dramatic changes, and a crashing market is surging. When you open the market software, what greets you is a sea of red. The price of Bitcoin has plummeted sharply, followed by Ethereum also suffering, and altcoins have been severely hit, with prices nearly halving. In various investment groups, the sound of lament fills the air, with investors crying out, "I have lost confidence in my investments!" "My principal is almost gone!" In this situation, if you are a long-term investor, your heart must be filled with confusion and struggle: should you remain inactive and wait for the market to warm up? Or should you bite the bullet and cut losses in time? Or should you seize the opportunity to buy the dip and increase your positions?
Don't rush; today I will bring you a wealth of practical information, teaching you five simple yet crucial strategies to smoothly navigate the energy market and ultimately welcome the dawn of the bull market.
Clarify your investment intentions and stick to long-term logic. When faced with a drastic drop, the first thing to do is to revisit your original intention for choosing long-term investment. The underlying logic of long-term investment, simply put, is to firmly believe in the future development potential of blockchain technology and to be willing to exchange time for the space of asset appreciation.
If you have merely been attracted by the rumors of 'getting rich overnight' and rashly entered the market, then feeling panic in the face of the current downturn is a perfectly normal reaction. However, if you have thoroughly studied the halving cycles of Bitcoin and the developmental trajectory of the Ethereum ecosystem, you will deeply understand that drastic drops are actually an unavoidable phase in the long-term investment journey, and they may even represent a turning point full of tremendous opportunities. Looking back at Bitcoin's development history, each significant drop has been followed by successful breakthroughs, creating new price highs.
In the face of a market crash, five strategies can help you break through and temporarily bid farewell to market volatility, maintaining a calm mindset. Faced with a 50% drop in cryptocurrency prices, checking your account assets will only increase anxiety and be of no help to investment decisions. Remember, funds for long-term investment should be idle funds that you will not need in the next three years.
As long as there is no need for funds in the short term, the fluctuations in the market are merely changes in numbers. So, it might be a good idea to decisively close the market software, uninstall related apps, reduce attention to group chat information, return to normal life, and set a six-month deadline for yourself to revisit the market.
Rationally distinguish and avoid blind cutting of losses. Unless you are sure you have chosen the wrong investment target, do not easily make the decision to cut losses.
Before deciding whether to cut losses, first carefully examine the currencies you hold: mainstream currencies like Bitcoin and Ethereum, which have endured numerous severe market tests, should be firmly held even if their prices drop; for those unknown altcoins, if you determine they are worthless air coins, do not harbor illusions and quickly cut losses; for currencies in mainstream tracks, such as DeFi and Layer2, pay attention to whether their project teams are still actively promoting the project. If the team is still operational, then you can continue to hold.
In summary, cutting losses must be based on rational analysis, not emotional influence. Start a regular investment plan to accumulate low-priced chips. If you currently have idle funds, the drop in the cryptocurrency market provides you with an excellent opportunity for regular investments. The method is very simple: after your monthly salary arrives, take out 500 yuan to purchase valuable and potential digital currencies. Regardless of how the market price fluctuates, you must steadfastly execute your regular investment plan. Investing regularly in a bull market is like planting seeds of hope in spring. When the bull market arrives, you will definitely be grateful to your current self for sticking to the regular investment.
Utilize the opportunity of the energy market to enhance investment awareness
A bear market is a golden period for investors to improve themselves. Rather than lamenting in front of K-line charts all day, it is better to invest time and energy into learning and research. Delve into the real problems your invested digital currency solves and comprehend the value support behind it. Remember, in the investment field, you can never earn money beyond your understanding. Only by continuously enriching yourself in a bear market and enhancing investment awareness can you easily achieve profits when the bull market arrives.
Assess risk thresholds to ensure investment safety.
Long-term investment is definitely not about blindly following trends; you must have a worst-case plan in advance. Ask yourself, if all the funds you invest are lost, will it severely impact your daily life? If the answer is yes, then it means you have invested too much. Remember to invest with idle funds, maintain a calm mindset, and only then can you hold on until the dawn of a bull market. Avoid investment pitfalls to protect asset safety. In the face of a drastic drop in the cryptocurrency market, there are three investment red lines that must not be crossed:
1. Strictly prohibit borrowing money to supplement positions: The duration of a bear market is difficult to predict, and borrowing money to supplement positions will not only increase your capital costs, but if the market continues to decline, the interest from the loan may become overwhelming.
2. Absolutely eliminate leverage:
Contract trading is akin to gambling in a casino, with extremely high risks. Statistics show that 99% of investors participating in contract trading ultimately face liquidation.
3. Do not easily trust rumors: In investment groups, information urging you to 'buy the dip on hundredfold coins' often hides traps for cutting losses. Never trust lightly. The saying in the cryptocurrency community goes: 'Make money in a bull market, earn coins in a bear market.' Historical experience repeatedly proves that those who can hold on through a bear market and maintain rational investment often become big winners in the next bull market. So, when prices drop, there is no need to panic; time is the most powerful ally of long-term investors.
Sharing some insights from speculative trading
In different stages of life, life experiences and insights can greatly change our thoughts. The same is true in the speculative market. From initially entering this market to the first year, second year, and third year, my inner feelings change each year, and my understanding and experience of speculative trading continue to grow. Only through continuous reflection and summarization of the market can I gain insights over these years.
Today, I will share some insights from my experience in the speculative market for your reference. Success equals small losses plus various profits accumulated over time.
Avoiding large losses is quite simple: make survival the first principle, and when there is a danger that hinders this principle, abandon all other principles.
The way of trading is to defend an unbeaten territory and attack win-able enemies. Many people perform very well in simulations, even doubling their capital within a few weeks. However, once they engage in real trading, they often lose money. At this point, their most common behavior is to continue researching technical analysis methods, constantly trying to improve their success rate, hoping to make money this way.
In fact, this approach is a detour and unnecessary. Because usually, technical analysis only accounts for about 20% of the overall trading level, its importance is not significant. Many experts have a low success rate but can still make money continually. If your simulated trades perform very well, it indicates that your techniques are very good, and there is no need for further research or improvement. You should focus your efforts on other aspects, such as capital management, increasing positions, grasping long-term trends, etc. You must hold on to your good cards and reduce the bad ones. If you cannot persist with your good cards, how can you make up for the losses caused by bad cards? Many quite good traders ultimately lose all their earnings because they are unwilling to stop trading when losing money. When I lose money, I tell myself: you must stop trading, wait for clearer market signals. And when you get good cards, you must have the patience to hold, otherwise, you will not be able to make up for the losses caused by bad cards.
Many traders frequently make the mistake of trading too often. They do not choose the right trading timing. When they see market fluctuations, they want to enter trades, which is forcing themselves to trade rather than patiently waiting for the right trading opportunity.
The reason we can profit is that we have patiently done a lot of work before entering the market. Many people, once they make a profit, become complacent about trading, leading to frequent operations. The following few losses can leave them unable to cope, resulting in significant losses, even losing their initial capital.
Whenever I enter the market, I always set stop-loss points in advance. This is the only way that allows me to sleep soundly. I always avoid setting stop-loss points at price levels that the market can easily reach. If your analysis is correct, the market should never retrace to the stop-loss price.
If the market reaches the stop-loss point, it means this trade was a mistake.
My worst trade stemmed from impulse. Based on my trading experience, one of the most destructive mistakes in trading is being overly impulsive. Anyone making trades should follow established trading signals and should never hastily change their trading strategy due to momentary impulse. Therefore, avoiding impulsiveness is the first principle of risk control.
I have been engaged in trading for over 10 years. If I hadn’t learned to stay calm early on, I would have been driven mad by the ups and downs of my trading career.
Traders are like boxers; the market can strike you at any moment, and you must remain calm. When you are losing, it indicates the situation is unfavorable for you. Don't rush; take your time. You must minimize your losses and protect your capital as much as possible. When you suffer significant losses, your emotions will definitely be affected. You must scale back your operations and reconsider your next trade after some time.
Why can I achieve such a high profit rate? It is because I fear the market's unpredictable changes. I have found that successful traders are usually those who fear the market. The fear of market trading makes me choose the right timing for entry. Most people do not wait until the market conditions are clear before entering; they always enter the forest in the dark, while I always wait until dawn to go in. I do not predict the direction of the market changes before they occur; I always let the market changes tell me the direction of the market. Choosing the right time and waiting for the perfect opportunity to attack is crucial; otherwise, I have no choice but to give up. This is my most important trading principle.
Do not let the joy of profits cloud your judgment. Understand that the hardest thing in the world is how to maintain consistent profits. Once you make money, you will want to earn even more. In this way, you will forget about risks and doubt the correctness of your established trading principles, which leads to self-destruction. Therefore, you must remain cautious at all times: be very cautious when losing money and even more cautious when making money.
Trading strategies must be flexible to respond to market changes to demonstrate your highly cautious approach to operations. The most common mistake most traders make is that their trading strategies remain unchanged. They often say, 'Why is the market completely different from what I thought?' Why should it be the same? Life is not always full of uncertainties. When your important stop-loss point is broken by the market, it is highly likely that you have encountered a volatile market or a trend change. At this point, how can you continue operating under this trend? Therefore, you must be very cautious and wait for things to become clearer rather than rashly continue operating.
Before entering the market, take a moment to think: consider how many professional skills support you in battling in the market, whether your mindset can withstand the ups and downs of major fluctuations, and whether your limited funds can handle the infinite opportunities and losses. Even sunken ships have a pile of nautical charts. The most critical factor for trading success does not lie in which rules you use, but in your self-discipline. Time determines everything.
Life is not just a battle of strategies; to some extent, it is also a competition of time and life. If Buffett lives 10 more years, even with a mere 5% annual return, his total wealth growth would be enough to dominate the world. Remember, excessive trading is a speculative market that can be traded at any time. At any moment, there is always a market open globally, and there are dozens of speculative products providing trading and profit opportunities at different times. Many traders develop the habit of always watching the market, which can lead to impulsive trading. Sometimes they trade several times a day, unknowingly increasing their positions until they reach a dangerous level. Excessive trading not only increases your trading costs but can also trap you in a self-destructive cycle of trading for the sake of trading.
Seize the market conditions. The speculative trading market may present numerous opportunities for profit, but not every trading opportunity is worth pursuing because funds and personal energy are always limited. We need to maximize the value of our funds and energy, which means you should only enter trades when significant market conditions arise. A single profit should outweigh the total of several small trading profits; this not only saves energy but also ensures better results.
Maximize profits by focusing on price breakthrough opportunities. When prices break through in the market, especially breakthroughs at key points, it represents significant profit opportunities. When market prices are in a prolonged consolidation state, once an increase or decrease breakthrough occurs with accompanying transaction volume, it is a good time to establish new positions.
Formulate a trading plan and risk control strategy. Speculative trading, under the influence of leverage, must be accompanied by trading risks. These risks can be fatal under leverage, so it is essential to establish preventive measures for various emergencies before trading, such as how to set stop-losses and implement position increases and decreases.
Summarize the trading mistakes you have made. For every mistake in trading, we must carefully document it, delving into the reasons and various related factors, and regularly check to see if we have repeated our mistakes. This way, you can progress more quickly.
Opportunities are reserved for those who are prepared!
Seizing opportunities is the key to success!
What are you still hesitating about!
