After 10 years of trading, I entered the market with 68,000 from my job savings, and now my assets exceed 80 million. I quit my job to trade full-time, relying solely on trading for my livelihood and only engaging in spot trading, occasionally playing contracts. Though I haven’t turned 10,000 into two small targets like some people, I am very content and secure, dreaming of having an account balance of over 100 million by the end of this year, and even more capital to earn more money next year.
If you are determined to make trading your primary profession, this article will be your stepping stone, very brief yet profound!
After 10 years of trading, the core secret to my stable compound interest lies in my trading strategy.
In the cryptocurrency circle, there are some obscure knowledge or small tricks that may seem insignificant but are actually quite important. Today, let’s discuss a few.
Cost averaging is actually not that simple.
For example, if you invested 10,000 USDT when the price was 10 USDT, and later the price dropped to 5 USDT, and you added another 10,000 USDT, your average cost would be 6.67 USDT, not the 7.5 USDT many people assume. This situation is common in the market, and understanding this cost calculation is very helpful for managing your position.
The effect of compound interest is truly frightening.
If you have 100,000 USDT on hand, aim to earn 1% daily and then stop. If you can persist for a year with 250 trading days, your assets could grow to 1,323,200 USDT by the end of the year. If you continue for another two years, your assets could exceed 10 million. Of course, this is based on stable returns; the challenge lies in consistently maintaining this compound growth.
Probability, profit-taking, and stop-loss have their subtleties.
Assuming you have a 60% chance of winning on your investments, take a profit of 10% and stop losses at 10%. If you operate this way 100 times, your total return can reach 300%. However, the premise is that you must strictly adhere to your trading plan without being swayed by market fluctuations, especially during periods of high volatility.
Greed is the biggest stumbling block.
For example, if you start with 10,000 USDT and earn 10% each time, after 49 days your assets could exceed a million, after 73 days over ten million, and after 97 days possibly even a billion. But in reality, few people can achieve this because most cannot control their greed and end up failing. This is also why many traders make money but cannot hold onto it.
Contract trading and position management
In contract trading, position and capital management are extremely important. Many people like to use 20%-30% of their principal to open positions, but I personally prefer to use only 2%-5%, then apply a 20x leverage. This way, the risk is manageable, and you won’t be thrown off balance by large fluctuations.
A simple trading method I've personally tested, just using this one trick to master buying and selling points.
One, those who are skilled at buying are beginners.
In the cryptocurrency market, the best operating strategies include:
a. Regardless of market conditions, always maintain a 50% position invested in Bitcoin (BTC) and Ethereum (ETH), with the remaining 50% position.
Used to capture big opportunities.
b. During pullbacks in a bull market, many altcoin prices drop significantly. At this time, you can select some altcoins with widespread consensus and positive outlook for investment, waiting for the bull market to arrive.
c. During a bull market, various hot topics frequently arise, such as artificial intelligence, GameFi, RWA, public chains, platform coins, etc. You can consider investing a small amount of funds in hot speculation.
Once profits reach five times or more, promptly convert the earnings into BTC and ETH, clearly distinguishing between long-term investments and short-term speculation. The essence of finance is cyclical; understanding when to exit new project bubbles is wise.
Two, those who are skilled at selling are experts.
Avoid 'trading to become a shareholder', don't fantasize about selling at the highest point, as the highest point is often only confirmed in hindsight.
Two relatively reliable selling strategies include:
Target profit-taking method: Be content and happy. The market has ups and downs, and everything has its cycles. Set a profit target or expected price and place a limit order in advance. For example, if you need 1 million to buy a house this year, set a limit order that can earn you 1 million, and it will automatically execute when the target is reached.
Technical profit-taking method: Use the MACD indicator (set to 12.26, 9), focus on the 5-day and 7-day moving averages. When the 5-day moving average crosses below the 7-day moving average, forming a death cross, and the MACD's DIF line crosses below the DEA forming a death cross, it usually indicates that a significant drop is imminent.
Three, those who are skilled at staying in cash are masters.
In a bull market, hold firmly; in a bear market, decisively remain in cash. The highest realm of trading is learning to be in cash, as only by entering when the market has significantly dropped, and corpses are everywhere can you achieve maximum profit. However, staying in cash requires patience and self-control, being able to endure long periods of waiting and facing FOMO when others are profiting. There are at least 4-5 opportunities each year where the market drops by 20%; seizing these opportunities is crucial.
To achieve stable profits, remember these few iron rules!
1. Don’t let floating profits + turn into losses. Once you have more than three points of floating profit, set a protective stop-loss near the opening price; never lose your principal. Market conditions.
In the circle, a rise of more than three points is easy, especially for small altcoins. At this time, you can slightly expand your profit-taking position and consider a trailing stop-loss, especially in a bull market where frequent profit-taking is essential to protect your profits from being taken away. Normal people can hardly tolerate a situation where they were initially happy with floating profits, already thinking about what to do with the money they earned, only to see those profits turn into losses shortly after. The feeling of falling from heaven to hell can be unbearable for those with weaker minds; emotions can easily be influenced, affecting your decision-making and judgment, leading you to make some foolish decisions. When you eventually wake up from this state, you'll find that your account funds have also basically sobered up, and regret is too late.
2. Don’t let small gains turn into big losses! Just like playing baccarat, if I go in with 100 or 200 chips and win 500, I feel satisfied and retreat. The next day I win another 500 and retreat again, feeling happy. But on the third day, things don’t go as smoothly; I go in and lose 500, unwilling to give up, I want to bet again to recover, so I bet 500, but end up losing 1000, wiping out the profits from the previous two days. Then, unwilling to accept this, I continue betting 500 or even 1000 chips, resulting in a loss of ten thousand. This is a classic example of winning a little and losing a lot. 2. Embrace the trend + go with the flow; the buying price doesn’t have to be as low as possible, but rather as appropriate as possible. You won’t gain an advantage just because you bought at a low price, as the bottom is often not obvious in a downturn. Abandon trash coins; the trend is king.
3. In a speculative market, being adaptable is the worst approach. Use your fixed trading system + apply the system consistently; it doesn’t matter if you use a thousand methods, what matters is sticking to one method a thousand times. Staying still is the best defense; often, the times you are most reluctant to part with something are when you make the most mistakes. Take this advice seriously!
4. Patience is the foundation of making money. You may need to learn for a long time and be fooled countless times to understand the situation in the market. It’s okay; cherish every experience where you’ve been fooled; these are lessons on the road to investing.
5. When the price of a coin enters a stable upward channel, each pullback serves as a temporary stop, providing a good opportunity for us to get on board; there’s no such thing as a continuous rise.
Coins, pullbacks are like compressed springs, designed to jump higher.
6. Human judgment of a bottom is usually not a bottom but rather halfway up the mountain. The true formation of a bottom is seen in emotions and capital, so never blindly catch the bottom; often, 10 out of 9 will get trapped.
7. When holding positions in profit, close them when you reach your psychological target; don’t try to take it all. Also, pay attention to controlling your position and leverage; learn to strictly control your position according to the leverage of your product combined with your funds.
8. Use moving averages: Short-term trading generally refers to the 5-day, 10-day, and 20-day moving averages. When the 5-day moving average crosses above the 10-day and 20-day moving averages, and the 10-day moving average crosses above the 20-day moving average, it’s called a golden cross and is a buying opportunity; conversely, when it crosses below, it’s a death cross and a selling opportunity.
9. A poor mindset in trading can lead to losing everything, even if you have millions. Trading in cryptocurrency is about mindset; it is a psychological game among millions, a fierce psychological battle.
10. Finally, continue to learn investment knowledge in the market, enrich yourself, and summarize daily. As the saying goes, practice is the only criterion for testing truth; only through extensive real trading can one truly be considered a beginner in cryptocurrency trading.
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