A sharp drop? A disaster? Actually, these are not scary. We have already gone through so much; the most terrifying thing is only one thing, and we have no experience with it yet.
Brother Sheng remembers that in 2013, during the first Bitcoin bull market, everyone entering the market to trade memes and top tokens was probably not much different from today’s newcomers. The constant struggle between the 'risk of going to zero' and 'extraordinarily great potential' was full of passion.
Even in a bear market, people still feel it is merely a great retreat; every pullback is just for a better opportunity to get on board.
In 2017, when ICOs were issued, whether in terms of asset types or assets, they were all telling the same great story: 'Let blockchain reconstruct a new world,' making the future better. Even when the bubble burst, we would still believe that fearing the bubble means you are not qualified to taste the delicious beer.
The bear market has left Binance and stablecoins while laying the groundwork for DeFi, etc. During the bear market, we still firmly believe that the future will be better.
In 2021, when the bull market arrived, people's beliefs were further strengthened through baptism. Even significant downturns like 512 quickly rebounded because in this round we experienced thrilling revolutions such as: 'DeFi in decentralized finance challenges traditional finance' and 'NFTs grant individual rights,' as well as the highlights of 'teaching Tencent how to make games through GameFi's GMX.'
In this round of the bull market, what we experienced was...
"Altcoins are all scams."
"Project parties and VC coins are all here to exploit the retail investors."
"Market makers that do not cut the grass are not good market makers."
"A president who cannot trade is not a good president."
"Those who play VC coins are fools."
"PVP is the future."
"Those who play memes are also becoming fools."
In this round, we experienced a transition from 'the crypto space only has PVP left' to 'PVP is the classic use case,' and then to 'P is no longer moving,' 'whoever P will die.'
This round in the crypto space, most people are no longer looking forward to any revolution or future; they are discussing which to chase, and whether to chase at all? On the contrary, we look forward to Trump holding meetings, expect the US to implement policies to drive the market, and hope institutions come in to buy, but we are just not daring to anticipate new innovations, especially with the explosive development of AI agents outside. Looking back, the crypto space is simply at a level that is no longer comparable to PhDs and kindergartners; it is purely at the level of artificial intelligence to artificial stupidity.
Of course, you can still vaguely see some people on Twitter weakly waving their fists, calling for a revolution. Others are saying, 'This is probably the bottom,' and there are sporadic voices weakly mentioning hard-to-understand terms like payfi and rwa, but they are met with ridicule: 'Did you buy the dip again today?'
The scariest thing about the crypto space is not the relentless decline or the bear market truly arriving, but rather the increasing awareness of the overall high bubble in the crypto space—this was originally a good thing and not a big problem, just like the overvaluation of growth stocks is not a significant issue.
However, if the high bubble begins to accompany a 'wake-up' realization, problems will arise. We all recognize Bitcoin's high value, but if there is no prosperity across the entire chain, would Bitcoin also be greatly affected?
Confidence is more important than gold. Is your belief in the overall development of the crypto space as strong as it was a few years ago? Is your confidence in Bitcoin as powerful as it was a few years ago?
I still expect new good things to emerge after the bubble is squeezed out. This is called the law of large numbers; in the end, the ratio of right to wrong must be 1:1, meaning half wrong and half right.
Since everyone’s judgments about the market's correctness are the same, how do some people make money? This involves the question of profit-loss ratios. You must make small losses and large profits. Suppose you make 10 trades, 5 stop-loss, with a loss of $100 each, that’s $500. The remaining 5 are profitable, with at least $200 profit each. Isn't that a total profit of $500?
And how do most people operate? They correctly judge the market, quickly take profits, fearing a pullback will erase their gains, and when they misjudge, they stubbornly hold on until they are liquidated. This is making small profits and suffering large losses; how could one possibly make money?
Since everyone's win rate is like rolling dice, why not roll the dice to open positions? Because rolling the dice can only determine the direction—long or short; the dice cannot tell you the entry and stop-loss points.
There are not always good entry and stop-loss points. A good entry point must have a small stop-loss and a large expected return, which is called a large profit-loss ratio.
By now, you should understand that no one is saying that reverse judgments are unimportant. We cannot improve our win rate; we need to rely on a large profit-loss ratio and time perspective to guide our methodology. We need to take the most correct and easiest path to success. That's it for today; feel free to reflect on this.
These words are all typed by me, not copied from anywhere else. You should be able to see my tone throughout.
The significance of these things can be illustrated with an example: Many people spend their entire lives gathering information, learning various indicators, and studying different technical analysis methods, searching everywhere for the holy grail of trading!
Ask yourself how many technical analysis books you have read and how many indicators you have studied. If you understand that trading is just about probabilities, not judgments, and about making small losses and large profits, then you will realize that technical analysis and indicators are basically meaningless, and you won't waste time going further down the wrong path.
Whether it's paid or free, I suppose no one has told you these things, right? The trading market is filled with many people selling placebos. Those who talk about indicators, purely focus on technical analysis, peddle gossip, or analyze the market from a macro perspective are all this type of person. They are merely targeting your anxious mindset to do things favorable to them, but meaningless to you. Don't go down the wrong path; if you do, no matter how hard you try, you'll only go further and further away.
Sometimes I fear that you won't understand or grasp what I'm saying, thinking I'm just spouting nonsense. I have gone through such times, and I have come from that state.
The most important book in the trading field is 'Reminiscences of a Stock Operator,' known as the trading bible. If you ask anyone who trades, they will tell you that 'Reminiscences of a Stock Operator' is the book that has influenced them the most. Its status is comparable to the Christian Bible and the Marxist ideology of the Communist Party.
The entire book has no substantial content, and it is impossible to talk about candlesticks; candlesticks did not exist in Livermore's era.
The entire book is filled with phrases like 'opportunities are waiting to be discovered' and 'profits are earned by staying still.' I earn big money because I remain as stable as a mountain, sitting still, and so on. If you truly want to continue on the path of trading...
Trading Principles
There is a very important principle in trading: do not make small profits, and do not suffer large losses.
Simply eight characters, but actually very difficult to achieve. For example:
When you open a position at 20,000 and it rises to 21,000, you feel great, taking a 5% profit. But then the market keeps rising to 25,000... you made 5% but missed out on 50%; then you tell yourself you want to make big money, so this time you refuse to take profits. The market goes back to 20,000, and you open another position. It rises to 21,000 again, and you remind yourself to learn from the last lesson and hold on to make big money. But the market goes back to 20,000, dropping below to 19,500, and you have to stop loss.
I find it really hard!
Many people spend their lives constantly switching between difficult situations, never able to escape. Is there a way to profit regardless of whether it's a big market or a small market?
No, it must be a choice between two options. I generally choose not to make small profits.
I cannot do everything I say 100%, nor can anyone, but I can tell you the correct principles. How much you can achieve depends on personal cultivation. Each of us can only achieve a certain proportion of these principles; we should try our best to increase that proportion.
Trading Mindset
Whether you trade short-term or long-term, in a big market, if you make 200%, as long as you can retain most of your profits, when the next big opportunity comes, you can earn another 200%, which means you've multiplied your capital by 4... As long as you can preserve profits, you can compound your returns. If you make 200% this time and then lose it all back, what's the use? In the trading market, there's no concept of missing out; there are only losses and profits.
Some people may feel they have found the right path and are about to become rich.
Touching the path merely indicates that your chances of making money have increased.
Trading Misconceptions
Many people have misconceptions about trading, such as believing that small funds should trade short-term to grow their capital. This is a complete misconception; this way of thinking is wholly about trying to exchange time for space, hoping to get rich overnight. Small funds should focus on medium to long-term investments to grow.
Is one piece of paper thin enough? If you fold a piece of paper 27 times, it becomes 13 kilometers thick. If you fold it 10 more times, it gets to 37 folds.
The Earth is not as thick as him... If you fold it 105 times, the entire universe will not be able to contain it.
If you have 30,000 in capital, you should think about how to triple it in one go and then triple it again in the next wave... then you will have four to five hundred thousand. Instead of thinking about making 10% today and 20% tomorrow... this will eventually lead to your demise. Always remember, the smaller the capital, the more you should focus on long-term strategies, using compounding to grow big, rather than trading short-term for small gains.
I often see a saying:
My liquidation price is XXX, not afraid; I am using 2x leverage, and the liquidation price is XX, not worried.
When faced with market conditions like 312 or 519, are they gone?
Why mention the liquidation price? Is the bottom line of trading about aiming for liquidation? The bottom line of trading should be to avoid losing money, not just to avoid liquidation. The future is unpredictable; it’s just a matter of probabilities. What if liquidation happens and you lose everything?
#风险回报比
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