We must admit that throughout history, humanity's desire for 'quick wealth' seems to be ingrained in our bones; no matter how we look at it, we cannot let go. In this crypto space, they have firmly grasped this 'soft spot' of human nature. Look, various 'hundred times coin myths' and 'ten times in three months' stories fly everywhere, just like sprinkling chili powder, directly hitting your dopamine, making that itch in your heart surge. Take Ordi coin in 2023, for example, it skyrocketed from 0.1 to 1 dollar, the growth was like a rocket. Some people easily earned ten times through dollar-cost averaging. This thrill of 'buying low and selling high' is much more satisfying than scrolling through short videos. Just like trader Lao Luo Sheng said: 'This market is a jungle; the ones who survive are not just the bold ones, but those who understand the 'greed' strategy.'
Second, information overload and group effects: It feels like if you don’t buy, you’ll be out of touch with the world. In this crypto circle, every day there are new things, new concepts, new KOLs, new "news" popping up as if they cost nothing. You feel that if you don't keep an eye on it every day, you might miss a big treasure. When you see someone on Weibo sharing their earnings of '100,000 a month', and your friends are all shouting 'the bull market is here', your heart feels like it's racing. At this time, a thing called 'FOMO' (fear of missing out) arises, forcing you to rush in. Think about it, during the Bitcoin bull market in 2021, over 60% of retail investors were like headless flies doing random things, and in the end, they all got stuck. Just like what Ti Afiro said: 'If you make a decision on a whim, your winning rate won't be better than that of a novice.'
Third, loss aversion and psychological traps: the more you lose, the more you want to recover. There’s a strange thing in this crypto circle, which is the taste of loss; it makes you think more about making back what you've lost. Think about it, to earn 100% in the crypto circle, you need to double your principal; but to lose 50%, that happens at a frightening speed, just half the effort. When you have a floating loss in your account, your natural reaction is to 'add to your position to average down', thinking if you buy more, when it goes back up, you can recover everything, right? But folks, what kind of logic is this? It's like adding fuel to a fire; the more you add, the more it burns, but in the end, nothing is left. There is data showing that many of those who played with 100x leverage on BitMEX ended up with catastrophic losses because they were 'unwilling to lose money', and their accounts went to zero. Just like what Lao Luo Sheng said: 'Adding positions when losing money is like dancing on a grave, asking for trouble!'
Fourth, how to 'quit' this impulsiveness? A rational trading system is necessary. If you don’t want to be led astray by the 'evil' of the crypto circle, you need a reliable trading system to manage human weaknesses. First, we must have a trading plan, and not operate blindly based on feelings all day. For example, set clear entry conditions, like breaking key resistance levels, and also set a stop-loss line, for example, if the principal exceeds 3%, quickly take the loss. Set a target for taking profits, like taking profits when floating gains reach 50%. Let’s look at the 'shark pattern' example that Lao Luo Sheng mentioned; following the plan, the success rate rises steadily. Furthermore, we need to transform our greed into compound thinking. Think about it, Lao Luo Sheng is right, 'those who live long are the ones who can truly get rich.' Let’s not think about doubling in a short time; let’s consider compound interest. If the annual return is 30%, over several years, the returns are shocking. Also, we must stay away from those sources of temptation.
Turn off trading notifications on social platforms, and don’t obsessively watch useless market software every day. Just like Chen Xiao, who focused on K-lines for three years, not caring about circles or news, look, 200,000 turned into 70 million in the end. The 'poison' in the crypto circle is actually human nature; we see it everywhere, and there are 'mythical stories' in this crypto circle, but we must be clear in our hearts that behind these myths is a rigorous trading system. Those who can walk out from 'above' and can make stable profits are not because they are strong in heart, but because they have calculated and planned for human weaknesses in trading. Every time you feel impulsive to enter the market, and your heart is racing, just remember what Lao Luo Sheng said: 'When others are greedy, I am fearful; when others are fearful, I am greedy— but the premise is that you have enough position and confidence. Finally, let’s talk about the position management issues we discussed in previous live streams, and I share tips for self-learning position management: for example, if you take out 30,000U to trade contracts, my suggestion is to divide it into 3 parts, each part 10,000U. Use one part each time you open a position, fixed at 10,000U, with Bitcoin not exceeding 10 times and altcoins not exceeding 5 times.
If you lose money, for example, if you lose 1000U, you should add 1000U from outside; if you earn 1000U, you should withdraw 1000U. Make sure that recently every time you open a position, you can guarantee a fixed position of 10,000U. Until you earn 60,000U with 30,000U in this way, increase each of your positions to 20,000U. The benefits are: First, divided positions + low leverage, avoiding the exchange's pin that leads to losing all your funds. Second, avoiding the above issues. On a certain day, if you're up, and then lose everything, at most you would lose 1/3, leaving the rest as a buffer. Third, maintain a fixed position so that whether you are losing or making a profit, you can keep a relatively calm mindset, which helps stabilize your mindset. My habit is to go all in at once. For example, 10,000U in one position, one market, one coin, is a full position. Going all in means using 1/3 of the funds for divided positions, altcoins 5 times and Bitcoin 10 times, entering and exiting with full positions. The way I enter is that overall, I have a relatively precise grasp of the entry points. If you all have stop-losses and then low leverage, it’s impossible to get liquidated. If your funds are tight or you are currently losing a lot or in debt, do not deposit too much money. Just deposit 1,000 or 2,000 and divide it into 3 parts, and slowly do it. Do not underestimate it; 1,000 is only 300 for one part. In this market, any amount counts; this is important.
Three suggestions on how to reduce losses:
The first point is, do not use high leverage. Altcoins above 5 times, Bitcoin above 10 times, are considered high leverage. Using high leverage is always a * road.
The second point is, do not do counter-trend trades. When the price rises, if you want to short, although there are short positions, you have to tell yourself, you cannot trade this trend. You would rather miss the whole round than touch the top or counter-trend buy.
The third point is, trading must be logical. Do not just look at the charts. This is the trading experience that Qiu Zong has shared with everyone today. Many times, you lose many profitable opportunities due to your doubts; you are not bold enough to try, to engage, to understand. How will you know the pros and cons if you do not take the first step? A warm cup of tea, a piece of advice; I am both a teacher and your chatty friend.
These days, I am preparing for the opening of a divine order!!!
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Uncertainty brings uncertainty brings uncertainty!!!
Important things must be said three times!!!
