Understanding the Contrarian Nature of Trading: You Will Be Great at Cryptocurrency Trading!

With 8 years of contracts, survival is not about indicators, news, or trends, but rather about human nature and the game of trading. Only by understanding these can you stand undefeated.

Point 1 (Trading and Human Nature)

It is often said that trading goes against human nature. Most people sell when they are in profit, not being greedy, but hold on when they are losing, refusing to acknowledge. Reverse this mindset, and you become a master. Think: if I am in profit, I will hold on; if I don’t make 20%, I won’t sell. If I am losing, I will run, not being greedy, and if I lose 1%, I will run. Strictly adhering to this mindset can serve you for a lifetime.

Point 2 (Martingale Trading)

Martingale trading refers to: taking profit when you are winning, and averaging down when you are losing to lower the cost. Most market trends are primarily characterized by fluctuations, so Martingale trading has a high risk-reward ratio. Martingale is the only trading strategy that conforms to human nature, which is why many people like to use it. However, it can lead to issues in trending markets, often resulting in liquidation. Therefore, Martingale should definitely not be used. Instead, you can reverse it: when losing, you run; when winning, you keep adding to your position and continuously adjust your stop-loss. After perfecting this method, you will find that it resembles the pyramid averaging method of trading legend Jesse Livermore, who once shook the entire beautiful country.

Point 3 (Loss Aversion and Gambler's Fallacy)

The gambler's fallacy is well understood: wanting to recover losses when losing and wanting to continue when winning. I believe that most traders can avoid being greedy for profits and easily find satisfaction, but when they lose, they want to recover their losses; everyone feels this way. This behavior is referred to in the industry as being greedy for losses instead of profits. Reverse this, and you will be going against human nature. As long as you go against human nature in trading, you will quickly become a big player. Loss aversion occurs after frequent profits, where one is unwilling to accept a drawdown. This situation also aligns with human nature, so if you don't go against it, you won't make any money.

Conclusion

This contrarian approach is undoubtedly useful. Trading ability is a skill, not just knowledge; it’s not enough to just understand it, you must continuously practice and operate using experience. Therefore, merely learning is not enough; you must practice. How do you practice? Use your own real money to practice, constantly summarize experiences and mistakes. By frequently using this method a few times, you will earn money!