In fact, there are three major reasons for losing money in cryptocurrency trading:
1. Market Characteristics
1. High Volatility
Cryptocurrency + market price fluctuations are extremely severe. For example, Bitcoin can experience percentage changes of several tens or even higher within a short period. This high volatility makes it difficult for investors to accurately grasp the timing of buying and selling. If one buys at a high price, even a slight fluctuation could lead to significant losses.
Lack of effective regulation
Unlike traditional financial markets, the cryptocurrency market is mostly in a gray area of regulation or still lacks proper regulation. This leads to a lot of manipulation in the market. Some large players or institutions may control a significant amount of chips to raise or suppress prices, making it easy for ordinary investors to be misled and make erroneous investment decisions.
2. Investor's own factors
1. Lack of Knowledge Reserves
Many investors blindly enter the market without understanding the basic principles of cryptocurrency, the underlying blockchain technology, and the market operating mechanisms. For example, they may not be clear about the differences in mining algorithms among different cryptocurrencies, the development prospects of projects, and the technical feasibility, leading to investment decisions often based on following trends or misinformation.
Excessive greed and fear
Greed makes investors always expect to gain more profits when they see prices rise, and not take profits in a timely manner. For example, when the price of Bitcoin has already risen significantly, they still hesitate to sell, fantasizing that the price will continue to rise indefinitely. Fear, on the other hand, causes investors to panic and sell when the market falls. For instance, when negative news impacts the cryptocurrency market causing prices to drop, investors worry about further losses and hastily sell, often ending up selling at a low point.
Lack of Risk Control Awareness
Some investors invest large amounts of capital into the cryptocurrency market without setting reasonable stop-loss and take-profit points.
Once the market trend turns unfavorable, losses can quickly escalate. At the same time, many investors will frequently trade, attempting to profit from short-term price fluctuations, but frequent trading increases transaction costs and makes it easier to fall into a wrong trading rhythm.
3. External Environmental Factors
1. Macroeconomic and Policy Impact
Changes in the global macroeconomic situation can affect investors' demand for cryptocurrency. For instance, during periods of economic instability, while some may view cryptocurrency as a safe haven, if a crisis occurs in the overall financial market, cryptocurrency will also find it hard to stand alone. Furthermore, the policy attitudes of various governments towards cryptocurrency also have a significant impact on the market. When some countries implement strict restrictions or prohibitions, it can lead to a sharp decline in cryptocurrency prices.
Why do you never make money in the cryptocurrency circle?
The Bitcoin market is a battlefield of cognition
Lacking spirit (likes indulgence): Staying up late watching the market, fantasizing about getting rich overnight
Lacking spirit: Likes to chase after rises, wants to cut losses when prices fall
Lacking spirit: Emotional instability, likes to gamble, borrow, and takes big risks without rational investment
True big players view investment (spot) and speculation (contract) as tools for cultivation
The 9 Levels of Cryptocurrency Trading (You can find yourself in them)
Level 1: Gambler (Greed)
Behavior: All-in with 10-100x leverage, fantasizing "I'm going to make big profits"
Outcome: Late-night liquidation, sitting on the toilet or in bed or in front of the computer
Awakening Tip: "Non-professionals engaging in contracts, it is not an ATM, it is a money shredder"
Level 2: Indicator Slave (Foolish)
Behavior: Open long positions when MACD and other indicators show golden crosses, and open short positions when they show dead crosses
Outcome: Caught in a double kill, cursing the dealer's shamelessness
Awakening Tip: "The dealer specifically targets single technical players"
Level 3: Disciplined Leeks (Fear)
Behavior: Having a trading system and trading plan
Outcome: Take profit 10 times, withstand one loss, lose everything
Awakening Tip: "Unable to achieve unity of knowledge and action
Level 4: Contract Short-term God (Doubt)
Behavior: Bringing contracts and copy trading, harming one batch after another
Outcome: Luck and spirit greatly diminished
Awakening Tip: "Historical data is the script written by the dealers"
Level 5: Cycle Hunter (Bright)
Behavior: Bull market only sees upward trends, bear market only sees downward trends, save cash during bear markets, realize profits when the bull market rises excessively
Outcome: Catching large waves, assets continue to double
Awakening Tip: "Bitcoin's halving occurs every 4 years is a rule
Level 6: Zen Coin Holder (Calm)
Behavior: Leave spare cash in the spot wallet for two years without checking
Outcome: Survived the bull and bear markets, outperformed 99% of contract players
Awakening Tip: "The coin hoarders are the ultimate winners!"
Level 7: On-chain Prophet (Wise)
Behavior: Predicting market shifts based on large whale transfers
Outcome: Ambush in advance, reap the entire market trend
Awakening Tip: "On-chain data has a high win rate"
Level 8: Causal Player (Compassionate)
Behavior: Donate 2% of profits for charity when earning 10%
Outcome: Peace of mind, the more you give, the more you gain, balancing wealth and karma
Awakening Tip: "Virtue brings wealth"
Level 9: Digital Ranger (Short)
Behavior: Account balance is just a game score
Outcome: Transcendental, rejoicing in both rises and falls
Awakening Tip: "Life is a game, investment is also a game, why obsess over fluctuations"
Three slaps for contract players
1. Physical Withdrawal Method
Uninstall all contract exchanges + apps
Convert funds to BTC and transfer to cold wallet 1
Set up automatic dollar-cost averaging (10% of monthly salary)
2. Debt Liquidation Technique
Immediately stop using loans to pay loans
List all debts and negotiate for installments
Prioritize repaying online loans with an annual return of over 15%
·3. Energy Purification Technique!
Morning reading: "
"Silence Sutra+"
Ultimate Awakening
"When you no longer check Bitcoin prices daily
"When you no longer check Bitcoin prices daily
Instead, focus on working to improve cash flow,
You have truly begun to "earn coins".
This is the trading experience that Wen Ge shares with everyone today. Many times, because of your doubts, you lose many opportunities to make money. If you don't dare to boldly try, engage, and understand, how will you know the pros and cons? You must take the first step to know how to proceed next. A warm cup of tea, a word of advice, I am both a teacher and your talkative friend.
Meeting is fate, knowing is destiny. Wen Ge firmly believes that destiny brings people together across distances, while failing to meet is fate. The journey of investment is long, and temporary gains and losses are just the tip of the iceberg. One must understand that even the wisest can make mistakes, and those who are foolish can achieve success. No matter how emotions fluctuate, time will not stop for you. Pick up the frustrations in your heart and stand up to move forward.
Playing around in the cryptocurrency circle is essentially a contest between retail investors and whales. If you don't have cutting-edge news or first-hand information, you can only be cut!
The martial arts manual has been given to everyone, whether or not one can become famous in the martial world depends on oneself.
The current market is at a bottom-building phase. If you have no direction, remember to follow my lead, standing on the shoulders of giants can save you ten years of detours!
I have navigated the market for many years, deeply understanding the opportunities and traps within. If you are struggling with investments and feel dissatisfied with losses, leave 999 in the comments! Impermanence shares insights.
