A few days ago, someone asked: "How to mix in the crypto circle with 5,000 yuan?"
I said: "Let’s do Ethereum contract grid trading, putting the range between 1900-2800U." I said this because I am indeed doing it, based on the current market situation, I believe the likelihood of Ethereum crashing below the liquidation line is very low (but not impossible). For 5,000 yuan, I think this is a suggestion that carries certain risks but is relatively suitable. As a result, I got attacked: some told me to "be a person," some said "the risk is huge," some called me "bad," and others said "a position this small doesn’t mean anything."
I dare say that those who say these things must be losers, definitely people with little money. Why? I previously wrote an article specifically stating: making money requires separating emotions. In fact, whether making money or doing anything, to achieve good results, you must separate emotions. Yet people are influenced by emotions in every aspect. Why can dollar-cost averaging make money? The essence is to abandon the market's influence on emotions. These people are emotional giants, leading with their emotions, not providing any specific strategies, just enjoying criticizing others. There’s no reason, they are simply unhappy with their lives, have too much time, and lack a sense of existence, so they need to vent their emotions.
I’m not writing this for emotional retaliation, but to state some facts. You see some people making a lot of money, right? They take large positions and earn absolute returns. But when you look at the return rate, it’s actually low: earning 5 points on 2 million is 100,000, which is a lot, but in the crypto circle, this return rate is very low. You need to compare the return rates horizontally because you will definitely have drawdowns; if you earn 5 points, a drawdown might be 10 points. If you only look at 100,000, you’ll certainly think it’s impressive. It’s the large principal, not the skill. Making money is the result of market luck.
I've been doing this grid trading for 9 days, with a return rate of 11.27%. Linearly extrapolated, that’s a monthly return of 30%. Is that little? Some say, "the principal is too small," but we need to look at the return rate. The market can handle your capital; if you have 1 million or 10 million to do grid trading, you can also achieve a 30% return rate. But first, you don't have that money, and you won't engage in it. So what I’m talking about is a plan for 5,000 yuan. As long as it's not a one-sided drop, both volatility and rising markets can make money; you could say 70% of market conditions are profitable. A 30% crash will wipe out your account, but that’s only 5,000 yuan. At the same time, your spot trading is also losing; it’s not just this loss. Spot trading can recover, but 5,000 yuan doesn’t mean much to your life. If you really lose it, so what? You have to look at the problem comprehensively.
Is the Binance wallet Alpha points activity making much profit now? Actually not much; it might just be 3,000-5,000 yuan in a month, but the cost of investment in a month is 900 yuan. This 900 yuan is a sunk cost, once invested it’s gone. However, you need to look at the absolute return rate, which many people overlook. I don’t understand why they overlook it. I have set up 7 accounts; one account earns 2,000, which totals 14,000 in returns. If I buy assets with this 14,000, doesn’t it increase by 14,000? Using 14,000 for virtual initial offerings, in 30 days it turns back to 24,000. If I can play Virtual for 3 months, 24,000 turns into 96,000. If I lose, I just lose 14,000; what impact does that have on the principal?
The grid earned 130U, and I can buy Virtual points for another 2 days. This 130U will become 260U after a month. Some people just complain out of pure emotional dissatisfaction, criticizing for the sake of criticizing. If you can’t accept any risk and can’t let go of a bit of security, then what are you doing in the financial market? Honestly working is the safest.
Today, let’s specifically discuss which has a bigger risk: contracts or spot trading. Many people haven’t thought deeply about this and will definitely say contracts are riskier. Actually, contracts are just hard to make money, not that they are high risk. For most people, contracts don’t carry a big risk. This is what I say to those who can think logically, excluding gamblers.
In reality, how many people go bankrupt from gambling compared to those who go bankrupt from entrepreneurship? Definitely more from entrepreneurship. Very few people will gamble away their family wealth, but many people will go all in on business. In reality, are there more people making money from working and entrepreneurship, or from gambling? Definitely from working and entrepreneurship. Profits are linked to risks; very few make money from gambling, and the overall risk is lower; entrepreneurship and work have higher profits, thus higher risks. Many people have never thought about this overall risk issue. Risks occur because they are unaware of the risks, only listening to others and then making emotional judgments.
Playing contracts is the same. Are there more people losing money in contracts or in spot trading? Definitely in contracts. But do contracts lose more money or spot trading? Spot trading. Because normal people are not professionals speculating; they play with a little money in contracts and buy in spot trading waiting for a bull market. If the altcoins keep dropping, when the bull market comes, they buy at the peak, and if it doesn’t come, they keep averaging down, the process of losing is numbing. So when spot trading loses, it’s a lot. If you blow up a contract once, you’ll curse: "shit, I won't do this again," and you might understand it after just one time. Losing all your money in contracts doesn’t amount to much, while the process of spot trading dropping is numbing; you might lose even more. I have friends who lost millions in spot trading, while those in contracts only lose tens of thousands.
Many people have played both contracts and spot trading; they might lose tens of thousands in contracts and think it's too difficult and stop playing; spot trading tells you, "buy right and you’ll profit in a bull market," and so they keep buying, but when the bull market comes, it just doesn’t rise. You might keep averaging down until you run out of money and lose everything. So, we need to look at problems dialectically; risks always exist; to make money, you have to accept risks, not avoid or attack them. Risks are a good thing as they increase your antifragility. To gain profits in risks, your assets will grow. As long as there’s some depth of thought, and you don’t just follow the crowd, the results will be completely different.
Yesterday someone commented, "It’s impossible to make money now." How can it be impossible to make money? Aren't we always making money? Aren't other people always making money? Why do they insist on saying, "I want to earn ten or a hundred times" right from the start? That's delusional, not making money. For example, virtual initial offerings and wallet point activities, aren’t they money? Many people say, "I can’t do it," but it’s simple: spend money to ask someone else, pay for it.
Many people extremely resist paying, thinking "they will be harvested as chives." But how do chives grow without being harvested? What happens if you cut some? Why should you make money and not be harvested? Shouldn't you take some risks? If you see people asking for money and feel uncomfortable, saying, "people are not what they used to be," then you are being swept up by emotions. So first, don’t make money; clear your emotions, and think again when you are stable. Don’t you have to pay for goods, buy equipment, and sell them to make money?
The root cause is that many people are emotionally driven, not results and profit-driven.
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