In 2017, with a mindset of trying it out, I bought my first bitcoin for 1,000 RMB. At that time, the price of bitcoin was still hovering around a few thousand yuan, and I didn't expect it to rise much. However, within just a few months, the price of bitcoin soared, and my 1,000 RMB turned into tens of thousands.
Having tasted success, I began to delve into blockchain and digital currencies, gradually investing in mainstream currencies such as Ethereum and Litecoin. I learned to read candlestick charts, analyze market trends, and even participated in some early project private placements.
In 2018, the cryptocurrency market welcomed a bull market, and my assets also rose significantly. I seized the opportunity, decisively took action, cashed out part of my cryptocurrencies, and bought my first apartment in the city center.
Of course, the cryptocurrency market is not all smooth sailing. The bear market in 2019 caused me significant losses, but I did not give up; instead, I chose to continue learning and accumulating. I firmly believe that blockchain technology is the future trend, and the value of digital currency will ultimately return.
In 2020, the rise of DeFi (Decentralized Finance) reignited enthusiasm in the cryptocurrency market. I keenly captured this trend, actively participated in liquidity mining and staking, and reaped substantial rewards.
Now, I have achieved financial freedom, but I still maintain my love and exploration of blockchain technology. I am well aware that the cryptocurrency market is full of opportunities but also hides risks. Only by continuously learning and staying rational can one navigate the turbulent seas of cryptocurrencies.
My experience sharing:
Learning is fundamental: Understanding blockchain technology, the principles of digital currency, and market trends is a prerequisite for investment.
Rational investment: Do not blindly follow the crowd; invest according to your own risk tolerance.
Diversified investment: Do not bet all your funds on one project; diversifying investments can reduce risk.
Long-term holding: The digital currency market is highly volatile, and holding quality assets for the long term is more likely to yield substantial returns.
Stay calm: Do not let market emotions sway you; a calm mind is essential for making the right decisions.
The stories of becoming rich in the cryptocurrency market are certainly enviable, but the risks and sacrifices behind them cannot be ignored.
First, summarize the reasons for losing money; only by knowing why you lost can you know where you can make money.
1. Not using stop losses; short positions turning into mid-term, mid-term turning into long-term.
As a seasoned investment professional, we are often asked, 'What is the most common mistake investors make in the investment market?' My answer is not having immediate and rapid stop losses. The dual-direction investment system amplifies both profits and losses due to its leverage effect. The consequences of not stopping losses in a timely manner can often be extremely serious. The same goes for the cryptocurrency market; we all know that our most valuable asset in the cryptocurrency market is our investment capital. Capital is like ammunition on the battlefield; without it, failure is inevitable. We must constantly pay attention to protecting our capital and not let losses expand indefinitely. Many people hope, pray, and dream of finding a perfect trading method that can make money without stop losses. In short, no such perfect money-making method is possible in any field. Successful trading methods, like successful living, are not achieved by avoiding losses but by controlling the quality of losses.
Changing time frames is also a common mistake made by novices in the cryptocurrency market. The so-called change in time frames is also a form of not using stop losses or not admitting mistakes. It happens like this: a trader buys a contract aiming for good short-term gains, but the market does not perform as expected. The investor does not sell within the short-term time frame but decides to hold this contract and change it to mid-term or long-term investment. This is merely a reason to avoid stop losses. This method of changing time frames will inevitably lead to disaster, and using stop losses is the only way to prevent disaster.
2. Not paying attention to capital management; not controlling positions.
We use our hard-earned money to participate in cryptocurrency trading, which is not fundamentally different from investing in a convenience store near your home. If the small owner of the convenience store comes to ask you to invest in his small shop, how would you consider whether to invest? How much would you invest? Would you decide like you do in cryptocurrency trading without thinking? So-called capital management is precisely to solve the problems of whether to invest and how much to invest.
A suggestion for newcomers is to divide the capital into six parts, investing only one part at a time. As your experience gradually increases and your investment accuracy improves, slowly increase your position size. However, at no time should a single position exceed fifty percent of the total capital. Otherwise, if a mistake occurs, recovery will be very difficult. For example, if you have 100,000 RMB and you lose fifty percent in one trade, you will have only 50,000 left. To make back to 100,000 from 50,000, you will need to gain one hundred percent. Anyone with a basic understanding of math knows that gaining one hundred percent takes much longer than recovering fifty percent.
A survey in the American capital management community once found that the most important factor for funds that can win in the long term is not when or at what price they enter the market, but how much the fund has bought. This is the term often mentioned in the investment world: capital management. If you do not pay attention to capital management methods in cryptocurrency trading, you will definitely not reap the final victory.
Personal experience summary:
1. Plan your capital reasonably for cryptocurrency trading, ensuring you have food in hand and are not panicking!
2. Do not make emotional trades; do not let profits cloud your judgment and place orders blindly.
3. Develop a good trading plan and follow the market.
Large positions follow trends, small positions trade ranges, and you must control the ratio well. When trading against the market, use a small position and set a stop loss; when trading with the trend, you must hold firmly. There are no traders who don't make money, only operations that don't make money. Trading is a test of the correct mindset! I wish all trading friends can find their trading methods and earn steadily.
From hundreds of thousands to tens of millions! The following three points must be mastered ✅
Continuing to talk: If you achieve these three points in the cryptocurrency market, it will be hard to lose money again in the future!
Point 1: Do not look at market comments after placing an order.
There are always two voices in the market: one tells you that the market will fall; the other tells you that the market will rise. There will never be a day when the market unanimously expects a bullish or bearish trend. If that were the case, there would only be one type of person in the market: either everyone makes money or everyone loses money, which does not conform to market laws. Therefore, after placing an order, do not think about how others comment on the market's rise and fall, as conflicting opinions can shake your basis for placing orders and make you unsure whether to hold or exit early. Perhaps seeing comments from others who exit like you will give you confidence that you will definitely make a lot of money, but when opinions are inconsistent, you may feel particularly anxious and might make wrong judgments and decisions under such a tense mindset!
Real investors, after capturing trading signals, do not care about market changes but strictly follow their trading plans to complete the trade!
Point 2: Do not place an order without a stop loss and then lock in a loss.
Everyone knows that investing carries risks, and nothing is 100% certain. Therefore, when placing orders, strict stop losses must be established. Setting a stop loss requires great courage; many people do not want to give up, believing their direction is correct because admitting defeat will cause them to lose a lot of money. However, the market will never show you any sympathy. After making a wrong decision, you should immediately protect your principal. What’s even more troublesome is locking in positions; many people have experienced this. Locking in, unlocking, then locking again, and when the price falls, they hesitate to short, fearing that if it falls, it won’t rise again. When it rises, they hesitate to go long, worrying about what to do if it keeps rising. Locking positions is not just a simple financial loss; it is also a tremendous psychological burden and pain.
Point 3: Do not easily increase your position after placing an order.
Many people like to continuously increase their positions, rushing forward with orders. Remember not to add to your position after the direction reverses; wait for the next opportunity to establish a position. If you keep increasing your position, your stop loss will inevitably shift, and moving the stop loss will only increase your losses. Some may say that after the stop loss was hit, the currency moved in the direction they expected, but this requires patience to wait for the right entry point. Generally, hitting such stop losses feels unfair and frustrating. However, have you ever thought that such stop losses usually indicate that the entry point was not well grasped or that the stop loss was set inappropriately? Of course, if your trading plan is very comprehensive, appropriate position increases are feasible. However, when you realize your trading plan is flawed, you must strictly enforce your stop loss and exit.
Successful investors do not rely on luck; only by respecting the market, fearing the market, following the market, and strictly adhering to trading discipline can one survive. When trading, do not be one-sided. We must firmly grasp the opportunities to lose less and win more, discard the mentality of gain and loss, and remain undefeated in the market.
A thousand words are no match for a profitable trade; constant failures are no match for taking a bold leap! Frequent operations are not as good as precision in each trade, making every trade valuable. What you need to do is find me, and what I need to do is prove that my words are not empty. May our acquaintance begin with words, align with character, be bound by technology, last in kindness, and ultimately be based on integrity.
