If you are in a losing position with your contract and you want to turn losses into profits, then you should carefully read this article and follow the 6 rules of self-discipline below:
1. Learn to take profits and cut losses
The market changes rapidly, and you must learn to take profits and cut losses. This is not difficult; taking profits controls your greed. A cryptocurrency will not keep rising indefinitely, nor will it keep falling; everything has a cycle. Therefore, taking profits becomes particularly important. Don't always worry about closing positions too early and missing out on future profits! You need to remember that in the crypto world, you can never earn all the money, but your account can lose it all. Cutting losses means giving up on sunk costs, which is also difficult. Don’t always think that if you hold on, the market will reverse in the next second. Never think like that. Although it hurts to cut losses, it can indeed save your life.
2. Do not trade frequently
In the crypto world, it is a big taboo to always think about making profits from both long and short positions. Wake up! Very few people can do this. Be satisfied if you can make a profit on one side. Another point is the transaction fees; it's manageable with low leverage, but it gets painful with high leverage. Every time you open a position, you lose 1-2 points in profits. You must ensure that this trade can make money; otherwise, it makes no sense to open that trade, as all your earnings will go to the market maker as fees!
3. Learn to be in cash
When you don’t understand the market, do not blindly open a position. You might say, 'It’s painful to miss opportunities.' But I want to ask you, is it more painful to 'miss out' or to 'lose money'? Not understanding the market and blindly opening a position is like opening a blind box! Trading is about having a probabilistic advantage; no one can accurately predict whether it will go up or down. (Of course, you can use hedging to reduce directional errors.) The market changes too quickly; you can only say that it is highly likely to go up or down.
4. Progress gradually
Don’t always think that you can become rich overnight; you can’t rush to eat hot tofu! The crypto world won’t make you rich instantly. For example, if you use 100 capital to open a position with 10x leverage, the position becomes 1000. If it rises by one point, you earn 10; if it rises by two points, you earn 20. That’s enough for a breakfast, right? Now, working in a factory for an hour earns 15. If you open three to four trades a day and maintain a win rate of 60-70%, isn’t that more comfortable than working in a factory?
5. Never over-leverage
Absolutely do not over-leverage. If something unexpected happens, you are done. For example, if the market is expected to rise but suddenly a heavy piece of news comes out and it plummets, and you happen to not have set a stop-loss, then you are finished! So do not rush; definitely trade lightly and prioritize stability. The crypto world does not lack opportunities; they will always be there, at least for the next 10-20 years. So do not be misled by the illusions in front of you!
6. Know the unity of knowledge and action
This point is indeed quite difficult, including for me sometimes; it is hard to grasp the weaknesses of human nature! I used to be a novice, and I didn’t understand many of these fundamental issues at first, blindly opening positions without a plan! After being in the industry for a long time, you will realize that the crypto world can really change your destiny! The premise is that you need to have a mindset that surpasses others, the courage to take risks, the decisiveness to cut losses in time, and the determination to survive at all costs! Otherwise, you will never become one of the lucky few!
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