Although I haven't achieved the small targets some people have with 10,000, I am very content, stable, and dreaming that by the end of this year, my account will exceed 100 million, allowing me to earn more capital and money next year.
Maintain a good mindset when trading coins. Don't let your blood pressure surge during a big drop, and don't become overly proud during a big rise. It's important to secure profits.
When I first started trading coins, I was worried to the point of not sleeping well and waking up in the middle of the night frequently. Now I'm much more at ease.
In the end, it's not the skills that make it hard to make money, but practicing my own set of secrets. Just this statement excludes 70% of people.
In the coin market, achieving financial freedom and social mobility requires adhering to market rules. I rarely incur losses because I keep these 10 key points in mind! Simple and clear, mastering one point means mastering a skill!
Today, on a sunny day, I want to share simple rules for trading coins. There are only 10 iron rules, and I've kindly paired them with vivid graphical explanations. Mastering these 10 rules will be enough for you to establish yourself in the coin market and seek further development. The content is short but every sentence is useful, solid practical advice—hurry up and save it.
Summary: The core principle of avoiding losses in the coin market is a simple phrase—
"Don't be greedy for high returns, don't touch what you don't understand, and don't listen to strangers' persuasion."
By following this method, although you won't achieve mythical hundred-fold returns, you can steadily outperform 90% of the leeks.
Information filtering: Refuse to be a "news leek".
1. Look at the code, pay less attention to the story.
- Check project GitHub updates daily (real tech teams will frequently submit code).
- Treat Twitter influencers' calls and insider news from WeChat groups as gossip.
2. Mute the noise.
Ultimate mindset: Treat yourself as a Pi Yao.
1. Accumulate coins in bear markets, realize profits in bull markets.
- Gradually buy Bitcoin a year before its halving (refer to historical cycles).
- Gradually sell after Bitcoin breaks its previous high (e.g., $69,000 in June 2021).
2. Invest with spare money and forget the account password.
- Only invest money that won't affect your life if lost.
- After stocking coins, delete the exchange app; check the market once every six months.
Preparation for entering the coin market: pay tuition first, then enter the market.
1. Use small amounts to test the waters and feel the market's temperament.
Don't start by investing a large sum. First, take 500-1000 yuan to buy mainstream coins like Bitcoin and Ethereum to experience real price fluctuations.
Before losing all this money, I absolutely will not increase my position. It's like splashing around in shallow water before learning to swim to avoid jumping directly into deep water and drowning.
2. Learn basic knowledge to avoid the "get-rich-quick trap"
Spend 30 minutes every day understanding the basic concepts:
- What are blockchain, exchanges, and wallets?
- What do the terms "all-in," "contract," and "meme coins" mean in the coin market?
- Be wary of "group friends sharing profits" and "teachers leading trades"; 99% are scams.
3. Set discipline: post the rules on your computer.
Three memos that beginners must write:
① Never borrow money to trade coins.
② Do not invest more than 10% of total funds in a single trade.
③ Monitor the market for no more than 1 hour a day (to prevent emotional loss of control).
11 reasons for losing money in coin market investments. I wonder which ones you might have experienced?
1. Blindly choosing investment targets
2. Arbitrarily listening to news and entering the market.
3. Persistently invest in one coin.
4. Trade contracts.
5. Frequent trading.
6. Chasing highs and selling lows.
7. Not knowing how to cash out after making a profit.
8. Gambler's mentality in increasing positions.
9. Borrowing for investment
10. Issues in capital management
11. Weak water flows three thousand, not wanting to take a ladle, but wanting to take three thousand ladles.
Today, let's discuss how we can avoid the reasons for losing money mentioned above.
In the coin market, the first dilemma we face is how to choose valuable investment targets among thousands of options offered by exchanges.
I believe many novices or small investors choose investment targets blindly; some even pick based on how nice a certain letter looks; or they're influenced by a buzzworthy community or certain bloggers claiming a coin has great potential in specific sectors, and in a moment of enthusiasm, they rush in without a second thought. Some novices stubbornly place their hopes on a single target, choosing to stubbornly stick to it. Because they didn't escape when the market soared, they ended up trapped, feeling angry and dissatisfied with the market, leading them to oppose it. As long as the market drops, they keep increasing their positions, depleting their resources throughout the bear market, thus being deeply educated by the market, realizing it punishes all stubbornness. Sometimes, they may even encounter a coin they have held for years being delisted, as exchanges frequently list many new coins while delisting some old coins that lack value.
So points 1, 2, and 3 are all due to a lack of correct understanding of investment targets. First, we should not choose coins during the hype period of trending concepts; we should choose coins in the value return period.
The great investor Buffett's principle of value investing simply means finding the difference between value and price. First, it is necessary to understand value. Before investing in a stock, Buffett will conduct a thorough understanding of the company, including its financial status, income situation, future development potential, etc., and after a comprehensive evaluation, if satisfied, he will invest at a price lower than future value.
Our investment philosophy is the same as Buffett's value investing. Choose coins during their value return periods. First, conduct a comprehensive analysis from five aspects (fundamentals, technicals, news, capital, and policies), and then score them to retain those with high scores. Then use technical analysis to enter when the price is far below value, waiting for value to return.
Old Buffett is a practitioner of value investing principles, establishing his wealth empire based on a correct investment philosophy, combined with time and compound interest, becoming the world's richest person and influencing countless investors.
The difference between ordinary investors and professional investors lies in whether they understand the fundamental laws of things. The fundamental law of the financial market is that prices fluctuate around value.
New and small investors in the market completely lack the concept of value investing when choosing investment targets; most will choose to follow news and chase trends, thus becoming part of the 80% who lose money.
Professional investors understand the rules and act accordingly, choosing value investing and making the right investment decisions. By diligently progressing on the correct path, they naturally become the 20% who profit. How to avoid the reasons for losing money in points 4, 5, 6, and 7.
4. Trade contracts
5. Frequent trading.
6. Chasing highs and selling lows.
7. Not knowing how to cash out after making a profit; putting profits in your pocket.
A popular saying in contracts: Win and you get to hang out with beautiful models; lose and you go back to working the fields.
The high leverage characteristic of contracts amplifies human greed and gambling instincts infinitely. The only thought in one's mind is, 'I want financial freedom; the coin market can create my overnight wealth myth.'
High returns come with high risks. Many novices are unaware of the risks and traps of contracts. They might not even know what candlesticks are, following random operations in trading groups without knowing how to set stop-losses, reasonable leverage ratios, etc. When it’s time to stop-loss, they don’t, hoping to hold out, only to end up liquidated; when it’s time to take profits, they don’t understand how to do so, and ultimately their profits turn to losses.
Contracts are a rare opportunity. If you don't understand the technology, lack risk control awareness, and don't have a trading strategy to control your greed and fear, then no matter how others promote them, you should never touch contracts; otherwise, you'll fall into an abyss. So please cherish your life and stay away from contracts.
The coin market's 7X24 trading hours provide more time flexibility for frequent traders. Trading contracts and short-term trades require constant monitoring. You can't take your phone off your sight while eating, and you need to set an alarm to check the market at midnight. I've heard of such short-term traders who watch one-minute candlesticks in trading groups, at most five-minute ones; they are busy every day but end up losing all their money and damaging their health.
The purpose of frequent trading is to gain profits through high-frequency buying and selling. However, short-term markets are most easily manipulated by major players. Market news is often exploited by these players, resulting in chaotic trading levels and incorrect rhythms, leading to a series of subsequent problems.
Six essential skills for trading contracts; learning to make money is so easy!
In this unpredictable market, some people still manage to make money, while many friends do not perform as well. When they should short, they're afraid of a rise; when they should go long, they're afraid of a drop. This is human nature, and this is technology. Human nature is the greatest technology.
Sometimes you'll realize that what truly affects you is not the price, but the excessive imagination in your mind. Letting go may help you do better. In this market, there are plenty of teachers, analyses, and operational suggestions.
Investment guidelines: strictly adhere to profit-taking points, and heavy positions are strictly prohibited! When trading, first look at the trend, then at the points, and finally at the time. We emphasize understanding and observing the market. Regardless of whether the operation is right or wrong, there must be a reason for it. Operate with reasons, and review promptly for any mistakes; this is true investment.
1. Oscillation trading method: The market is mostly in an oscillating pattern. Buying low and selling high in the box during oscillation is the most basic method for stable profits. The indicators used are Bollinger Bands and box theory. The premise of success is to find resistance and support based on various technical indicators and patterns. The principle of the oscillation trading method is short-term buying and selling; do not be greedy!
2. Trading on breakouts: After a long period of consolidation, the market will ultimately choose a direction. Entering after the market breaks out is the fastest method for stable profits. You must have good breakout judgment ability, maintain a stable mindset, and avoid greed and fear.
3. Unidirectional trend trading: When the market breaks through a range, it usually chooses a direction. After the formation of a unidirectional trend, trading in the direction is an eternal truth. In every pullback or rebound, it presents an opportunity to enter the market, providing the best guarantee for stable profits! The technical indicators used are: candlesticks, moving averages, Bollinger Bands, Fibonacci retracement, trend lines! You must be proficient in mastering the above indicators.
4. Trading on resistance and support: When the market encounters significant resistance and support, it is often blocked or supported. Entering the market during these instances is a common method and one of the most prevalent methods for stable profits. The indicators used are trend lines, moving averages, Bollinger Bands, parabolic indicators, and Fibonacci retracement; accurate judgment of resistance and support is required.
5. Trading during pullbacks: After a significant rise or fall in the market, there will be a brief pullback or rebound. Seizing such opportunities is the easiest and simplest method for stable profits. The main indicators used are candlestick patterns, Fibonacci retracement trend-following methods, and it requires a very good market sense to accurately judge the peak or trough of the phase.
6. Time period trading: Generally, the morning and afternoon sessions have smaller fluctuations, making the market easier to grasp, suitable for investors with calm temperaments. The downside is that profit-taking takes longer, requiring sufficient patience. The evening and midnight sessions have more volatile fluctuations, allowing for rapid profits and multiple operational opportunities. It’s suitable for aggressive investors, but the downside is that the market is hard to grasp, leading to potential mistakes and requiring a high level of technical skill and judgment!
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