In the coin trading circle, I took a big fall: My personal experience!
Cryptocurrency + trading is truly thrilling and exciting. Although I am an experienced trader and have gone through many ups and downs, today's event is simply a nightmare! On my account, the profit and loss directly show -100%.
Why have I lost so much? I usually trade quite carefully, and risk management is in place, but this time, several mistakes compounded and left me in a terrible situation.
First, I invested in a coin with particularly high volatility, and it collapsed suddenly without any preparation.
Secondly, I used leverage too aggressively; originally, it was a small loss, but with leverage added, I was hurt badly.
Secondly, those large investors, the 'whales,' once they move, prices drop dramatically, and I can't handle it at all.
In the end, I was flustered and wanted to quickly recover the losses, but the more anxious I became, the more mistakes I made, resulting in a complete mess in my trading.
This lesson, I have memorized well.
Setting stop-losses must be done well. If I had set a stop-loss earlier, how could I have lost so much!
Leverage is something to be careful with; if used well, it can make money, but if not, it can liquidate you in an instant.
Market trends and the movements of those 'whales' must be monitored constantly; the market can change suddenly, and you need to adapt quickly.
When trading, emotions must be well controlled; if impulsive, it is easy to make wrong decisions and lose big money.
Although I stumbled this time, I am still not convinced; I must make a comeback. I will be more careful and prudent in my future trades, only doing trades I have confidence in, striving to improve my success rate.
When trading, risk management must come first; do not let emotions lead the way!
After ten years of struggling in digital currency, I summarized ten golden trading rules in the coin national contract trading system. The words are short but very valuable. If you want to survive long-term in the coin circle, this post must be thoroughly understood to help you avoid detours; I suggest you keep it.
Finally, I want to say that trading is an act against human nature; learn to think independently and do what you fear with reverse thinking. Fear will naturally disappear. When faced with a difficult choice, choose the one you dare not do, and your win rate will naturally increase.
When you bravely take this step, you are already halfway to success. Life is an excuse for the weak, luck is a humble word for the strong. What can truly change your fate is not opportunity, but seizing opportunity. It is our attitude that matters. Fate never favors anyone but always listens to those who live seriously. What do you think, friends?
How to stabilize profits in Bitcoin contracts, I have a high win rate using a MA5 moving average, top-secret techniques for Bitcoin contracts
For those who only play spot trading, it may seem like we contract players are gamblers, but I do not agree with that. I believe contracts themselves are a good tool that makes our trading more flexible. At least theoretically, both rises and falls can be profitable, which brings more opportunities than relying solely on rises for profit.
And there are many opportunities; this is very important for traders because people's time is limited. Having more opportunities in limited time is what everyone pursues, right? We are reluctant to leave the coin circle simply because there are many opportunities here. So personally, I do not resist contracts.
Of course, in actual operations, more coin friends experience losses on both sides, and various tragic stories often happen. One reason is that investment is always 1 flat, 2 gains, and 7 losses. Therefore, it is destined that most participants in any market will ultimately lose money.
Another reason is that the difficulty level of playing contracts is very high.
This further reduces the overall probability of making money. Therefore, to play contracts well, having a complete trading system is very important. For beginners just entering the market, I do not recommend them to play contracts, as it sets the bar too high for them.
For beginners, participating in contracts is both financially and physically taxing.
There is nothing inherently wrong with contracts, so we mainly need to think about how to play them well.
First, I divided my large positions into three: First, a living position; this means keeping a portion of money to guarantee basic living expenses. This is basically saving the most secure fixed deposit. This ensures that in extreme cases, if the other two positions explode, living conditions won't be significantly affected, allowing for normal life. Doing this gives me peace of mind, and I can invest spare money easily.
Second: Business position. Since I am also running other businesses, I will keep a certain amount of funds to cope with this. This part is mainly liquid cash, like storing some balance funds.
Third: Investment position. The investment position for me is basically allocated to the coin circle. I only trade coins, not stocks.
As for how to arrange these three position ratios, I won't elaborate here. Everyone's financial situation, personality, etc., is different, so how to allocate them is different. My own situation is just a reference for everyone.
Then the investment position can also be subdivided into smaller positions.
Current spot position is about 80%. Contract position is 20%.
For spot positions, because I personally am a bullish believer, I firmly believe there will still be a big bull market. So most of the time, I am fully invested in holding coins. Generally, I do not operate; I just occasionally switch some coins. For example, sometimes I change more BTC, and sometimes I hold more mainstream coins. The overall goal is that the BTC I can exchange in my account keeps increasing. Whether this part can make money purely depends on whether the future of the coin circle is good or bad; it is essentially buying knowledge.
For contract positions, I generally do not exceed 50% of total orders. The reason is simple: I need to ensure that even if I get liquidated, I still have a chance to play again. So basically, I won't go all-in; I take steady steps, seeking not for quick wins but calculating yearly profits.
At the same time, contract positions are also divided into trend positions and short-term positions. Trend positions mean that once established, I hold onto them from a relaxed mindset until I believe the trend has ended and then close them. The advantage of trend orders is that once they make a profit, it's easy to earn a significant amount, but they often go back and forth like a rollercoaster, resulting in wasted efforts. Moreover, for someone who enjoys trading, it lacks some fun, so I also need to configure a short-term position. Short-term positions are used for back-and-forth waves, but over the long term, profits from trend positions still outperform short-term ones. So overall, focusing on trends is less stressful and more likely to earn more.
The above is my personal simple position management. With such a configuration, there will basically be no real meaning of liquidation. I believe that so-called position management cannot be limited to a certain area; it must be expanded to the larger system of life to exert the greatest effect. Good position management directly determines that you will have a good mindset, and a good mindset is the beginning of success.
Position management is what I think is the most important point. The ultimate goal is for us to be able to live in this market long-term and ultimately laugh until the end. Of course, when it comes to opening orders, everyone is still most concerned about how to judge the market's rise and fall.
There are too many market analysis methods and too many indicators. So far, I think the most useful, simplest, and most beginner-friendly is the five-day line strategy+. Everyone can review the BTC trend; basically, if you follow the MA5 strictly without understanding anything, persist long-term, you won't lose money. The simplest strategy is: open long when the five-day line turns upward, hold as long as it doesn't break the five-day line, open short when it breaks, and don't close the short unless it stands back above the five-day line. If the five-day line is flat, clear the position and do not participate in trading; do not bet on direction. It's that simple and mindless; using 5x leverage, holding long-term will definitely yield a high win rate and capture most trend movements...
However, often the simplest is the hardest to achieve, because guessing tops and bottoms is always stimulating, and succeeding brings a greater sense of accomplishment. Including myself, I often let subjective judgments dominate, resulting in significant losses.
Five-day line strategy cannot allow people to catch the bottom or escape at the top, but at the same time can also avoid bottom fishing or selling halfway up the mountain. I think it is very practical and simple. Whether it is good or suitable for oneself, everyone can try it.
The following two charts are the BTC trend from 2019 to now, with the colored line representing the daily MA5.
Basically combining moving averages with candlesticks, and then combining MACD, Bollinger Bands, KDJ, big data from contracts, market sentiment, and other indicators as auxiliary verification can maintain a high accuracy rate for big directional judgments.
As for short-term direction, the sensitivity to the strength and weakness of the market requires a high level of perception, often referred to as market intuition, which primarily needs to be developed through long-term observation.
However, for playing contracts well, predicting rises and falls correctly is not the most important thing. Many players actually have a high win rate but work hard for decades; one order can bring them back to square one. So this leads to the issue of stop-loss.
Regarding stop-loss, it is very difficult for many people. I have also walked the path of being a novice, experiencing all the mentalities everyone has gone through, and many issues are still ongoing. First of all, stop-loss must exist. After opening an order, we cannot control how much profit we can make, but how much loss to stop-loss is something we can control. As the old saying goes, 'As long as the green mountains remain, one need not worry about firewood.' As long as the principal is there, there is hope. It is most regrettable to lose everything due to a wrong judgment. Although stop-losses reduce the principal, they also provide more opportunities. Adhering to stop-loss creates opportunities for oneself, thus increasing the possibility of returning to break even or even making a profit. If you always hold on to profitable orders and deadlock on losing ones, then in the end, making money will only be a process, while losing everything will be the result.
Based on my own experience, many times we do not want to stop-loss; often, we have already set stop-losses, but when the market actually comes, we retract the orders temporarily due to various complex emotions, missing the best stop-loss point, and ultimately getting stuck deeply and turning into a deadlock. Of course, there are also instances where not stopping losses results in recovery. Therefore, because of a few successful experiences, the illusion remains, ultimately leading to stop-loss becoming something that cannot be disciplined.
For this issue, there is only one solution: think of the stop-loss point before opening an order, then proceed. After opening, set it immediately. Then do not let a few erroneous stop-losses shake your confidence; persist long-term, and execute mechanically. Looking at it over a longer period, it will definitely be better than not having stop-losses. I have already practiced this with real money; losing money is the only way to progress. Standing on the shoulders of fellow losers, you will progress faster and lose less.
In the early stages, there may still be a few violations of discipline. My personal method is: for each violation, write a reflection of over 500 words, detailing my thoughts at that time. After writing a few times, you will find that each time is quite similar. Repeating this several times will help correct the behavior slowly.
In summary, regarding contracts, I believe that position management is the most important for most people. Good position management can bring us a good mindset; a good mindset is half of success.
Secondly, strictly execute the stop-loss plan, using the smallest loss to strive for potential high returns, protect the principal well. With many opportunities, seizing a major wave could lead to a turnaround.
Finally, a very important point is that after making a large profit in a certain period, remember to cash out in time. Especially when doing a dead long or dead short in one direction. Because investment markets are often full of joy and sorrow, danger often comes quietly and unexpectedly. Only cashing out is the best way to control drawdown.
Trading is like life; improving trading skills is also a process of cultivating one's character. The path of cultivation has no end. Thinking more, reflecting more, and reviewing more can lead to significant insights. On the trading journey, there is you, there is me, and may good fortune always be with us.
Some people turn around and earn a lot, while others lose everything.
Where there are tears, there are smiles; where there are losses, there are gains.
The market is like this!
Why are most people still in a state of loss during a bull market? The reasons are mainly the following three!
1. Choosing the wrong type of coin
In this round of the bull market, altcoins are not without hope, but among all targets, few can rise. When you do not understand the industry development and have insufficient awareness, you can only pick up leftovers. If you do not understand the coins you buy, even if you are lucky enough to buy ones that rise well, you have only bought a small amount.
Small positions; most of the funds are in losses.
2. Wrong timing for buying
Choosing the wrong coin and not understanding the fundamentals, but at least you can increase your winning rate and reduce the probability of losses through technical analysis. When you see a coin that is likely to rise well, you can also look at the chart to determine if you can still enter later, avoiding entering at a high.
3. Can buy but cannot sell
There are few coins that can rise, and some people may be lucky enough to encounter good rises. Suffering from not knowing how to sell, either running with a small profit or foolishly holding on when the market peaks, unable to seize good opportunities, not working hard to improve on a regular basis.
Strength to grasp.
1 year 13 times experience and investment strategy:
First principle: Choosing products and timing: Research good targets and clearly understand how to buy them.
The main indicators for buying good targets include several:
1. Fundamentals: Good fundamentals can be held long-term. At least, if you get stuck, it could be for 3-4 years, and in the next bull market, you could still earn several times.
2. Price, the buying price is not high and is at a relatively low level.
3. Timing; if there is a trend later, recovering costs will be faster. For example, if there is strong positive news later, buying in the later stage will be better than buying in the early stage, as money in the early stage may be tied up for 1-3 years, while buying in the later stage will quickly see the trend rise, and your money will quickly multiply.
Second principle: Clearly study top indicators; operate large positions based on the entire bull market cycle for low buying and high selling.
I have been using core bull market top indicators in my internal community.
When it breaks 40, pay special attention, for example, 9.7 is the market capitalization ratio of 1. If Bitcoin's market capitalization ratio is at the bull's peak, it is likely to break below the previous low of 36, hovering around 40 before a significant drop.
2. The ETH/BTC ratio, once it breaks 0.1, targets around 0.12, and it might even reach 0.14-0.2. When it breaks 0.1, pay close attention to the risk of a major pullback.
Third principle, coin-based: Coin-based is a very important core thought for me. I earn coins using a coin-based grid.
I prefer Bitcoin-based plus; although many people buy various altcoins, ultimately 96% of people cannot outperform those who only focus on Bitcoin. Therefore, my goal is to earn Bitcoin through market fluctuations, especially by selecting good products to earn Bitcoin. I use quantitative grids to open Bitcoin-based grid orders, which keeps my risks relatively low. If other coins rise relative to Bitcoin, I will sell them in batches to buy Bitcoin. When the market drops, I will sell Bitcoin to buy those coins (because Bitcoin generally drops less compared to others).
Fourth principle: Combine long and short trading systems: For example, my long position is in national currency, and I refuse to do short-term high selling and low buying.
I use quantitative grids for my short positions to help me automatically do high selling and low buying. Like the order below, the profits from grid high selling and low buying are similar to my holding profits.
Fifth principle: Patience, low-position ambush, hold coins patiently, do not chase highs.
You must have patience; valuable things will definitely rise, but sectors will rotate. It is impossible to catch every surging coin.
When the coins in hand are stagnant, and you want to sell to chase other coins, take some time to study the coins you bought: their team, business track, official website, community (Twitter, Instagram), etc.
Don't sell immediately after waiting for a long time just because it has risen a bit. As a result, after waiting so long, you miss out on its larger increase.
As the saying goes, holding coins is harder than holding chastity. The best way to hold coins is actually to open a grid, especially a coin-based grid. This way, you can outperform the national currency, and the risk is relatively low.
Sixth principle: Your trading rhythm and trading cycle perspective must be thought out.
Many people look at the market every day but don't know what cycle they should be observing. If looking at minute charts, it can result in constant anxiety and poor sleep.
Generally, first look at the larger cycle, then go down to smaller cycles.
If you are a long-term holder, look more at weekly charts, then daily, and four-hour charts. Occasionally check hourly and 30-minute charts, mainly to determine buying timing. Generally, avoid looking at 1-minute and 5-minute charts, as I made significant mistakes in the past by frequently checking them and becoming anxious. Short-term trading probabilities are increasingly low; many people can't even make profits, let alone increase their holdings.
Looking at the K-line time cycle determines the maximum holding time: 1 minute, several tens of minutes; 5 minutes, several hours; 15 minutes, two days; 1 hour, several days; 4 hours, several weeks.
Still the same saying, if you don't know what to do in a bull market, click on my avatar, follow me, and I will share the planning of spot trading and contract secrets for free.
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