Zhao Changpeng, 44, the founder of Binance, rose from obscurity to 'the richest Chinese' in just four years, with a net worth of $90 billion, ranking among the top ten richest people in the world.
According to (The Paper), in just four years since its establishment, Binance's daily trading volume reached $76 billion, with a valuation of $300 billion, and Zhao Changpeng holds 30% of the shares, surpassing Nongfu Spring's Zhong Shanshan in wealth.
Li Xiaolai, once a teacher at New Oriental English, cashed out 13.5 billion yuan with 100,000 bitcoins and became rich overnight.
According to Wikipedia, he invested 2,100 bitcoins in 2011 and later increased his holdings to 100,000 bitcoins, reaching a net worth of 7 billion yuan in 2018, earning the title of 'China's Bitcoin Billionaire.'
Guo Hongcai, known as 'Master Bao Er,' transformed from selling beef to a Bitcoin angel investor, dressed in T-shirts and slippers, challenging the formal attire of the financial world and turning his life around overnight.
Erik Finman, a 17-year-old high school dropout, invested $1,000 in Bitcoin given by his grandmother and now has a net worth in the nine figures, becoming a key investor in Silicon Valley cryptocurrency startups.
Liang Xi started with 1,000 yuan and used a high-leverage strategy to earn nearly 40 million yuan in a single market wave, becoming an overnight sensation in the crypto world. These wealth myths attract waves of young people into the crypto space like magnets.
Because of the firm belief that an investment of tens of thousands can yield thousands of times in return, under the temptation of high profits, some people stay up all night watching the market, chasing the dream of becoming rich overnight.
You can choose not to believe in technology, not to believe in market manipulators, not to believe in candlestick charts and moving averages, not to believe in BTC, thinking they are all frauds. You can also believe the opposite; these conceptual issues will not hinder your ability to make money.
But there is one thing you must understand, which is [risk]: what is risk, how to control risk, how to calculate risk, how to operate risk, how to withdraw risk, and how to survive.
You cannot earn money beyond your understanding. If you invest in a coin and its value doubles, you earn 100%; if you do a contract with 3x leverage, and earn 300%, where does that extra money come from? Do you know?
In contract trading, what you earn is actually the money from risk management, the money others lose and get liquidated is given to you; to get this money, first, you must not get liquidated.
In fact, viewing the market from the perspective of [risk] is completely different from how ordinary people view the market. It's like looking at a mountain from the bottom versus surveying it from the top; it’s not the same at all. For example, people who buy coins can hold their positions and endure losses, emphasizing patience, but in contract trading, if you hold your position and endure losses, most likely you won't survive the first three episodes.
Therefore, operations truly based on [risk] management are completely different from those based on [dreams]. In the trading market, dreaming comes with a cost, while those who manage [risk] strive to take that money for themselves.
So, do you want to be a [dreamer] or a [risk manager]? It depends on yourself. However, [dreamers] shouldn't play with contracts; engaging in contracts will shatter long-standing beautiful dreams within days, and waking up will be too quick.
Anyone who has made a lot of money will feel during the earning process: 'That time was almost like picking up money, but when your opportunity comes, that is to say: when it’s your turn to pick up money, you must be alive and have the capital to pick up the money.'
Yes, earning money from contracts is not difficult. After all, so many people are giving away money by getting liquidated. They are racing cars on the edge of a cliff, and you just need to wait at the bottom of the cliff and pick up some parts to get by.
The difficulty lies in the fact that it is inherently counterintuitive; basically, you have to go against the common people's thoughts about 'getting rich overnight.' Every time you are eager to increase your positions or open new ones, you need to think about what it means to 'go against human nature.'
If buying coins is like fishing, then doing contracts is like boxing. So I say that spending a lot of time in cash positions is very normal. Waiting, testing, retreating, trying again, waiting again... This is the norm for successful speculators.
In fact, strategies for a period of time are almost straightforward and can be said to be common knowledge.
For example, on February 14, 2022, many teams' operating strategies were: shorting most cryptocurrencies and timing a long position in BTC as a hedge.
There’s not much to explain, just think of yourself as a big shot in the crypto world and deduce from there. With such an absolutely profitable strategy, getting people to operate contracts, 80% of people still can’t make money.
And such a simple strategy actually contains countless details. For example, the simplest operating principles, why not directly short based on BTC, why shorting is much more conservative than going long and has a much shorter holding time, how to handle stop losses when shorting, how to short various technical currencies... The stop-loss plan for contracts needs to have a theory, which is worth studying; the value of stop-loss theory is at least worth half of what you invest in contracts. If you truly can't find it, you need to derive a complete set of theories yourself, which means a complete set of operations that you strictly execute, and there will always be opportunities.
Trading is like this; on the surface, it’s extremely simple—just buy and sell (a minute on stage), but countless people have done their homework behind the scenes (ten years of practice offstage). Overall, this is a profession. It’s not that novices can’t do it, but you must study and train seriously before you can truly step into the arena.
I often compare flying a plane with speculation. The reason is that these two are quite similar; if you force yourself to fly without knowing how, the result is disaster, and if you force yourself to speculate without knowing how, you will inevitably get liquidated.
Risk management and stop-loss management are akin to the most basic skills of flying a plane; having this ensures that you at least won't die.
Additionally, the methods of going long and short in contracts are completely different. This is entirely different from forex, which is the ratio of two currencies, while this is the ratio of cryptocurrency to money; these two are completely different things.
For example, I rarely see so many turns in long and short positions; the reason for the losses is that the way to operate short positions is actually different from that of long positions. The thinking is different; a short position usually only takes a slice, and short positions must be time-limited. However, long positions are usually limited in quantity, and sometimes they will add positions and consider holding. The entire approach is completely different. So actual speculation is a professional skill.
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