Two ways for ordinary people in the cryptocurrency circle to complete the accumulation of original capital:
1. Find tenfold coins, hundredfold coins, and compound interest.
2. Contracts, small bets for big gains
Trading is not a game of guessing price movements, but a replicable discipline system. Those who earn consistently all practice the same core logic: stop loss when wrong, hold when right, exchanging countless small losses for one large profit. Master these five core steps, and you'll find that making money is never about luck.
One, follow the trend: use a moving average to delineate long and short, do not oppose the trend;
The simplest trend judgment method: find a moving average (such as the 20-day line or 60-day line), only go long when the price is above the moving average, and only go short when it is below.
When the moving average is upward, even if there is a pullback, remain steadfast in going long, ignoring short-term fluctuations;
When the moving average is downward, avoid going long even in the face of tempting rebounds, to prevent standing against the trend.
In 2021, Bitcoin rose from 30,000 to 69,000, and the 20-day line was always inclined upwards, which is a typical bullish trend. If you go short against the trend during a pullback, even if you are right 10 times, one liquidation will wipe out all profits.
Two, opening a position: be 'stingy' when testing positions, be 'greedy' with the profit-loss ratio;
Follow the big trend, counter the small trend: open positions in the early stages of a trend or at the bottom, the entry point must satisfy 'small stop loss, large profit space'—
For example, when the trend is upward, wait for the price to pull back to the support level (such as the 5-day moving average, previous lows) before trying a position. At this point, set the stop loss below the support level, and once it breaks, accept the loss, keeping it manageable;
If the trend is correct, the space from the support level to the next resistance level must be at least three times the stop loss range (for example, stop loss at 1%, potential profit at over 3%).
When testing positions, first use 10%-20% of the capital to 'explore the road', don't go all in right away. In 2023, Ethereum pulled back from 1,800 USD to 1,600 USD (20-day line support), at this time try to go long, set stop loss at 1,550 USD (3% stop loss), aiming for 2,000 USD (25% profit), a profit-loss ratio of 8:1, this is a quality opening opportunity.
Three, stop loss: key points must be cut off when broken, there is no 'wait a little longer';
Stop loss is not a choice, it's a lifeline;
Set the stop loss before opening a position (such as at the support level, moving average, previous low), and once the price falls below it, immediately close the position, even if there is a rebound afterwards, do not regret;
You must never hold onto a position or average down losses (for example, adding positions after a drop to lower the cost), as this is the culprit that turns small losses into liquidation.
When LUNA collapsed from 100 USD in 2022, countless people kept adding positions at 50 USD and 20 USD, fantasizing about a rebound, but once the stop loss line was broken, it broke again and again, ultimately going to zero. Remember: the pain of stop loss is temporary, while the consequences of holding positions are fatal.
Four, adding positions: only add when there are floating profits, let profits snowball;
Adding positions is the core of making big money, but it must meet one prerequisite: existing positions are profitable (add positions with floating profits).
When the trend is upward, after a price increase, if it pulls back to the support level (such as the 10-day moving average, 30% pullback position), add positions at this time, while moving the stop loss line to the new support level (for example, below the added position);
Each time you add positions, the size should be smaller than the base position (for example, base position 30%, first addition 20%, second addition 10%), to avoid excessive risk in a single addition.
Example: Bitcoin rises from 20,000 to 30,000 (50% profit on the base position), adds positions at 27,000 with a stop loss at 25,000 (higher than the base position stop loss), preserving the base position profit while amplifying returns. If it continues to rise to 40,000, wait for a pullback to add positions, continuously moving the stop loss to let profits run.
Five, take profit: Don't 'bargain' with the trend, wait for signals to exit;
The key to making big money is 'not easily taking profits';
Don't panic and close positions just because of profit pullbacks; 80% of profits in a bull market come from 20% of the holding time; exiting halfway will only cause you to miss the main upward wave;
Take profit either wait for 'top signals' (such as breaking long-term moving averages, experiencing volume decline), or exit all at once (right-side trading must accept profit pullbacks), don't think about selling at the highest point.
In 2021, Ethereum rose from 2,000 USD to 4,000 USD, with multiple pullbacks of 10%-20% along the way, but as long as the 20-day line was not broken, one should hold firmly. Many people took profits at 3,000 USD, only to see it rise to 4,000 USD later, regretting it—real big trends require patience to exchange for returns.
Ultimate secret: discipline is more important than skill;
Every aspect of trading is not difficult to understand, but 90% of people lose because they 'cannot do it':
Knowing you need to stop loss, yet always fantasizing about a rebound;
Knowing you need to follow the trend, yet cannot help but try to catch the bottom and top;
Knowing you need to add positions, yet feeling fear during profits and not daring to add.
If you can strictly adhere to discipline in every operation—hesitating when it's time to stop loss, being steadfast when holding positions, and daring to act when adding positions—making money will become a natural outcome. Just like the BCH trend in 2018, some people rolled from 50,000 to 3 million through strict trend tracking and position-adding discipline, while more people lost because they 'understood the logic but couldn't do it.'
Remember: trading is not about who has a higher IQ, but about who can control their hands. Repeating and adhering to simple principles will naturally yield the returns you deserve from the market.
Almost all successful traders have fallen into the abyss, been halved, liquidated, or even burdened with debt before enlightenment.
You must fall to a low point you have never experienced to step onto the peak you have reached; when water reaches a dead end, it's scenery; when a person reaches a dead end, it's a chance for survival.
Dedicated to those who still do not give up in this circle.
------Lu Xun
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