After ten years of ups and downs in the cryptocurrency world, I have personally experienced three bull-bear transitions, from an initial capital of 100,000 to achieving financial freedom today.

During my 8 years as a professional trader, I have experienced great ups and downs, from debt to financial freedom, a leap in class. I’ve made money, lost money, dealt with all sorts of things like shitcoins, ICOs, mining, and experienced countless pitfalls. It is said to be a game of bulls and bears, but it feels more like managing one's mindset, with surprises and disappointments, in a magical circle, a captivating place. I’ve summarized countless strategies and methods, and in the end, there is only one way to make money: simple, brutal, buy in a bear market, sell in a bull market, guaranteed profit.

Let me ask a question first: Do you fear losing money in trading? Is this a hard injury?

1. What to do if you are afraid of losing money?

The biggest difficulty in trading is not anything else, but fear of losing money!

So how do you overcome the habit of fearing loss?

The great philosopher Russell once said: The fastest way to overcome your fear is to do what you fear. Aren't you afraid of losing money? Then go practice losing money intentionally.

Step 1: Prepare $100

Step 2: Within a week, lose this $100. But it doesn't mean you should trade recklessly; you cannot blindly leverage, cannot blow your account, must strictly set stop losses, and must execute strictly according to the opportunities within your trading system.

Aren't you afraid of losing money? Don't you believe in your trading system?

Come on! The best way to eliminate fear is to face it, so just lose a lot! This $100 is what you use to lose; if $100 is not enough, come back for another $100. When you feel numb to losses, that’s when you succeed. At that time, you will understand what I often say: 'Losing money is normal; missing out is also normal; only by accepting this can making money also become your norm.'

Only through repeated losses and a constant battle with your own mindset can you undergo a transformation and conquer the fear of losing. From now on, whether holding a position or entering a trade, you will act decisively.

Let me tell you secretly, if you really do as I said above, the outcome is likely that it is impossible to lose all, and it may even double your capital.

So by that time, you will inevitably want to increase your capital investment, but when you go all in with 1000U or 10000U, you will find that your old problem comes back: still afraid of losing money, what to do?

2. What to do if you are still afraid of losing money after increasing your capital?

Question 1: What to do if you are still afraid of losing money?

Adjust your position to a suitable size

Question 2: What is a suitable size?

A position that allows you to sleep soundly

Question 3: When can I increase my position?

When you can still sleep soundly after increasing your investment

But please note! The deliberate practice method I just taught requires you to have your own trading system; if you don't even have a trading system, you have no right to be afraid of losing money!

What is a trading system? A trading system is a tool that allows you to achieve stable profits. It can help you mark key levels, discover entry signals, and find trading opportunities that can make you money. So it goes back to the point: as long as you have a stable trading system, when an opportunity arises within the system, just execute it; if you lose, you can always take revenge, do your part well, and leave the rest to the market; after all, in the end, profits will cover losses.

The technique to be shared in this article is: The essence of trading is to follow the big trend and go against the small trend!

1. What does it mean to follow the big trend and go against the small trend?

All the trades we make are essentially reversal trades, all against the trend!

The essence of trading is 'follow the big trend and go against the small trend'; here, the big refers to the trend in the larger cycle relative to the small cycle, and the small refers to the trend in the smaller cycle relative to the large cycle. It may sound convoluted, but no worries, a diagram makes it all clear (as shown in Figure 1).

（Figure 1）

As shown in Figure 1, this is an upward trend. Why is it said to be an upward trend? Because there are higher lows and higher highs. Actually, this is not a rigorous statement; a more rigorous way to say it is that this is a potential upward trend. If the next pullback does not break the previous low (as shown in Figure 2), which is the low that created the high, we can say this upward trend is officially established. But if we really wait for the blue arrow to indicate the end of this upward trend, wouldn’t that be too late? So trading is about expectations and betting. #Trump's dismissal of Fed Governor Cook

（Figure 2）

So we will actively look for long opportunities when a potential upward trend appears, which means we will enter a long position at the location of the blue circle (Figure 3), with the aim of aligning with segment A. However, small 'a' is clearly a downward trend in a small cycle and small level, that's right, so we indeed need to make a reversal on small 'a'.

（Figure 3）

Here, big A refers to the upward trend in the larger cycle compared to small a (Figure 4); while small a refers to the downward trend in the smaller level compared to big A (Figure 5). Because if we run to a smaller cycle to observe, we find that small a also definitely has lower lows and lower highs. #Chinese concept coins are collectively surging.

（Figure 4）

（Figure 5）

Follow the big trend and go against the small trend; the big one refers to big A, and the small one refers to small a. Let me say it again: follow the big trend and go against the small trend; the big is big A, and the small is small a.

On the contrary, take a decline as an example. As shown in Figure 4, this is a downward trend because there are lower lows and lower highs (Figure 6). Actually, this is not a rigorous statement; a more rigorous way to say it is that this is a potential downward trend. If the next pullback does not break the previous high, which is the high that created the low, we can say this downward trend is officially established. But if we really wait for the blue arrow to indicate the end of this downward trend, wouldn’t that be too late? Thus, trading is about expectations and betting. #Institutional funding layout for SOL.

（Figure 6）

So we will actively look for short opportunities when a potential downward trend appears, which means we will enter a short position at the location of the blue circle (Figure 7), with the aim of aligning with segment A. However, small 'a' is clearly an upward trend in a small cycle and small level, that's right, so we indeed need to make a reversal on small 'a'.

（Figure 7）

Here, big A refers to the downward trend in the larger cycle compared to small a (Figure 8); while small a refers to the upward trend in the smaller level compared to big A (Figure 9). Because if we run to a smaller cycle to observe, we find that small a also definitely has higher lows and higher highs.

（Figure 8）

（Figure 9）

Follow the big trend and go against the small trend; the big one refers to big A, and the small one refers to small a. Let me say it again: follow the big trend and go against the small trend; the big is this segment, the small is this segment.

So, all the trades we make are essentially reversal trades, all against the trend!

But you might say, wait! Didn’t you say not to make counter-trend trades? Those who make counter-trend trades should be expelled from the group, permanently blocked! Yes, I did say that, and I still hold that view. So what’s going on?

That is because if you have no concept of two cycles, namely the big and small cycles, and only focus on the current trend, always wanting to catch a top for a reversal in an upward trend, or wanting to catch a bottom for a reversal in a downward trend, that is going against the trend (Figure 10). Because the market has inertia, once a trend is formed, it will not change easily.

（Figure 10）

Good! Since you said that, and you also mentioned that small levels are indeed a trend, does that also conform to the rule that 'once a trend is formed, it will not change easily'? If so, why do you still want me to make reversals on it? Isn’t that contradictory?

2. Examples to illustrate

Next, let's explain in detail through two cases what is meant by 'the essence of trading is to follow the big trend and go against the small trend.'

Case study:

Let’s look at this stock's daily chart; it’s obvious this is a downward trend, right? But why do we hear that Zhang San is clearly...

How did he make money by going long on this stock? Because he is not focusing on the daily level decline (Figure 11), but likely on the 4H or 1H level rise.

（Figure 11）

If we open the 4-hour chart (Figure 12), he believes that the rebound at line 1 has not yet ended and will continue to rise for a while. In this context, he needs to make a reversal of the downward trend marked by the red circle at line 2. So he closely watches the position of line 2, looking for long opportunities!

（Figure 12）

When a very nice bottom formation appears, he directly enters long at market price, T1 sees the previous high, or even higher, (Figure 13) so, clearly a downward trend, but he indeed made money by going long, so what's wrong with that? Thus, the 4-hour chart could very well be his trend cycle, while the 1-hour chart could very well be his trading cycle. This is an example of going long in a daily declining trend.

（Figure 13）

Let's look at a BTC case; this is clearly an upward trend, but we have indeed heard that why did Zhang San make money by shorting? It’s possible that Zhang San is not focusing on this large upward trend on the daily level but rather on this decline at the 4-hour level (blue box) (Figure 14).

（Figure 14）

We switch to the 4-hour chart; when he believes the blue upward trend has finished, he will short here, and when a very nice signal candle appears, he will directly enter at market price (Figure 15).

（Figure 15）

T1 take profit will be placed at the previous low, T2 take profit will be pulled lower, and he will also make a profit. (Figure 16)

（Figure 16）

If you understood the above key points, I believe you should understand now:

ⅰ Why does the coach repeatedly emphasize that you must look at at least two cycles, namely the trend cycle and the trading cycle?

ⅱ Why does the coach repeatedly emphasize not to casually discuss going long or short with friends in groups, or to express any opinions? If you don't even know the level they are focusing on, and you are not on the same channel, what is there to talk about? Discussing trends without considering levels is nonsense!

ⅲ Additionally, you will understand why the coach repeatedly emphasizes not to make counter-trend trades, not to measure the trendline and think of going short when it breaks, then going long when it breaks above. Seeing a head and shoulders top, you want to short; seeing a head and shoulders bottom, you want to long…

If you are also a technical enthusiast, take a look at the chart below:

Trading is by no means as simple as just seeing a pattern or a line and entering at will.

Trends, trends! Read the charts, read the charts, read the charts! What level is the trend in front of me? What is its momentum like? Has it reached its end? Do its trend levels match my profit cycle? And so on and so forth, these are the key points we need to practice every day in the paid training camp!

Finally, keep this in mind:

The cryptocurrency world is a marathon; stability is far superior to quick wins. What is gained by luck will eventually be lost due to lack of skill. Only by integrating position management into instinct can one survive in a brutal market.

Remember: Only by being alive can you have the right to wait for the next turnaround.

No matter how diligent a fisherman is, he will not go out to sea to fish during a stormy season, but will carefully protect his fishing boat. This season will eventually pass, and sunny days will come! Follow me, and I’ll teach you to fish and how to fish. The door to the cryptocurrency world is always open; only by going with the trend can you have a life aligned with the trend. Save this and keep it in mind!

That’s all the content of this article, I hope it helps you. I am Lao Chen, see you next time.