If you are currently losing money in contracts and want to turn things around and recover your losses, then you must pay close attention to the following six points. As long as you follow them, making a profit won't be a problem!
1. You must learn to take profits and cut losses
The cryptocurrency market changes faster than you can flip a book. Therefore, you must learn the lesson of taking profits and cutting losses well. Taking profits simply means controlling your greed. A coin cannot keep rising endlessly, nor will it drop to the core of the Earth; there are cycles. Don't always feel like you've closed your positions too early and missed out on later profits. You need to understand that you can't earn all the money in the cryptocurrency market, but you can lose all the money in your account.
Stop-loss means learning to give up sunk costs. This is not easy; many people always think that if they hold on a bit longer, the market will turn around. But don’t be so naive! A mistake is a mistake; it must be acknowledged, just like when you make a mistake, you must stand up and take the punishment. Though it hurts to cut losses, it can truly protect your capital.
Two, do not trade frequently.
This is a big taboo! Don’t always think about making money on both sides; wake up! If you can make money on one side, be thankful. Moreover, trading frequently is also a hassle due to transaction fees. Low leverage is somewhat okay, but with high leverage, you lose 1 - 2 points of profit as soon as you open a position. You must ensure that this trade can make money, otherwise, you’re just giving money to the exchange.
Three, learn to watch the market without holding positions.
Sometimes the market is like seeing flowers in the fog; you simply can't understand it. At this time, don't open positions blindly. You might say that missing out on the market feels bad. So I ask you, which feels worse: missing out or losing money? Not understanding the market and opening positions blindly is no different than gambling. Trading is all about probability advantage; no one can accurately guess whether it will rise or fall, the market changes too quickly, and you can only roughly judge whether the probability of rising is greater or the probability of falling is greater.
Four, take it slow and steady.
Don't always think about making it big overnight. The crypto market is not a place for you to get rich overnight. For example, if your capital is 100 bucks, and you open a long position with 10 times leverage, your position is 1000 bucks. If it goes up one point, you make 10 bucks; if it goes up two points, that’s 20 bucks in hand, and you have your breakfast money. Nowadays, working in a factory earns only 15 bucks an hour. If you make three or four trades daily with a win rate of 60 - 70%, this life is much more comfortable than working in a factory.
Five, never heavily invest all at once.
Please remember, do not heavily invest all at once! If something unexpected happens, your capital will be gone. For example, if the market is performing well as you expected, then suddenly a significant piece of news comes out causing the market to drop sharply. If you haven't set a stop-loss, it could all be over. So, don't rush; you must operate with a light position, being steady is the way to go. The crypto market is not short on trends, nor opportunities; the next 10 to 20 years are there, don't be fooled by the illusions in front of you.
Six, it is important to unify knowledge and action.
This point is indeed not easy to achieve; even I sometimes find it hard. Human weaknesses are too difficult to overcome. I was once a novice in the crypto market, knowing nothing, opening positions blindly without any plan. After staying in the crypto space for a while, I realized that this place can truly change your destiny. But the prerequisite is that you must have a mindset far beyond ordinary people, the courage to take risks, the decisiveness to stop losses in time, and the determination to survive against all odds. Otherwise, you will never become part of that 1% of successful individuals.
The path of contracts in the crypto market is not easy, but as long as you can achieve these six points, profit is waiting for you ahead! Keep it up, crypto people!
