Without further ado, let’s share
Brother San | Trying again is not rational, it is a gamble
28-year-old professional trader, 3 years of cryptocurrency trading experience
The 28-year-old San Ge is known as the "return on investment assistant" in the cryptocurrency circle. He started to trade stocks at the age of 14 and cryptocurrency at the age of 25. He is good at both and has rich trading experience. In his Weibo introduction, he said that he is a Buddhist analyst who only teaches technology and does not shout orders. He also built his own knowledge planet and has his own group of fans, known as the "bankruptcy shelter group."
Brother San talked about his experiences in the cryptocurrency circle over the years.
As a professional trader, I faced a very realistic problem in early 2018. The A-share market entered a long bear market and I had to find another way to make a living. I was willing to open up a new track and happened to meet a college classmate who was a KOL in the cryptocurrency circle. Then we hit it off and rented a studio together to start officially getting involved in the cryptocurrency business.
The cryptocurrency market was also quite depressed at that time. Bitcoin fell from $20,000 to $6,000. I watched the market for a few days and found that the analysis tools for stocks were also applicable to the cryptocurrency market. I even felt like a dimensionality reduction attack. Although the cryptocurrency market is in a gray area, there are a variety of futures options and other tools that can be used for short selling. Moreover, BTC is a strong trend market. No matter whether it goes up or down, once the trend is formed, it is difficult to end in the short term.
The first time I made money was in April 2018, and the rising trend lasted for more than a month. The first transaction was to buy BTC at $6,500 and EOS at $4.2. From $6,500 to $9,200, I took profit. The first investment earned about a year's living expenses, which officially established my confidence in the long-term development of the cryptocurrency circle.
Due to the lack of reference in the cryptocurrency circle, I am a pure technical analyst. I use the Chaos Theory. I have also come into contact with other theories, but they all have their limitations. The Chaos Theory is more like a system rather than a simple technical analysis. I should be one of the first people to apply the Chaos Theory to the cryptocurrency circle. Of course, the cryptocurrency circle has its own scope of adaptation. I have made adaptive modifications based on the original Chaos Theory based on my trading experience, and even wrote it into a teaching aid. During the trading process, I also tried other mainstream currencies, such as EOS, XRP, ETH, etc., but as my trading awareness improved, I only did BTC in the later period.
In terms of trading style, I mainly trade spot trends, supplemented by contract trading. The purpose of contract trading is to earn coins rather than to earn excess profits, and the spot trend is held. The advantage of this strategy is strong stability. Once the trend is established, you can sit back and relax for a long time. The disadvantage is that when encountering volatile market conditions, you may face repeated stop losses.
There have been two particularly painful mistakes in recent years.
The first time was at the end of 2018, when BTC fell from $6,000 to $3,200 in a week, almost halving. At the time, I judged correctly that it would fall, and shorted at $5,800. However, I did not expect the decline to be so strong. I closed my short position at $4,800 and started trying to buy the bottom, but it ended up falling to $3,200.
This time, I lost about half of my capital in the process of continuous bottom-fishing. This was the first painful lesson that taught me not to easily bottom-fish or touch the top. This incident had a great impact on my later trading style, resulting in me basically not doing bottom-fishing or touch the top now, and I just trade on the right side honestly.
The second thing was that I was doing XRP in 2019. One night, BTC fell from $13,900 to $9,800, and my XRP contract position was liquidated overnight. In fact, the contract leverage was only 5X, but it still couldn't withstand the 20-point plunge of mainstream currencies. After this incident, I never touched any non-mainstream contracts again, and I focused on BTC from then on. Because only when you are familiar with a product can you know its rise and fall. A person's energy is limited, so it is more important to do well in one product than to do many things.
Let me tell you about a thrilling bottom-fishing event. Due to the first point I mentioned above, I basically don’t do bottom-fishing, but there was one exception, which was the night of Bitcoin’s “suicide” on March 12, 2020. I really bottom-fished that night, but the first purchase was at $7,800, and only $5,800 was left a few minutes later, so I bottom-fished for the second time, and only $3,800 was left the next day.
My cost was about $6,500, but BTC was only $3,800. I was in great pain. I unplugged the internet and took a day off. I deleted the trading app. After a week of pain, the price went back down. Of course, I kept brushing contracts to reduce costs. I thought of the worst-case scenario, which was not making any money in 2020.
The reason why I didn’t continue to buy at the bottom and chose to unplug the network cable was because my risk control standards did not allow me to try for the third time. Trying again would not be rational, but a gamble. In addition, I didn’t want to continue to buy at the bottom at that time, and there was also fear. After all, global risk assets were plummeting at that time, and it was still far from the bottom, so I was prepared to invest this little money and be prepared to lose it.
So, in fact, it is not easy to get it from then to now. I also reduced my position twice in the middle. The first time was around 13,000 US dollars, and the second time was around 19,000 US dollars. Now the number of BTC in my hand is only about 40% of that in March, and the rest has been held until now. I think it is impossible to hold on to it until now without thinking.
Now I will use the Chaos Theory to determine the buying and selling points to make waves, and the order opening frequency is maintained at about 15-20 orders a month. The profit in 2020 is about 10 times. Because the income of traders is nonlinear, there is no fixed salary.
I would like to advise all young people that Bitcoin is a high-risk asset and they should use less leverage and hold more spot assets.
