Discipline and patience are the most scarce qualities in this market
Last week, I had tea with a 42-year-old senior from Hangzhou. In 2015, he entered the market with 150,000, and now his assets have exceeded 60 million. He owns three houses but drives an ordinary SUV, living extremely low-key. What shocked me the most is that he has never relied on insider information, nor has he been incredibly lucky; he just adheres to a few simple yet highly effective principles.
These principles resonate with my insights from seven years in this market. Today, I want to share them with you in my own words.
1. Rhythm is more important than price: Understand the footsteps of capital
When I first entered the cryptocurrency market, like most people, I only focused on price fluctuations. It wasn't until I experienced several pitfalls that I realized the price volatility is just a façade; the rhythm of capital is the essence.
That senior from Hangzhou said: 'A rapid rise and a slow fall indicate that the main force is accumulating.' This reminds me of Bitcoin's performance before the DeFi summer frenzy in 2020. At that time, Bitcoin slowly recovered from a low point, and each upward adjustment was very gentle, which is a characteristic of large funds quietly building positions.
On the contrary, a sharp drop and weak rebound often indicate that the main force is unloading. Many retail investors, seeing a price crash, want to catch the bottom, but end up buying halfway up the mountain. The real bottom is not formed by a sharp drop but is gradually ground out.
2. The truth of trading volume: a thermometer of market sentiment
In technical analysis, trading volume is the indicator that is least likely to deceive. However, many people have a superficial understanding of trading volume.
The senior pointed out: 'A single volume spike at the bottom is not credible; a continuous volume spike counts as a true bottom.' A single spike is often an illusion, possibly a one-time buy or sell by a big player. Only multiple sustained volume spikes indicate that market consensus is forming.
Regarding the judgment of tops, he has an unconventional view: 'High-volume at a high position does not necessarily mean the top will be reached immediately; a reduction in volume at the top is even more dangerous.' This is because high-volume at a top sometimes indicates that the market is still sprinting, while reduced volume indicates that market participation is declining and funds have begun to withdraw.
3. The essence of cryptocurrency trading is trading human hearts
When I first started trading, I was infatuated with various technical indicators and drew countless lines. Later, I realized that behind all technical indicators lies the manifestation of human nature.
That senior from Hangzhou put it more plainly: 'Trading cryptocurrency is about human hearts, not patterns.' The market is composed of people, and human emotions follow patterns. The cycle of greed and fear has never changed; only the forms of expression have changed.
I remember at the peak of the bull market in 2021, various altcoins doubled in a single day, and the community was filled with voices of 'making money while lying down.' That was the ultimate manifestation of greed. Then the bear market came, and Bitcoin plummeted from $69,000, with fear dominating the market. Only those who can identify the cycles of market sentiment can remain calm during mania and be greedy during panic.
4. 'Nothingness' is the highest realm: the wisdom of being in cash
In the cryptocurrency market, those who can survive through each cycle are the true winners.
That senior from Hangzhou views 'nothingness' as the highest realm: no desires, no fears, no attachments. This reminds me of Zhao Dong's experience; he once lost 9,000 bitcoins in a single day, with debts of 60 million, and during the hardest times had only 100,000 on him but was burdened with huge debts. Yet he did not give up; instead, he gradually rose again through OTC trading and ultimately repaid all his debts.
True trading experts understand the wisdom of being in cash. When the market trend is unclear, they choose to wait patiently rather than trade blindly.
5. Risk control is the foundation of survival
I have seen too many myths of getting rich overnight in the cryptocurrency market, as well as more tragedies of going to zero overnight. The cryptocurrency market is not a casino, but a battlefield that tests human nature.
That senior from Hangzhou has extremely strict capital management principles: the position size of a single trade should not exceed 10% of the total capital, and even with great certainty, it should not exceed 20%. Each trade must set a stop-loss, and the single loss must never exceed 5% of the principal.
He repeatedly emphasized: 'As long as the principal is there, opportunities are always there.' This statement is simple yet profound. What the cryptocurrency market lacks the least is opportunities; what it lacks is the capital and patience to wait for those opportunities.
6. The biggest opponent in trading is oneself
Over the years, I have gradually understood a truth: the biggest opponent in trading is oneself. Good news and bad news, pulling up or crashing down are merely external factors; what truly decides our fate are our own emotions, discipline, and mindset.
That senior from Hangzhou summarized it well: 'In the cryptocurrency market, winning is not about looking at the right person, but about being able to survive.'
Zhao Dong's experience perfectly illustrates this point. He experienced a roller coaster ride from a billion-dollar fortune to a debt of 60 million, yet he remained steadfast in the cryptocurrency market because he firmly believes that 'in the world of Bitcoin, what matters most is not when to get in, but to never get out.'
Final heartfelt words
The cryptocurrency market lacks geniuses, what it lacks are 'ordinary people' who can survive in the market for the long term. That big shot from Hangzhou accumulated wealth using the 'stupidest' method, not because he could always buy at the lowest point and sell at the highest point, but because he survived one cycle after another.
I have seen too many people enter this market with dreams of getting rich overnight, only to leave with disappointment. This market is never short of opportunities; what it lacks is the patience to wait for opportunities.
I hope my sharing can give you a new understanding of the market. The path has already been paved; the rest depends on your own choices.
Surviving is more important than anything else. Follow Ake for more first-hand information and precise points on cryptocurrency knowledge, becoming your navigation in the crypto world; learning is your greatest wealth!
