As someone who has been in the crypto market for many years, I've seen too many people shouting 'go with the flow' while losing their principal completely. Today, let me share some harsh truths: 99% of retail investors in the crypto world lose money, not because of poor skills, but because they succumb to the luck and greed within human nature.
1. The Fatal Cycle of Retail Investors: Earning is like working for others, losing is like starting a business
Have you ever had this experience?
Take a profit and run: Bitcoin just rose by 10%, quickly cash out for safety, only to miss out on the subsequent 100% increase;
Hanging on to losses: Ethereum fell below the support level, yet they comfort themselves with 'long-term investment', only to see their investment halved again and again.
This kind of operation, 'limited profit, unlimited loss', essentially uses tactical diligence to cover strategic laziness. I've seen a more extreme example: someone went long on BTC while simultaneously opening high-leverage short positions as a 'hedge', calling it 'risk control', but ended up getting hit on both sides—during market fluctuations, transaction fees and liquidation risks quickly consumed the capital.
The truth is: the market never rewards the genius of frequent trading, only the 'fool' who patiently waits.
Two, why can't you hold long positions? Cognitive biases are at play.
The root cause of retail investors not being able to hold profitable positions is treating floating profits as their own money. Once there is a 10% pullback, they feel 'lost' and are afraid that the cooked duck will fly away.
But how do the real big shots operate?
Dare to cut losses: if it breaks key support (such as the weekly EMA30), even if you lose 20%, exit immediately, because the next wave of the market needs capital to support it;
Take profits without hesitation: as long as the trend is not broken, just lie flat. Occasionally reducing positions is only to lower holding costs, not to completely liquidate.
Remember: the greatest profit in the crypto world comes from cycles, not intraday fluctuations. Over the past 5 years, the annualized return of low-frequency traders has been 7% higher than that of high-frequency traders (18.5% vs 11.4%).
Three, the key to breaking the game: use systems to counteract human nature, rather than relying on intuition.
The core of my trading system is just two points:
Stop-loss based on position, not amount.
Stop using 'fixed point stop-loss' methods that are counterintuitive! For example, when going long on BTC, set the stop-loss below the previous support area (e.g., $60,000), rather than stubbornly holding a 5% loss. Breaking a position means a judgment error; holding on stubbornly is like gambling with your life.
Position management is about hedging mentality, not calculating profits.
The further you are from the stop-loss point, the lighter your position (for example, building a position at 70,000 is half as light as building a position at 63,000);
Only when you are light enough to think 'if it drops, I'll add to my position, if it rises, I won't regret it' can you hold long positions.
Emphasizing a counterintuitive viewpoint: the 'stubbornness' of big shots and the 'stubbornness' of retail investors are fundamentally different—the former has unlimited cash flow to average down (like institutional dollar-cost averaging), while the latter is lying flat after all-in. Ordinary people should not learn!
Four, where is the wealth code hidden? A redefinition of profit.
If you keep staring at the account's floating profits and can't eat, it means your position is too heavy. What truly allows you to cross classes is to seize 1-2 big waves, like the market from 16,000 to 73,000 in 2023.
How to catch it?
Look less at the market, more at on-chain data and macro cycles (such as the Federal Reserve's interest rate policies);
Use grid tools to automatically take partial profits, but keep the base position intact.
As a certain big shot said: 'The best operation in a bull market is to lie flat, the worst operation is to be overly clever.'
The market specializes in treating all kinds of disobedience: when you feel 'this time is different', history is often repeating itself; when you believe 'technology will win', quantitative funds may have already used algorithms to cut leeks.
The only advantage of retail investors: time freedom and flexible decision-making. Lock in greed with systems, replace anxiety with patience, and you may wait for your cycle.
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