If you are a newcomer to the cryptocurrency world or someone who wants to enter, let me give you a piece of advice: run fast, don't look back.
The cryptocurrency market today is no longer what it used to be. The so-called concept of decentralization has long been centralized by major players. Now, it's not just about big players harvesting small investors; it's also about larger players taking advantage of smaller ones. Every year there are new ways to exploit, leaving you in the dark. If you really want to invest, it might be better to invest in gold or buy the Nasdaq, which is a long-term upward investment.
Of course, if you still want to stubbornly enter the cryptocurrency world, you can carefully read this article. At the same time, this is also a summary of my journey.
I haven't been in the market long, only about three years. I cannot compare to those who have already achieved freedom (in two forms: financial freedom and another...) and have not experienced the era when cryptocurrency could earn money effortlessly. BTC has always been at new highs, and ETH has also been at new highs; however, the number of people making money is decreasing, while the number of liquidations is increasing. In contrast, the good market was when Bitcoin was still a few thousand to ten thousand; the specific reasons will not be discussed here, as they are all in the past. This article may also lean more towards the current environment of the cryptocurrency space rather than lamenting the past.
I will summarize my journey over the past three years and the paths of growth, hoping it will be useful to you. The article is based on contracts since I have traded contracts the most. I will specifically point out other spot trading or robots when mentioned.
Stage One: Beginner's Protection Period
No matter where you learned about the cryptocurrency space, regardless of your expectations for what will happen in the future before entering the market, or how many tutorials and insights you have seen prior, when you decide to step in here, you will definitely feel excited and thrilled. You might go all-in directly or choose to use small positions for compounding, likely based on the homework you have done before. You might initially invest 100u, 1,000u, 10,000u, or even more, or you might want to replicate the myth of the 10u war god...
The moment you press the open position button, you will see red or green numbers fluctuating. Depending on the size of your position, you might earn 1u in one go, 100u in another, or even 1000u. Of course, you can also lose corresponding amounts in the opposite direction. But no matter what, please remember your feelings at this moment, as they will be very useful for you in the future: at this moment, you already have a concept of money, although this concept is very vague, and it will always just be a string of codes before withdrawal. However, the thrill in your heart is real. You can feel delighted about a profit of 100u, or feel gloomy about a loss of 1u, or remain indifferent to a loss of 1000u, or be nonchalant about a profit of 10000u... These are all your expectations for profit-taking and stop-loss for each future trade: if you think earning 10u on a trade makes you very happy, then you will set 10u as your profit benchmark, and when you reach a profit of 10u, you can prepare to take profit; if you think losing 1u on a trade brings you sorrow, then you will set -1u as your stop-loss point, and prepare to stop loss when you reach -1u. Of course, this is just an example, and as your capital increases, your concept of money will change accordingly, and you can reassess at that time.
And why is this chapter titled 'Beginner's Protection Period'? It is because even if you blow up, you won't blow up too much at once, unless you go all-in selling your house for the first time. Such people either have poor judgment or are gamblers, and there's no need to regret their demise. Most people just entering the market will definitely only invest a small amount of money. Here, small money refers to the proportion of your total capital that you can accept, not literally 10u small money.
Moreover, at this stage, you have not developed any bad habits. You only use a simple high-altitude low-multi strategy to trade. Although this method does not have a high win rate, it can often get it right by chance. However, if you encounter an extreme market condition once, this method can easily lead to continuous losses. Fortunately, extreme market conditions occur only a few times a year, and statistically, you won't be unlucky just as you enter the market during an extreme situation.
My novice period actually occurred during a market that had been fluctuating for about half a year. At that time, I happened to be trading swings and managed to catch almost every segment correctly. Although I used low leverage and made small profits each time, I indeed built up slowly through compounding until an extreme market situation left me with nothing. This leads us to the second chapter.
Stage Two: First Liquidation
My first liquidation did not occur due to a black swan event or a market crash; rather, it was during a market rally (the big surge at the end of 2024 when I went short). I had been trading in swings, and as my capital increased, my profits grew from 10u per trade to 200u. However, my concept of money had not yet changed; I still considered a loss of 100u to be unacceptable. Previously, I had experiences where I managed to recover from losses, thinking this trade was just a bit higher than usual. I thought I could hold on, and that day Bitcoin broke new highs, reaching 100,000. Although I had not yet reached the liquidation threshold, my mindset had already collapsed: my initial stop-loss of 300u, which was a bit painful but acceptable, turned into a stop-loss of 3000u, which would cut more than half of my position. In this situation, I made the operation that led to my first liquidation, causing all my profits from the past year and a half to go to waste: I closed my short position and chased after the long position. At this point, Bitcoin had reached the 100,000 mark. Whether it was the candlestick chart or the news, everything made me believe it could go directly to 110,000, and I could recover the losses from my short position and even make a profit. In fact, the market confirmed my thoughts; in the blink of an eye, Bitcoin had reached 104,000, surpassing half of my target. While I was reveling in my wise decision, suddenly a red candle appeared before my eyes, and within hours, Bitcoin returned to 90,000. During this time, I became numb. As the profits from my long position dwindled and turned into losses, I no longer knew whether I should wait for a rebound or open a short position. When I thought about stopping my loss, I found it hard to act because I knew that closing my position would undoubtedly lead to greater losses from the combination of the long and previous short. So I thought I could hold on. Eventually, I received an email. At that moment, I really wanted to restart. Although my initial capital was only a few hundred u, the time cost and effort spent were priceless. Although I actually only lost a few hundred u, I still couldn't accept all of this. Afterwards, I learned a term called 'sunk cost,' and this liquidation was merely one of my several liquidations.
After reviewing, it is nothing more than the usual talk about stop-loss and take-profit. But why do so many people, including myself at that time, fail to do such a simple thing? It comes down to emotions. You think stop-loss is a painful thing, but I now believe stop-loss is a way to escape the emotional pain of current losses. You think profit withdrawal is unbearable, but I now believe that it is just money beyond my understanding. Of course, everyone has a different attitude toward stop-loss. If you feel that stopping loss is really cutting your flesh, it only indicates that your position is too large.
Stage Three: All-In and Liquidation
Once there is a liquidation, it is highly likely there will be another. My second liquidation occurred after making a big profit: in early 2025, I used my only 500u capital to go all-in on trump and implemented rolling positions. Not only did I easily recover all my previous losses, my capital also increased 50 times, reaching 25,000u. Thanks to trump's market activity being concentrated in one day and one night, I quickly took profits on this trade, and I was also fortunate to leave a tiny position to set a break-even loss, escaping the downward trend after trump reached its peak... The next day after waking up, seeing trump plunge, I opened a small short position. This time, although I didn't roll over, after closing my position, my capital reached 30,000u, which was basically equivalent to several years' salary in my real life. This time, I truly felt the sensation of 'being wealthy,' completely distancing myself from the disappointment of the last liquidation, while setting a flag for myself: once I earn 1 million, I will stop.
At this point, BTC has reached 110,000. I currently have no open positions in my account, and it is during the New Year, so I am not in the mood to trade. After the New Year, seeing BTC pull back to near the 100,000 mark, I, with a floating mindset, went all in to bottom-fish. The first plunge dropped to around 90,000, I stopped loss and cut my position, wanting to earn it back, bottom-fishing at 92,000. It rebounded to near 100,000. In fact, if I closed my position now, I could have recouped the losses from the previous trade, but I still held on. Thus, floating profit turned to floating loss, and reluctantly stopped loss, bottom-fishing again, losing again... All the way making trades and stopping losses led to my capital being halved. I wondered why, despite strictly executing the stop-loss strategy, I still kept losing? Even opening a position would result in a loss, regardless of whether it was long or short. BTC finally dropped to around 74,000, and not only did my position blow up, but my mindset also exploded. Compared to the last explosion, this time it felt more like a dull knife cutting flesh. Looking back at this market, it was filled with various traps for long and short positions. Once you are tricked into the market, you either make a small profit or bring yourself to ruin. We cannot foresee all of this, nor can we predict the exact highs and lows. I even treated the money I didn't earn as my losses, and each time I opened a position, I only wanted to get back to 30,000u. This mindset either drove me to hold a small position for the long term, where the result was repeatedly turning floating profits into floating losses, leading to stop-losses, or to hold a large position for the short term, where any operational mistake meant losing several trades.
So I added another rule to my trading creed: no positioning. Unlike other KOLs' strategies, I need to establish my confidence through frequent short-term profits rather than watching my profits gradually evaporate in long-term trading, which would destroy my mindset. Additionally, each time I suffered a loss, I wanted to trade with a larger position to recover, but the volatile market could not support this approach.
Stage Four: Shanzhai Contracts Are Contracts
Due to the last major crash that disrupted my mindset, although I still have a portion of capital left, I actually lost due to several times of averaging down during that period. Compared to when my capital was in five digits, it is now very difficult for me to return to the peak with my four-digit capital, so I have turned my attention to altcoins. I will buy some BTC and ETH, but they have already turned into liquidation prices that are unlikely to be reached, merely playing with a little more spot trading. In fact, if I had played with my previous positions of BTC at 80,000 and ETH at 2,800, I could have at least returned to 30,000u by now. However, my mindset is equally important. Compared to bearing potential losses with a large position, I prefer to buy a small position for peace of mind.
However, you don't have to worry too much about very cheap altcoins. As long as you manage your positions well, no altcoin can blow you up when going long. The altcoin that laid the foundation for my future strategy is: myx. This coin can be said to be the first crazy coin I saw since entering the cryptocurrency world. Although I also saw trump go from 17 to 79, that market was too short, lasting only a day or two before plummeting, and the harvesting knife was too obvious, simply an ordinary trader. But with myx, you have to admire its methods: it first rose from 0.7 to 2, although it was already three times the price, many would take profits and exit. However, compared to the series of operations this coin would undergo in the future, three times was just the beginning. During this time, there was a situation of high-level consolidation with a funding rate of -2 calculated hourly, meaning you could earn 20% on your position by just going long, so many people were not selling to take profits but were just enjoying the funding fees. Of course, good things won't let you take all of it; about a week later, myx returned to its initial value. When everyone thought this coin was dead, after a long month of accumulation, myx suddenly surged from 1.2 to 18.6 one day, with an initial starting point of only 0.04, meaning it was a hundredfold coin. Throughout the surge, the funding rate kept at -2; although there were deep pullbacks, it quickly bounced back. It surged in three waves, and I was enjoying the funding fees during this period, coupled with my final profits, bringing my assets to 40,000u. From then on, I turned my attention to these altcoins.
Making money is that simple. You may not agree with it, but in my case, even a tiger lies down for me, and a dragon circles for me! Strongly flipping capital back in the chat room.
