Success in the crypto world is not about who makes more money, but about who lives longer.
My first apprentice, Xiao Chen, blew up three times in four months. Each time he summarized the lessons, he gritted his teeth and cursed 'the dog fund is too cunning', 'the project party suddenly withdrew liquidity', 'the market suddenly had a black swan'.
Until I had him send me the transaction records and mark those fatal entry points with a red circle. He was silent for a long time and finally squeezed out a truth: 'Teacher, actually, I manually modified the stop loss three times.'
This sentence is worth twenty thousand dollars - this is the first tuition he paid to admit his mistake.
One, the source of 95% of losses in the cryptocurrency world: the face trap
Face is a unique cultural phenomenon among Chinese people, reflecting the 'need for respect and recognition' in Maslow's hierarchy of needs. In the cryptocurrency world, this psychology is amplified to the extreme.
The vast majority of losing investors initially did not incur losses due to inadequate technical analysis or delayed information, but because they could not face their judgment errors calmly. They would rather blame the market, the funds, or project parties than admit they need to adjust their strategy.
The cryptocurrency world amplifies human nature by 100 times, where one second equals a year. Here, face is the most expensive and easiest to discount.
Two, the transformation of traders: from 'refusing to acknowledge mistakes' to 'actively acknowledging mistakes'
I designed a 'three-province punch-in mechanism' for Xiao Chen:
After each trade, immediately send a fixed-format 'mistake summary' in the group, clearly stating: 'I held a position at xx price for x hours, violated rule number x, next stop-loss set at xx.'
If the punch-in is not completed that day, they will be directly removed from the group chat and must reapply to join the next day.
Persisting for 21 consecutive days, rewarding 50 dollars, the purpose is not the amount, but to purchase a form of 'muscle memory' to face losses head-on.
Three weeks later, Xiao Chen changed his profile picture to a grayscale photo, calling it 'the portrait of my old self'. What surprised me the most is that he can now decisively close an 8% losing position within 15 minutes, and he can even joke in the group: 'That cut just now was aimed at my greed and ignorance, awesome!'
Three, why is 'acknowledging mistakes' so difficult?
In the field of financial trading, there is a common phenomenon: most investors find it hard to sell losing positions because they fear that prices might rebound after selling, resulting in continuous errors.
This is a manifestation of arrogance and the root of regret.
Cognitive dissonance is the core issue: when traders find their judgments inconsistent with market reality, they experience psychological discomfort. Irrational people will choose to deny reality rather than adjust their cognition.
In the high volatility market of cryptocurrency, short-term thinking is another fatal flaw. Many people focus only on immediate gains and losses, rather than developments over six months or a year.
Four, practical methods to cultivate the 'wrong recognition instinct'
Specific rules: do not settle for vague slogans like 'do a good job with stop-loss'. Clarify the specific parameters of each rule, such as 'single loss not exceeding 2% of capital', 'leave the market immediately if it breaks key support'.
Establish an accountability mechanism: find like-minded traders to form a small group, mutually supervise each other's trading records. Publicly sharing your judgments will increase psychological accountability.
Regular review: spend time each week analyzing your trading records, focusing not on how much you earned but on whether you strictly followed your plan. Successful traders do not avoid mistakes, but know how to learn from them.
Adjust your mindset: view every stop-loss as tuition paid, not a loss. If the stop-loss is hit, you only lose money; if you refuse to acknowledge mistakes, you lose the next opportunity—you will bet heavier because you want to 'recoup losses', ultimately sacrificing your capital.
Five, risk control is a form of muscle memory
When risk control becomes an instinctive reaction, you have surpassed 95% of market participants.
Low leverage is key to survival: high leverage equals suicide, 100x leverage means a 1% fluctuation leads to liquidation. I never advise beginners to use leverage exceeding 5 times.
Asset diversification should not be ignored: don't put all your eggs in one basket, but also don’t put them in so many baskets that you can’t count. Having 3 exchange accounts, one independent hot wallet, and another independent cold wallet is already enough for beginners.
Conclusion: Only through death and rebirth can one survive in the cryptocurrency world.
Daring to say 'I was wrong again' in public gives you one more life than 95% of people. Acknowledging mistakes is not being soft-spoken, it is being firm. Holding positions is truly cowardly—hiding stop-losses and showing hope on your face is not trading, it's burning incense.
First learn to die, then you can live; first dare to lose money, then you can make money.
For the next trade, when the stop-loss is hit, don’t bang the table, smile first—this means you have once again killed the 'self that refuses to acknowledge mistakes'. The market always rewards those traders who can survive.
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