币圈雪雕

If you plan to develop in the cryptocurrency space for the long term and take it as a profession
1. Rapid Learning: Don't rush to make money when you first enter the space; first, understand the basics such as exchanges, cross-chain, and blockchain. Without these, it will be difficult to make money.
2. Independent Practice: Do not blindly trust others; there are many scammers in the cryptocurrency space, and the information is complex. The final investment decision needs to rely on your own research and judgment.
3. Community Choice: A good community can help you understand the real situation, avoiding meaningless chatter or false profit screenshots.
4. Independent Investment: Investing is your own business; others' analyses and opinions are merely for reference. Establishing your own investment framework and independent thinking is more important.

The so-called trading strategy can be simply explained as the overlaying and combining of market advantageous conditions - we only enter the market to open positions when multiple conditions like ABCD are simultaneously met, and this is called a trading strategy.
In the market, there are many signals that can be considered advantageous conditions, such as the direction of moving averages, the direction of breakout from a consolidation, market highs and lows, and changes in trading volume, among others. However, using just one or two of these signals for trading cannot achieve a high win rate. We need to organically combine different advantageous signals together, like assembling building blocks, to construct a tall tower from scattered pieces, so that we can stand in a higher position than others in the quagmire of the market.

Bitcoin has finally passed, just verifying my guess...
The Bitcoin spot ETF has finally been approved by the US SEC. What does this represent? And what will happen in the future?
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1️⃣The approval of the Bitcoin spot ETF represents that virtual currency has gained recognition in the mainstream market, allowing ordinary people to trade it as an asset, which also proves that traditional finance is compromising with the crypto community;
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2️⃣The Bitcoin trust fund may be converted to an ETF, as regulators changed their stance on Bitcoin ETF issues during a lawsuit last year. In August last year, the court announced a victory for the crypto community and criticized the SEC for blocking the issuance of Bitcoin ETFs;

For those trading in the market, the term 'trading strategy' is probably not unfamiliar. I mentioned in my past notes that a trading strategy is the combination and overlay of multiple market advantages—only entering trades when the market meets certain conditions labeled ABCD, this is what it means to execute trades according to a trading strategy. So today, let's continue to discuss how to construct a trading strategy that can achieve stable profits.
The fastest way to build a trading strategy is undoubtedly to directly take someone else's already established trading strategy. In 2024, there are many channels to learn trading; you can meet trading mentors online or learn trading knowledge through books. However, during the learning process, it is important to pay attention to one thing: the object of our learning must be a systematic knowledge system, not fragmented and unrelated bits of knowledge. A systematic knowledge system is like stacking ingredients such as bread, bacon, patties, and eggs in an orderly manner to create a delicious hamburger—only when knowledge points are interconnected and complement each other can the system function at its best. If you just piece together knowledge from different sources, learning one pattern here and a theory there, you will end up with a jumble of useless parts, just like a chaotic toy box of a mischievous child. I often say that to become a winner in the market, it doesn't depend on the breadth of your knowledge, but rather the depth of your understanding.

In the trading industry, winning and losing are commonplace; whether you are an experienced trader or a novice, losing trades will inevitably come to everyone. However, when faced with sudden losses, how to properly handle losing orders largely distinguishes one trader from another. Today, let’s talk about the topic of losses—how do excellent traders handle losses?
1. Set a reasonable stop-loss position
When facing order losses, the first important consideration is to execute stop-losses effectively and logically. The stop-loss position should generally be decided before placing the trade, rather than hurriedly considering it after the loss has occurred. Once the trade position shows a negative value, the trader will inevitably experience emotional fluctuations to some extent, and sometimes may set unreasonable stop-loss lines out of fear. Only a stop-loss position that is determined before placing the order is the most rational and logical.

At first, because the market was good and I was lucky, I could basically make a profit on every contract [smileR], so I developed the habit of trading contracts for an hour every morning, doing short-term trading for an hour. The good market led me to think that I was sensitive to numbers [smileR]. At that time, everyone believed that when the king officially took office, there would be another wave of increases, but the market's expectations had already been fully priced in before that, so during the correction period, I had no accurate judgment on the market, and what awaited was liquidation [sighR].

Personally, I feel that long-term profitability in the cryptocurrency space requires a long-term mindset. Many people, including myself, have unrealistic expectations for the crypto market because we've heard too much about hundredfold coins, so we are not interested in the big coins that only move a few points in a day [smileR]. Every day I think about finding a hundredfold dog coin, but from my observation, those who can truly make money in this field are only focused on a few major coins (like BTC, ETH, etc.), after all, these coins have their own mature ecosystems and applications. In contrast, meme coins may seem profitable in the short term, but people's mindset can also become inflated.

In a volatile market, there are often situations where it feels like being half-alive. What should you do if you're in a loss state during this time? Simply put, buy when it drops and sell when it rises.
For example, if today it drops by one point, buy an additional two hundred; if tomorrow it drops by two points, buy an additional four hundred, and so on. If it rises by one point, sell two hundred first; if it rises by two points, sell four hundred. Many people have a misconception that when they incur losses, they only know to buy more and do not know to sell when it rises, unless you are very confident that it will rebound quickly. Otherwise, you will just keep buying until you run out of bullets. Selling a little when it rises and buying a little when it drops ensures that you always have some bullets on hand. By cycling through this way, you'll quickly see your profits turn positive.

Bitcoin suddenly dropped below $90,000 this time. In simple terms: it encountered "threefold pressure" in the short term, but the long-term foundation may not be shaken. For ordinary people, it could be an opportunity, but be careful not to act recklessly.
Why did it drop?
The Federal Reserve has "poured cold water" on expectations: Previously, everyone thought that the US would cut interest rates in March next year, making money cheaper, which led to a buying frenzy for Bitcoin. However, recent US employment data has been strong, and the Federal Reserve may not cut rates so quickly. With expectations not met, some funds have withdrawn first.
Money has been "siphoned off" to the US stock market: Recently, the US stock market (especially tech stocks) has performed exceptionally well, reaching historical highs. Many funds believe that making money there is more stable and faster, so they have flowed out of the crypto market to chase US stocks.

The simplest and most effective standard is: in a bull market, there are more bullish days than bearish ones, while in a bear market, there are more bearish days than bullish ones.
When it rises, it's decisive, and when it falls, it's hesitant; that's mostly a bear market. Conversely, if it drops and is quickly bought back, rising in segments, that's a typical bull market rhythm.
It's more intuitive when viewed in the context of the market.
In a bull market, the declines are mostly profit-taking by bulls or normal technical pullbacks. Essentially, it's not that no one is buying, but that buyers are waiting for the right position. You will find that when bad news comes out, the price might surprise you, but the drop is often limited, and someone quickly takes the chips. At such times, the pullback itself is part of the market, and if you hesitate too long, the price may not give you the opportunity to get in.

This past week I've been watching the trend of Ethereum (ETH), and I wanted to chat with you about it — from what I've observed, this wave is actually scary + scary + then a bit reliable, overall it's okay, as long as you want to hold long-term, you can actually be a bit more at ease.
Let's first talk about the "scary / strong fluctuations" part: ETH suddenly dropped from over 3000 to around 2800, which looked like "the market collapsed." I guess this is mainly not because ETH is really bad, but because a lot of people used leverage, and when it dropped, they were forcibly liquidated, resulting in a "chain reaction." Then funds were pulled back from the low point — so we feel the repeated fluctuations of "drop – pull up – drop again – pull up again," like a roller coaster.

The fall of Bitcoin this time was quite painful and shocked everyone. Don't panic; let's break down the technical jargon and explain in simple terms what is really happening.
To put it simply, this situation is just a combination of several bad news hitting at once.
1. The 'sugar' from the big brother (the Federal Reserve) may come late.
The market was originally hoping for a rate cut in the U.S. so that money could be cheaper, leading to an influx into cryptocurrency trading. However, the latest news suggests that they may not be in a hurry to cut rates (the probability of maintaining the interest rate in January has risen to over 75%). It's like a group of people waiting for a feast with empty stomachs suddenly hearing that dinner time has been postponed, causing everyone's enthusiasm to wane, and they decide to sell some cryptocurrency to see how things unfold.

Recently, too many friends in the crypto space have lost their minds; the prices of the top 50 altcoins are even lower than after the FTX collapse in 2022.
BTC, ETH, and SOL have also returned to the levels of December 2024.
Many people have hardly made any money this cycle and are now eager to recover their losses.
Is the four-year cycle still valid?
If you believe in the 'four-year cycle', we have actually passed the 18-month mark, and logically, the high point should be around here. But the market feels completely different.
The old model has collapsed, and new rules have not yet been established.
In the past four years, tokens have mostly followed a low circulation + high FDV model.
This year, Polychain sold 240 million $TIA, which is just the tip of the iceberg.

Thirty years ago, Luo Wen's dusk was not popular, but thirty years later it became popular. This song is very melancholic! However, it has been widely sung on the internet, which shows that everyone now likes to listen to this song and appreciates its tearful melody. On the other hand, it perhaps proves that everyone is not doing well, reminiscing about the past yet feeling powerless! I really like a statement from the internet: after watching Mr. Jin Yong's 'Demi-Gods and Semi-Devils', I really want to ask what regret is. The goal that Murong Fu pursued all his life was something Duan Yu acquired at birth. The Wang Yuyan that Duan Yu pursued for most of his life was something Murong Fu could easily possess! Some people are born in Rome, while some may never reach Rome in their lifetime! We spend our lives striving for our goals, and only when we are in our thirties or forties do we realize that perhaps a large part of growing up is acceptance: accepting to go separate ways, accepting the unpredictability of life, and accepting loneliness and setbacks! What we are ultimately seeking may not be a perfect result, but rather the continuous process of struggle... Keep it up!

Small stop loss, high take profit
It sounds like a professional statement, but it is actually the 'chronic poison' of countless novice accounts.

The logical trap is here:
Small stop loss = frequently swept away
High take profit = extremely low triggering probability
Result = countless small losses, occasionally not even one

You think you are 'controlling risk and maximizing profit', but in reality, you are using the worst odds to engage in the highest frequency of losing trades.

Why is 'small stop loss' especially deadly in the cryptocurrency circle?

[Traders use stop losses and take profit expectations to predict the upcoming volatility range and the direction of the first breakout. Reaching take profit first means victory, while reaching stop loss first means failure.]

First, strive to minimize losses. Trading is inherently linked to both profits and losses; losing money should be viewed as a cost of trading. One should not be overly optimistic about making big profits while neglecting the possibility of losses. In fact, both gains and losses are part of the trading outcome, just like the two sides of a coin. One should lower expectations for profits and instead focus on minimizing losses when things go wrong and maximizing gains when things go right. How can one achieve fewer losses? First, psychologically, one needs to have the mindset that 'losses are part of the trading outcome,' bravely accept failures, and manage their emotions well. Secondly, one must force themselves to cut losses and close positions at the first opportunity, with the courage to make tough decisions and not procrastinate when wrong.

Strictly adhere to 3 major principles:
1. Start with low leverage: beginners are advised to use ≤2 times leverage, consider increasing after gaining proficiency.
2. Diversify holdings: avoid leveraged positions in a single stock to prevent black swan events.
3. Stop loss first: preset stop loss points (e.g., -5%) to avoid holding onto losing positions.
Applicable scenarios:
Trend confirmation: For example, leverage after breaking through key resistance levels.
Short-term speculation: Use leverage to amplify intraday volatility gains (needs monitoring).
Hedged portfolio: For example, shorting through margin trading to hedge against position risk.
Leverage's 'small bets for big returns' is like a sharp knife; experts use it to precisely cut opportunities, while novices easily harm themselves.

A reflection from someone who has been there, newcomers should be cautious when entering the industry, hoping someone will heed the advice.
I once naively thought that living off trading was just about freely tapping the keyboard to make money.
Until real money is put in, the red bars of liquidation stabbing the eyes repeatedly, one only understands the cruelty of this industry - it has never been a shortcut of 'gambling a bit', but a hell where discipline must be rigorously adhered to.
I have seen too many newcomers rush into the market with dreams of getting rich, staring at the Bitcoin candlestick charts day and night, chasing up and down, frequently making trades, and in the end losing all their principal.
I have also seen many veterans who, despite having a well-formed trading system, were defeated by their mindset: being greedy and adding positions when profitable, and holding onto losing trades hoping for a reversal, only to end up with nothing.

Learn to take profits. If we are strategizing in a relationship, cut losses in time if we want to have the correct long-term perspective.
If you treat any relationship like you treat stocks. Repeat the profitable actions. The humanity in the market uses emotions to judge.
Not everyone is worth your full investment, learn to cut losses.

Timely loss-cutting is something most people can't do; the wrong behavior hits your brain again and again until we are in pain and fear. Pain to the point where our brain reacts to the visuals; then we can finally make choices that benefit ourselves, facing the pain. The joy of profit will change our behavior.

If you lose, just start over, as long as you can afford to lose, you can have the courage to get back up at any time.
Standing high means you can see far, not that you can jump far. If you can't swim, you shouldn't go near the sea. The sea turtles by your feet and the fish at the edge of the cliff are destined to happen like black swans.
Continuing from the previous text 🔥

At that time, what I kept thinking was to achieve instant success and recover my investment in one go, so my positions were particularly exaggerated, without any position management or risk management, only what I wanted. Therefore, I would invest as much as I wanted. The ignorance and fearless courage at that time seemed rather ridiculous yet sincere (thoughts on picture 4)

Recently, I've been chatting with some people who trade on their own. Each person's personality is different, but the ultimate goal is the same. We all want to make more money. Maybe you want to change your life, maybe you want to give your family a better life, or maybe you just want to improve yourself a little.

The charm of trading lies in the confidence it gives you in the secular world. You no longer worry about the future; you know what you have. Perhaps this path requires some pressures that are hard for ordinary people to understand, but trust me, when you know what you're doing, trading is your best gift.