Zhao Changpeng, 44, founder of Binance, rose from obscurity to 'the richest Chinese' in just four years, with a net worth of $90 billion, placing him among the top ten richest people in the world.
According to (The Paper), Binance was established only 4 years ago, with a daily trading volume of $76 billion and a valuation of $300 billion. Zhao Changpeng holds 30% of the shares, surpassing Nongfu Spring's Zhong Shanshan in wealth.
Li Xiaolai, formerly a teacher at New Oriental English, cashed out 13.5 billion yuan with 100,000 bitcoins and became rich overnight.
According to Wikipedia, he invested in 2,100 bitcoins in 2011, later increasing his holdings to 100,000, and by 2018, his wealth reached 7 billion yuan, earning him the title of 'China's Bitcoin Billionaire.'
Guo Hongcai, known as 'Treasurer Bao,' transitioned from selling beef to becoming a bitcoin angel investor, dressed in a T-shirt and flip-flops, challenging the financial industry's formal attire, and turned his fortunes around overnight.
Erik Finman, a 17-year-old high school dropout, invested $1,000 given by his grandmother into bitcoin, and now has a net worth in the nine figures, becoming a core investor in Silicon Valley cryptocurrency startups.
Liangxi started with 1,000 yuan, using a high-leverage strategy, earning nearly 40 million yuan in one wave of market movement, becoming an overnight sensation in the crypto world. These wealth myths attract waves of young people into the crypto space like magnets.
Because they firmly believe that an investment of tens of thousands can multiply a thousand times, under the temptation of huge profits, some people monitor the market overnight, chasing the dream of getting rich overnight.
You can choose not to believe in technology, not to believe in whales, not to believe in K-line averages, not to believe in BTC, and think they are all scammers. You can also choose to believe these; these beliefs will not prevent you from making money.
But there's one thing you must understand: 'risk.' What is risk, how to manage risk, how to calculate risk, how to operate with risk, how to exit from risk, and how to survive.
You cannot earn money outside your cognitive range. If you invest in a coin and its value doubles, you earn 100%; then with contracts, if you leverage 3x, you earn 300%. But where does that extra money come from? Do you know?
In contract trading, what you earn is actually the money from risk management, which is the money that others lose and get liquidated. To get this money, you must first avoid being liquidated.
In fact, looking at the market from the perspective of 'risk' is completely different from how ordinary people view the market. It's like viewing a mountain from the bottom versus seeing it from the top; they are fundamentally different. For example, those who buy coins can hold positions and endure losses, emphasizing patience, but in contract trading, if you hold a position and endure losses, you probably won't survive the first three episodes.
So, operations truly based on 'risk' management are completely different from operations based on 'dreams.' In the trading market, dreaming costs money, while those who manage 'risk' strive to get that money into their hands.
So, do you want to be a 'dreamer' or a 'risk manager'? It depends on yourself. However, 'dreamers' shouldn't play with contracts; trading contracts can shatter the beautiful dreams built over years in just a few days, and waking up is too quick.
Anyone who has made a lot of money will have a feeling during the process: 'That period was almost like picking up money,' but when the opportunity comes, meaning when it’s your turn to pick up money, you need to be alive and have the capital to pick up money.
Yes, making money from contracts is not difficult. After all, there are so many people who get liquidated and send money your way. They are racing on the edge of a cliff; you just need to wait at the bottom of the cliff and pick up some parts to get by.
The difficulty lies in the fact that it is inherently against human nature. Basically, you have to think opposite to the ordinary person's idea of 'getting rich overnight.' Whenever you are eager to add positions or open new ones, you have to think about what it means to 'go against human nature.'
If buying coins is like fishing, then trading contracts is like boxing. That's why I say that spending a lot of time in cash positions is quite normal. Waiting, testing, retreating, trying again, and waiting… this is the norm for successful speculators.
In fact, strategies over a period are almost straightforward and can be said to be known by everyone.
For example, on February 14, 2022, many teams' operational strategies are: short most cryptocurrencies while selectively going long on BTC as a hedge.
The reasons are not many, just think of yourself as a big shot in the crypto world and then deduce from there. It's such an absolutely profitable strategy that when people operate contracts, 80% of them can't make money.
And such a simple strategy actually contains countless details. For example, the simplest operating principles, why not short directly based on BTC, why shorting is much more conservative than going long, and much shorter in holding time, how to handle stop-loss when shorting, how to short various technical coins... The stop-loss strategies for contracts need theoretical backing; they are worth learning, and the value of stop-loss theory is at least half of your investment in contracts. If you can't find it, you need to derive your own complete set of theories, which implies a complete set of operations that must be strictly executed, and there will always be opportunities.
Trading is like this; on the surface, it's extremely simple—just buying and selling (one minute on stage), but countless people have done their homework behind the scenes (ten years of effort offstage). Overall, this is a profession. It’s not to say that novices can’t do it, but you must study and train seriously before you can truly step onto the stage.
I often compare flying a plane to speculative trading. The reason is that the two are quite similar; if you forcefully fly a plane without knowing how, the result is disaster, just as forcing speculative trading without knowing how will inevitably lead to liquidation.
And risk management and stop-loss management are equivalent to the most basic skills of flying a plane; with this, you can at least ensure that you won't die.
Moreover, the approach to contracts in long and short positions is completely different. This is entirely different from forex, where the value is between two currencies, while in this case, it is the value of cryptocurrency against money, which are completely different things.
For example, I rarely see so many rounds of fluctuations in long and short positions. The reason for losses is that short selling is fundamentally different from long positions in terms of approach and thinking. For instance, shorts usually only capture a segment, and shorts must be time-limited. In contrast, long positions are usually limited in quantity, and sometimes additional positions are added, considering holding. Such differences indicate that the entire approach is completely different. Therefore, actual speculation is a specialized skill.
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