To never burn your account while trading, apply inversion thinking:
Instead of asking, "How do I make a million dollars?", ask:
"How do I lose all my money?"
Here are the actions that guarantee bankruptcy:
- Max Leverage (x50, x100): Even a small market fluctuation can wipe out your account.
- Infinite Holding, No Stop Loss: Holding onto a losing trade, hoping it will rebound, can be disastrous.
- All-in: Putting your entire net worth into a single coin is a recipe for disaster.
- Revenge Trading: Increasing your trade size after a loss due to anger can lead to further losses.
- Blind Following: Buying based on others' opinions without doing your own research can be costly.
To avoid these mistakes, use reverse thinking:
Instead of trying to be brilliant, focus on not being stupid.
Eliminate the actions that can burn your account, and the only outcome will be breakeven or profit.
Remember:
- The winner in trading is the last man standing.
- Compound interest only works if you avoid making mistakes that can wipe out your account.
- Don't focus on winning fast; focus on being invincible.
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