Making a few trades a year earns more than trading every day.
Three years ago, I brought Xiaolin into the cryptocurrency world. Like other newcomers, he couldn't help but feel anxious when he saw others posting their profits, always thinking that if he didn't enter the market, he would miss out on billions. As a result, in less than half a month, his capital shrank by 40%. I watched him chase highs and cut losses again and again, as if I were seeing my former self.
I told him: the secret to surviving with small capital is not 'fast', but 'waiting'. Today, I want to share this insight with you.
1. Why do newcomers always lose money?
The mistakes Xiaolin made at the beginning almost covered all the common problems of newcomers:
Emotional trading, I can't help but chase in when I see a surge, afraid of missing the ride; then panic sell when it drops, ending up selling at the lowest point. He is completely led by market emotions, buying at the peak and selling at the bottom.
Blindly following trends and believing in the various 'experts' on social media without your own judgment. The result is taking over positions from those who have already built their positions.
Obsessed with high leverage, thinking it could double my money quickly, but not realizing that leverage amplifies not only profits but also risks. A small fluctuation could lead to liquidation.
Xiaolin once asked me: 'Why can I make money easily in a simulated market, but keep losing in the real market?' I told him: In a simulated market, you can restart infinitely, but in the real market, one mistake can mean losing the qualification to participate forever. This is why most people are heroes in simulated markets but become fodder in real markets.
Second, my transformation: from 'frequent trading' to 'patient waiting'.
I was once addicted to short-term trading, staring at candlestick charts every day, frequently buying and selling. Transaction fees were eating into my capital, while profits were slow to arrive. Until I realized: in the cryptocurrency market, living long is more important than making quick money.
I started to change my strategy:
I only catch the main uptrends two or three times a year, spending most of the time observing with light positions. There are indeed many opportunities in the cryptocurrency market, but not every opportunity belongs to you.
For medium to long-term operations, I leave enough cash for swings, selling when it rises and buying when it falls. Not being greedy to catch every fluctuation, only making money from the part I understand.
In short-term trading, only focus on mainstream coins with high trading volume, using 15-minute candlesticks and KDJ indicators to find buy and sell points. Avoid obscure coins and air coins; that is not a game for us retail investors.
I pay special attention to risk control, setting stop-loss points for every trade, and never allowing a single loss to exceed 5% of the total capital. If I make a wrong trade, I decisively cut my losses; preserving capital gives me the next opportunity.
Third, avoid these pitfalls, and you can surpass 90% of newcomers.
After years of struggling in the cryptocurrency market, I have summarized several pitfalls that must be avoided:
Do not let FOMO (fear of missing out) control you. When a coin has already surged 500%, entering is not investing; it's just taking over someone else's position. The market is always full of opportunities; what it lacks is patience.
Do not invest funds that you cannot afford to lose. I always only invest spare money, which helps stabilize my mindset and prevents panic decisions due to price fluctuations.
Do not blindly believe in positive news. The market always 'buys expectations and sells facts.' When good news is announced, it often coincides with the peak of prices. Xiaolin once wanted to rush in after a piece of good news was announced, and I stopped him. The next day, sure enough, it opened high and closed low.
Be sure to reduce positions around holidays. I have studied five years of historical data, and there are often significant fluctuations after holidays; holding light positions during holidays is the safest choice.
Fourth, surviving is more important than anything else.
The cryptocurrency market is not short of stars, but it lacks longevity. Many stories of getting rich overnight ultimately turn into accidents of losing everything overnight.
Successful investing is not about how much you earn, but about how long you can survive.
I have seen too many people shine for a moment, only to be eliminated by the market due to a single mistake. Those who can continue to profit understand the importance of controlling risks and preserving capital.
After Xiaolin understood this, he not only recovered his losses but also achieved stable profits. Making money in the cryptocurrency market does not rely on luck, but on grasping the market rhythm and having ironclad execution.
If you are still confused, it might be a good idea to stop frequent trading and think about your strategy. Sometimes, doing less is the best action.
Even if your capital is small, as long as you can survive in the cryptocurrency market, waiting for the bull market to come makes all the waiting worthwhile.
Investment is essentially a cultivation of human nature, especially in the cryptocurrency market. Here, greed and fear are amplified infinitely; only by overcoming these emotional weaknesses can one become the ultimate winner.
I used to explore alone in the cryptocurrency market, now I am willing to share my experiences. If you are still searching for direction, perhaps I can light a lamp for you. Follow Xiang Ge to learn more first-hand information and precise points in the cryptocurrency market, becoming your guide in the cryptocurrency world. Learning is your greatest wealth!
