That perfect curve ultimately became the noose that buried my funds.
That summer of 2021, the trend of ETH was so strange it was fascinating.
During the day, it rose steadily, and at night, it fell on time, only to rebound fiercely the next day. This cycle repeated for nearly half a month, as if it were programmed. When I discovered this 'pattern', I was overjoyed—it felt like I was served a meal right by the heavens.
At first, I was very cautious, setting stop-losses on every order. After a little over half a month, the account numbers were climbing steadily, and I walked with confidence.
What’s terrifying? It’s that after a few 'false stop-losses', I dismantled my own lifeline.
Clearly, my directional judgment was correct, but the order was gently swept away by the stop-loss, and just after leaving the market, it headed towards the target I predicted. After a few times, that bit of awe I had completely disappeared: 'I have figured out this market; stop-losses are completely unnecessary!'
Arrogance often becomes the prelude to collapse.
That early morning, I watched the night market drop significantly, so I heavily went long and then went to sleep contentedly, even setting an alarm for 11 o'clock to prepare to 'collect money'.
So what happened? When the alarm went off and I opened the market software, I was completely stunned. After the night market fell, the day market did not rebound as expected but continued to plummet like a kite with a broken string. I stared at the constantly expanding losses, my palms sweaty, sitting there from morning until afternoon, and in the end, I gritted my teeth and cut my losses—30% of my position just vanished.
Only when I reviewed later did I wake up: if I had stubbornly held on at that time, I might have been swept away by the market, with no chance to turn things around.
The 'pattern' trap in trading.
There are many similar 'patterns' in the market: some focus on the opening time of US stocks, while others pay attention to low liquidity phases during meal times. These patterns may have statistical significance, but the problem arises when traders discover a certain pattern is effective; they easily become overconfident and abandon their risk thresholds.
I also realized later that this mindset is a typical overconfidence bias—after consecutive profits, traders overestimate their predictive abilities regarding the market and ignore potential risks.
At that time, I was trapped in an illusion of control, thinking that I could master the market trends with my discovered 'day-night patterns.' Little did I know how insignificant an individual is in the face of the macro market.
Stop-loss: an annoying self-protection.
Looking back now, those few 'false stop-losses' were actually the market teaching me to respect risk, but I misread the signals.
The stop-loss orders being swept away are never a problem with the stop-loss itself, but rather the judgment of the timing and position for entering needs to be optimized. Treating it as a failure of risk control is equivalent to throwing the baby out with the bathwater.
In the highly volatile cryptocurrency market, setting stop-losses is an essential risk management strategy. Trades without stop-losses are like cars without brakes; no matter how fast they go, they will eventually go out of control.
Staying alive is more important than anything.
Now I understand completely: being obsessed with win rates is purely self-deception.
We are not internet celebrities who make a living by following trades. Even if the win rate is only 10%, as long as the risk-reward ratio is high enough, we can still make a profit. When the market is bad, don't always think about counter-trend buying. Staying alive at the table is more important than anything.
The pits we fell into and the money we lost were not tuition fees paid in vain, but rather a compass to help us understand the market's temperament. The market is never short of opportunities; what it lacks is the patience to withstand temptation and uphold the bottom line.
If you have also discovered some 'pattern', please remember: always leave room for your judgment with stop-losses. The most dangerous moment in the market often occurs when you confidently think you have 'figured it out.'
True trading wisdom lies not in seizing every opportunity but in holding the bottom line, resisting temptation, and surviving to the next cycle.
The most ironic thing in this world is that what seems like 'excessive' caution ultimately becomes the dividing line between survivors and cannon fodder. Follow Ake to learn more firsthand information and precise points about the cryptocurrency world; become your own guide in the crypto space, as learning is your greatest wealth!#ETH走势分析 #加密市场观察 $ETH
