Strict self-discipline leads to success.
Friends, today I want to share with you my real experiences in the crypto world over the past ten years. Once, I lost a principal of 1 million and was left with only 300,000, my family was on the brink of collapse, my wife was demanding a divorce, and I didn't dare to go out for two whole months. But I ultimately turned the remaining 300,000 into 50 million.
This is not a myth of getting rich quickly, but a story about survival, discipline, and growth. If you are struggling in the crypto world, I hope my experience can provide you with some insights.
1. Entering the crypto world: from ambitious to nearly despairing.
In 2014, I entered the cryptocurrency world with a capital of 1 million. Like most novices, I initially tasted success, and even saw my assets rise to 1.2 million at one point. This made me mistakenly believe I had investment talent, and I began to trade frequently, leverage up, and believe in so-called 'insider information.'
However, the market punishes all sorts of disobedience. In 2015, the bear market arrived, and my assets plummeted: 1.2 million → 800,000 → 500,000 → 300,000 → 200,000. At the worst point, the 1 million principal was left with only 210,000, losing nearly 80%.
During that time, I fell into deep self-doubt. My wife argued with me every day and even threatened to divorce me. I locked myself in my room, staring blankly at the candlestick charts all day, smoking until my throat became hoarse, and nearly lost the courage to live.
2. Turning point: From despair to awakening.
The turning point happened during an honest conversation with my father. When he learned about my losses, he did not blame me but calmly said: 'Son, it's just 1 million, if you lose, you lose. Dad can earn it back. But you cannot collapse; in life, who hasn't stumbled?'
This sentence struck me like a heavy hammer. I realized that I had been entangled in the money lost, forgetting that the most precious thing is my life. So, I made up my mind: either quit completely or fully commit to serious learning.
I began systematically learning trading knowledge, reading dozens of investment books, and reviewing candlestick charts for over 10 hours a day. More importantly, I met a good teacher who helped me understand the three core cognitions of the cryptocurrency world:
Respect the market and give up illusions. The market is always right, and no one can predict market trends. What we can do is not to predict the market, but to follow it.
The essence of trading is a game of probabilities. Find trading opportunities where both win rate and risk-reward ratio are favorable, and achieve long-term profits through continuous repetition.
Risk control is always the top priority. The cryptocurrency world is not short of opportunities, but lacks the patience to survive.
Three, my trading system: the culmination of eight years of practical experience.
After eight years of practice, I have summarized a complete trading system, which includes the following core elements:
1. Trend judgment: Follow the trend, do not act against it.
I mainly use the MA moving average system to judge trends. An upward trend must meet the following criteria: Daily MA60 is running upwards and the price is above MA60; MA20 is above MA30, forming a bullish arrangement; recent trading volume is gradually increasing.
Once the trend is determined, I only take trend-following positions and never act against the trend. In a bull market, only go long; in a bear market, only go short; in a sideways market, either hold light positions or observe.
2. Precise entry signals: Three confirmations before acting.
I no longer open positions based on feelings, but wait for clear entry signals. My entry signals require triple confirmation from moving averages, MACD, and trading volume.
For example, the entry signal in an upward trend is: price retraces to near MA20 or MA30; MACD forms a golden cross above the zero axis; trading volume shrinks during the retracement, and expands when the golden cross appears.
3. Strict position management: The core of survival.
Position management is the key to my growth from 300,000 to 50 million. My rule is:
The position of a single cryptocurrency should not exceed 20% of total funds; no matter how optimistic you are about a particular cryptocurrency, do not make large bets.
Trial and error positions + incremental increases: First use 5% of funds for trial and error, and gradually increase positions if the market meets expectations.
Overall position control: In an upward trend, total positions should not exceed 80%, in a downward trend not exceed 50%, and in a sideways market not exceed 30%.
4. Take profit and stop-loss strategy: Cut losses and let profits run.
I set mechanical take profit and stop-loss rules with no room for negotiation:
Long-term investment: If a single cryptocurrency loses 15%, enforce a stop-loss; in a bull market, use a trailing stop-loss, reduce positions if the price falls below the 10-day moving average, reduce again if it falls below the 20-day moving average, and liquidate if it falls below the 60-day moving average.
Swing trading: exit immediately if losses reach 5%; target profit of 5-10%.
Short-term arbitrage: If losses reach 3%, decisively stop-loss; target a profit of around 5%.
Four, my eight iron rules.
Do not panic after a stop-loss: After a loss, do not rush to recover but instead stop to review strategy loopholes.
Abandon the pursuit of quick success: Trading is not a means to get rich overnight; wealth accumulation takes time.
Follow the major trend: In a one-sided market, resolutely follow the trend and do not act against it.
Nail the risk-reward ratio: ensure at least a 2:1 risk-reward ratio before opening a position; the profit potential should exceed the loss risk.
Quit frequent trading: Do not take action without certainty, reduce the number of trades, and improve trading quality.
Maintain cognitive boundaries: Only earn money within your cognitive range, and do not rashly enter unfamiliar fields.
Eliminate holding positions: resolutely stop losses and do not harbor illusions.
Do not become impatient when profiting: Maintain calm after making a profit and strictly adhere to trading discipline.
Five, trend trading strategies: my core weapon.
In the cryptocurrency world, the trend is your friend. The trend trading strategies I summarize include:
Judging the trend: Analyze the peaks and troughs, an upward trend is characterized by gradually rising peaks and troughs, while a downward trend is characterized by gradually lowering peaks and troughs.
Drawing trend lines: An upward trend line connects two consecutive low points, while a downward trend line connects two consecutive high points. An effective trend line requires confirmation from a third point.
Trend reversal signals: In an upward trend, if the retracement low is below the previous low, it is a reversal signal; in a downward trend, if the rebound high is above the previous high, it is a reversal signal.
I mainly use a combination of multiple methods such as previous highs and lows, key prices, moving averages, and trend lines to comprehensively judge support and resistance levels, with the resonance point of different methods being the most reliable.
Six, advice for friends who are still struggling.
Looking back over the past decade, my deepest realization is that the key to success in the cryptocurrency world is not technology, but mentality and discipline. No matter how good a trading system is, if there is no execution power, it is just an illusion.
If you are currently in a state of loss and confusion, I have a few suggestions:
Invest with spare money: Never borrow money to trade cryptocurrencies; only use funds that you can afford to lose completely.
Continuous learning: In the cryptocurrency world, 'A day is like a year in the human world'; without learning, one will be eliminated. To this day, I still spend 1 hour a day studying the market and new technologies.
Establish your own trading system: Do not blindly follow the crowd; create a stable trading system that suits you.
Maintain patience: the market is never short of opportunities, but lacks the patience to wait for them. Do not lose balance because of missing one or two opportunities.
The door to the cryptocurrency world is always open, as long as you can maintain strict self-discipline and follow the trend. Not only can you survive in the market, but you can also achieve wealth growth. I hope my experiences can inspire you, and may you take fewer detours on your cryptocurrency journey and move towards success!
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