Surviving in the cryptocurrency world relies not on intelligence, but on discipline
Dear cryptocurrency friends, I am an experienced trader in this field, and I am 37 years old this year. Ten years ago, I entered the cryptocurrency market with only 50,000 yuan, and now my assets have exceeded 50 million. Over the years, I have witnessed too many myths of overnight wealth, as well as more tragedies of losing everything.
Today, I want to share the experience I gained through hard-earned money: the dumbest method of trading cryptocurrencies is often the most profitable. The following 'three things not to do' and 'six rules' may not seem as sophisticated as some 'masters' secrets, but they can help you survive longer in this market.
Three things I absolutely won't do.
First, never chase high prices when the market is rising.
There’s an iron law in the market: when the aunties buying groceries are discussing making money from trading coins, the top is not far away. Real opportunities for profit often appear when the market is panicking and everyone is selling.
I remember during a market panic sell-off in 2023, many people cut their losses and left the market, but I boldly built my position in batches. As a result, in less than three months, my assets nearly doubled. This is a real-life example of 'when others are fearful, I am greedy'. Chasing highs and cutting losses is human nature, but operating against human nature is the key to profit.
Second, never bet on a single coin.
Putting all funds into one coin is like handing your fate over to luck. The cryptocurrency market is extremely volatile, and even the most promising projects can be halved due to a tweet or a policy change.
My principle is: no single coin position should exceed 30% of total funds. Diversifying investments is not to earn the most, but to survive the longest.
Third, never operate with a full position.
Being fully invested means you lose flexibility and can only leave your fate to chance. What the market lacks is not opportunities, but the capital to seize those opportunities.
I always keep about 30% cash, so that I have the chips to buy the dip when the market crashes. Remember, position determines mindset; those fully invested can never withstand a pullback.
Six golden rules for short-term trading.
1. Wait for the breakout after high-level consolidation.
After high-level consolidation, there is often a new high, and after low-level consolidation, there is often a new low. Don't predict market direction; wait for the breakout direction to become clear before taking action.
2. Do not trade during sideways phases.
Data shows that 80% of liquidations occur during sideways periods. When the market is sideways, the direction is unclear, and frequent trading can easily get you washed out. Real hunters know how to wait until the trend is clear before taking action.
3. Buy on bearish candles, sell on bullish candles.
This is a classic contrarian thinking strategy. Buy when the market closes with a bearish candle and emotions are panicked; sell when the market closes with a bullish candle and emotions are optimistic. This can help you avoid the trap of chasing highs and cutting losses.
4. The speed of decline determines the strength of the rebound.
The faster the crash, the stronger the rebound. In a slow downward trend, the rebound is often weaker. Judging the rebound strength based on the speed of the decline can help you better grasp the entry timing.
5. Pyramid-style position building.
Buy in batches when prices drop, like a pyramid with a larger base and a smaller top. For example, if the coin price drops by 10%, increase your position by 10%, which can effectively lower your average cost.
6. After sideways movement, a breakout is inevitable.
A currency that continues to rise and fall will inevitably enter a sideways consolidation. At this time, there is no need to sell everything at a high point, nor buy everything at a low point. The key is to watch the breakout direction: decisively clear positions when breaking down from a high level.
My practical insights.
After ten years of trading coins, my biggest insight is: strategy first, mindset second, and technique only third.
I used to be a believer in technical analysis, obsessed with various indicators and charts. But now I understand that simple methods repeated are more effective than complex methods.
I currently focus on two indicators: the 60-day moving average to determine the bull-bear divide, and the RSI to gauge overbought and oversold conditions. If it breaks below the 60-day moving average, stay out for three months; if the RSI exceeds 80, be wary of risks, and if it drops below 30, consider building a position.
Risk control always comes first. I have set an iron rule for myself: no single trade should lose more than 5% of total funds, and profits should be withdrawn regularly without reinvesting all profits back into the market.
The cryptocurrency market is not a casino. Treat trading like a job, trade according to plan every day, shut down on time, eat when it's time, sleep when it's time, and you will find that you can earn money more steadily.
These methods may seem simple, but the challenge lies in persistence. The cryptocurrency market is not short of smart people, but it lacks disciplined 'fools'.
Trading coins is not about who makes money faster, but about who survives longer. I hope my experience can help you avoid detours and survive in the cryptocurrency market for a long time.
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