Making money relies on luck, keeping money relies on real skills
I often get asked by fans: 'Teacher, after trading for years, why do I always lose money?' My answer is: 'It's not that you can't make money, but that you can't keep the money you've made.' This sentence may be hard for many beginners to understand, but those who have experienced the market's harsh realities will resonate deeply.
Today I want to share some heartfelt words for those who are still struggling in the market. The ones who ultimately survive in this market are not the smartest but those who can control risks.
1. Why do we always struggle to retain profits?
Have you ever had this kind of experience: once having substantial unrealized gains, only to see it vanish in an instant, even turning into losses? This is not just your problem. According to a report by the Bank for International Settlements, during turbulent times in the crypto market, large investors often cash out at the expense of small investors, leading to significant losses for many retail investors.
Why does this happen? Because we often make the following mistakes:
Overconfidence: once experiencing several consecutive profits, you may think you are a trading genius, start increasing your position size, and relax risk control.
Indecisive stop-loss: when losing money, always fantasizing about breaking even, resulting in small losses turning into big losses.
When in profit, run: rushing to secure small profits can cause you to miss out on larger market movements.
The most fatal issue is that when an account shrinks by 50%, it requires doubling to break even—this is a mathematical law, not a matter of luck. Therefore, controlling drawdowns is more important than pursuing profits.
Two, true experts are cultivating 'Account Thinking'.
I have observed that traders can be divided into three levels:
The first level is 'Coin-Based Thinking': constantly searching for the 'next hundred-fold coin,' chasing hot trends, and blindly following the crowd. This is the norm for most losers.
The second level is 'Pattern Thinking': start summarizing market rules and establishing your own trading strategies, no longer following the crowd.
The third level is 'Account Thinking': no longer focusing on the ups and downs of individual cryptocurrencies, but rather concentrating on the overall yield curve of the account and risk control. True experts operate at this level.
Experienced traders will use tools to assist in decision-making, such as using stop-loss orders, take-profit orders, and other automated tools to reduce emotional interference.
And regularly review trading logs, focusing on whether you adhered to preset rules, rather than the results of individual gains or losses.
Three, how to protect your profits?
After eight years of struggles, I have summarized several practical profit-preserving methods:
1. Profit-taking in batches strategy.
When you make a significant profit from a trade, do not reinvest all your profits back into the market. I once witnessed someone turn $500 into $400,000, only to lose it all in a single trade. The correct approach is to transfer most of the profits to stablecoins or fiat currencies, using only the principal to continue trading.
2. Set clear stop-loss and take-profit points.
Before any trade, you should clearly define the entry point, stop-loss point, and take-profit point. It is advisable to set the risk-reward ratio to at least 1:3, meaning risking 1 unit to earn 3 units of profit.
Trailing stop-loss is a good method to protect profits—when the price rises, gradually raise the stop-loss level to lock in profits.
3. Position management is the foundation of survival.
The risk of any single trade should not exceed 1-2% of the total capital. This means that even if you incur ten consecutive losses, you still have enough principal to continue trading.
Do not invest all your capital into one cryptocurrency; you can reduce risk by diversifying investments into different assets.
4. Buy during market panic and sell during euphoria.
When the market is pessimistic, and everyone is shouting 'Bitcoin is dead,' it is often a good time to buy; when the market is euphoric, and everyone is sharing profit screenshots, it is a signal to consider gradually selling.
This requires overcoming human fears and greed.
Four, trading mentality is the cornerstone of long-term profitability.
The cryptocurrency market is highly volatile, and prices can fluctuate significantly in a short period. Novice investors are easily influenced by emotions, leading to behaviors like chasing prices, panic selling, or blindly following trends.
To avoid emotional trading, you can try the 'Delayed Decision' method: after making a decision, pause your actions for 15-30 minutes of a 'cooling window.' During this time, clarify your trading logic.
Remember, daily trading is a probability game; profits come from the accumulation of long-term win rates, not from one-off lucky bursts. If you find yourself in a poor state, consider pausing trading and stepping away from the market for a few days to regain your rhythm.
Five, my views and suggestions on the current market.
With the development of the market, I believe there are several directions worth paying attention to in the future:
AI and DeFi still hold great potential, especially projects that can solve real problems; the infrastructure track will continue to generate value, especially those that enhance blockchain performance and interoperability; Bitcoin's position as a store of value will be further solidified; each major correction is an accumulation opportunity.
For beginners, I recommend avoiding frequent trading and not chasing after every hot trend. Cryptocurrency trading is harder than a regular job; 95% of traders ultimately lose money, and only 5% are winners.
Instead of blindly trading yourself, it’s better to invest in the infrastructure projects you believe in.
A few final words from the heart.
Over the past eight years, my biggest realization is that the biggest enemy in the cryptocurrency circle is not the market, but our own human weaknesses. Greed, fear, arrogance, and herd mentality—these weaknesses exist in every one of us.
To survive long-term in the market, you need to continuously 'tame' your own human nature.
Abandon greed and give up opportunities that do not belong to you.
Calmly wait for signals that you can understand and operate with composure.
Focus on the overall yield curve and do not dwell on individual gains and losses.
Trading is never about who runs faster, but rather about who survives longer. There’s no need to rush to recover losses; first learn to stand firm in the market. When you truly understand, you will realize that the cryptocurrency circle is never a casino but a place for mental cultivation.
I hope these shares can help you avoid detours. I am here, waiting for your moment of enlightenment. Follow Xiang Ge to understand more first-hand information and accurate points in the cryptocurrency circle, becoming your guide in the crypto world; learning is your greatest wealth!#加密市场反弹 #美联储降息 $ETH
