Watching my account balance shrink rapidly made me realize that the problem wasn't the market, but myself.
When I first entered the cryptocurrency world, I fantasized about becoming wealthy overnight, but reality dealt me a heavy blow—80% of my principal evaporated in just a few months. Watching the decimal point shift two places to the left in my account, that feeling of suffocation is still unforgettable.
At first, like most retail investors, I thought losses were due to the market being too cunning and the big players too ruthless. It wasn't until I lay flat and reviewed my trades that I suddenly realized: losing money isn't the market's fault; it's clearly my own active decision to crash into three 'guillotines'!
1 The survival dilemma of retail investors; most are destined to become victims.
Recent data is alarming: 68% of retail investors lose more than 50% in a year, and 30% of people have their principal go to zero. This is not a coincidence; it's the norm in the cryptocurrency market.
The structure of the cryptocurrency market itself places retail investors at the bottom of the food chain. You are not facing a fair game, but institutions with professional analysis teams, original shareholders of projects with extremely low costs, and exchanges that always make a profit.
Institutions have professional analysis teams and hardware advantages, which can completely crush retail investors in terms of information and operational speed. The original shareholders' cost of building positions is often a fraction of what retail investors pay, allowing them to use significant cost advantages to force retail investors to give up their chips.
What’s more brutal is that the existence of exchanges has turned what should be a zero-sum game into a negative-sum game. Each time a transaction occurs, the exchange collects transaction fees, and many exchanges engage in 'mouse warehouse behavior' and 'collusion.'
If you trade once a day, your annual transaction fee loss can reach as high as 36.5%. This means your annualized return must exceed 36.5% to avoid losing money, while Buffett's average annualized return is only about 20%.
2 The three pits I have stepped in, 80% of retail investors are making the same mistakes.
Trusting 'small group leaks' and treating rumors as the password to wealth.
My first major loss still pains me to this day. Last year, an obscure token doubled in three days, and the 'insiders' in the group shared screenshots of their 'collaboration' with a certain celebrity, claiming it would soon hit a major exchange.
Like being drugged, my mind was full of 'if I miss out, I lose a billion,' and I rushed in with my entire position. As a result, that night, there was a 'high platform diving' event, and the coin price went straight to zero, while the 'insiders' in the group had already blacklisted me.
Now I understand: real profitable information won't spread in small groups of dozens. Those who privately message you with 'exclusive scoops' are either shills or scammers.
Emotional chasing and cutting losses has made the market 'leeks the main vegetable.'
For a while, I felt like a headless fly, my eyes glued to the red and green bars on the candlestick chart. Seeing mainstream coins skyrocket, while retail investors around me flaunted their profits, I was afraid of missing out and rushed in, only to see a pullback right after I bought; during the market crash, watching my account turn green, I panicked and sold at the lowest point, only to see a rebound right after I sold.
Short-term candlesticks are just the 'ECG' drawn by the big players; it's perfectly normal for today to rise and tomorrow to fall. Big players deliberately cause fear and greed in retail investors by using the accumulation and distribution principles in the Wyckoff method, leading you to make wrong decisions at the wrong times.
The greater the leverage, the faster you die.
After I understood a bit about candlesticks, I became reckless, thinking that a small principal was too slow to earn, and insisted on using high leverage. I leveraged $20,000 to go long on mainstream coins, even calculating that 'if I win once, I double my money.' As a result, when a 3% bearish candle came down, the system directly popped up a liquidation warning, and my account balance instantly went to zero.
Leverage is a 'tool' for institutions and seasoned traders; for retail investors, it is a 'suicide knife.' 100x leverage means that if the price fluctuates by just 1%, your principal is gone. Using leverage is like handing your fate over to luck; sooner or later, you will crash.
What’s worse is that some illegal exchanges will use methods like 'pulling the plug' or 'eating customer losses' to prevent investors from closing their positions, leading to liquidation.
3 Three life-saving rules to help retail investors survive in the cryptocurrency market.
Only trust officially certified information sources.
I deleted those chaotic 'insider groups' and started focusing only on official announcements from project parties, on-chain verifiable trading data, and public disclosures from regulatory agencies.
Learn to discern the fundamentals of projects: check if the white paper is easy to understand, whether the team is transparent, and if the code is active. Quality projects will fear that others cannot understand their value, while scam projects will deliberately obscure their words.
Refuse intraday speculation, focus on long-term value.
I set the candlestick chart to weekly or monthly intervals, focusing on the fundamentals of quality projects: technical implementation, ecological construction progress, and actual application scenarios.
The cryptocurrency market is a voting machine in the short term and a weighing machine in the long term. What truly makes money is not blindly speculating with daily fluctuations, but understanding the long-term trends of quality projects. Just like you wouldn’t think that because it rains today, there will never be sunny days again.
Stay away from leverage and invest with spare money.
I set a strict rule: only invest spare money, meaning money that won't affect my life if lost. Remember, encountering leverage above 10 times just once can cause you to be completely knocked out.
The cryptocurrency market is highly volatile, and no strategy can guarantee 100% profit. However, by avoiding leverage and investing within your means, you can at least ensure that you won't get kicked out by a single fluctuation.
Every time the market fluctuates, it is a process where the big players use the accumulation and distribution principles in the Wyckoff method to harvest retail investors. They create panic at the bottom to force you to sell, and create euphoria at the top to get you to buy.
Real investment is not gambling, but the realization of knowledge. When you are no longer swayed by emotions and start thinking independently, you are already above 80% of retail investors. The cryptocurrency market never lacks opportunities; it only lacks players who can survive until the end.
In this market, surviving is more important than making money. Only by first learning not to lose big can you last until the day you truly make a profit. Follow Xiang Ge to learn more firsthand information and knowledge about the cryptocurrency circle, becoming your navigator in the crypto space; learning is your greatest wealth!
