In the crypto world, I have seen too many 'smart people' stumble—there's Old Zhang, who became obsessed with AI strategies and ended up with a zero balance; Old Li, who blindly trusted quantitative models but suffered heavy losses; and Little Wang, who studied candlesticks daily but was slapped in the face by the market. Where did they fail? It's not that their skills are lacking, but they forgot the first iron rule of the crypto world: stability is the only shortcut.
1. Why do 'smart people' tend to lose money?
Over-reliance on technology, ignoring human weaknesses
Many players treat trading as a pure mathematical game, eager to use algorithms to predict every fluctuation. But the truth is: no matter how accurate the model, it cannot withstand an emotional impulse. When the market crashes, fear drives people to panic sell; when it surges, greed leads them to heavily invest. This is why 90% of short-term traders will blow up their accounts within 3 months—Technology can analyze the market, but it cannot conquer the demons within..Pursuing 'high IQ operations' instead neglects the fundamentals.
For example, leveraged contracts may seem to amplify profits, but they are also 'wealth accelerators' and 'bankruptcy accelerators.' Some people double their money in a day with 100x leverage, but more people go to zero due to a single misjudgment.A day in the crypto world is like a year in the human world, but only those who live long enough can laugh in the end..
2. What is true 'stability'? Three iron rules will help you navigate bull and bear markets.
Position management: Never run out of bullets.
No single asset should exceed 20% of total assets to avoid a black swan event that can be fatal.
In a bull market, do not be fully invested; in a bear market, do not leave positions empty. At least keep 30% cash to cope with sudden fluctuations.
Example: If you have 100,000 in capital, do not open a position larger than 20,000 each time. Even if you have five consecutive losses, there is still a chance for recovery.
Strategy over prediction: Use 'stupid methods' to outperform the market.
Dollar-cost averaging (DCA): Invest a fixed amount on a fixed date each month, for example, consistently investing 1000 yuan into BTC/ETH. Over the long term, the cost will be averaged to the market level, avoiding chasing highs and selling lows.
HODLing: After selecting mainstream coins (like BTC, ETH), hold them long-term and ignore short-term noise. Bitcoin has had an annualized return of over 200% in the past 10 years, but fewer than 10% can hold it for more than 3 years.
Risk awareness: Engrain stop-losses into your DNA.
Set hard stop-loss lines (for example, must exit if a 10% loss occurs), do not hold positions, do not fantasize.
Be wary of hot coins and 'inside information'; 90% of altcoins eventually go to zero. Remember: You cannot earn money outside your understanding; money earned by luck will eventually be lost by skill.
3. My insights: The most valuable thing in the crypto world is 'proof of presence.'
Every round of bull and bear cycles eliminates a group of impatient players. Those who survive are often not the smartest, but the most disciplined. They are like old farmers—planting in spring (dollar-cost averaging in bear markets) and harvesting in autumn (taking profits in bull markets), never messing around in between.
So, if you feel confused right now, it might be helpful to ask yourself three questions:
Can my position withstand a 50% crash?
Am I impulsively trading out of fear of missing out (FOMO)?
If I liquidate my position now, can I accept the outcome?
Finally, I want to share a phrase: The market never lacks opportunities; what it lacks is surviving until the opportunity arrives. If you currently feel helpless and confused in trading, and want to learn more about the crypto world and cutting-edge information, follow me@Square-Creator-aa01419647e18 .
