In the early hours of a certain day last November, I was staring at the ZEC price chart on the screen and almost spilled the goji berry water I had just brewed into the main case. The screenshots of the group's celebration were being sent faster than the candlestick chart, and the three-day doubling in price had many shouting 'the next thousandfold coin,' while my account balance was visibly shrinking into a joke.
As a veteran in the crypto circle for five years, I made a mistake that even a beginner would find elementary: I misread the candlestick chart. That long bullish candlestick with a long upper shadow looked to me like a signal of 'the main force luring in buyers before running away.' In a moment of excitement, I opened a short position with 10x leverage, and when I invested 10 units of principal, I had even chosen the color of the electric car in my shopping app.
As a result, the market gave me the most vivid lesson: the price not only did not drop but continued to soar like a rocket on steroids. My account changed from light green to deep green, ultimately becoming so green that it could be used as a night mode. That night, I stared at the screen and self-hypnotized: 'It's okay, this is just short-term volatility; just endure it.' At three in the morning, I couldn't hold on any longer and fell asleep. The text message at six in the morning was more diligent than my alarm clock; it wasn’t a good morning greeting, but a liquidation notice, with only 0.1 left from 10 units, not even enough to buy a cup of coffee.
I slumped in my chair, and the cat at home jumped on the table and sniffed my phone screen, disdainfully flicking its tail and leaving, probably thinking that this green interface hurt its eyes. After a painful reflection, I spent a whole day reviewing and breaking down this 'money-giving operation' into several typical mistakes, which I will share with you all today to help you avoid the pitfalls I encountered.
First, don't treat the rising leaderboard as a treasure map; it is the hallmark of retail investor harvesting. At that time, ZEC could double in three days, which itself carried a strong emotional driving attribute, with screenshots of red screens in the group and various 'get on board' slogans being essentially results of amplified emotions. During this time, retail investors are most likely to fall into the 'fear of missing out' mindset, while the main force takes advantage of this to push the price up. If you dare to short against the trend, it’s equivalent to handing your principal over to the main force as fuel. Remember, the more fervent the market, the more you need to remain calm; lively places often have no good scenery.
Second, not understanding the circulating supply, all operations are just blind guesses. Later, I found out that at that time, 70% of ZEC's circulating supply was locked, which means that there were very few tokens actually trading in the market. In this case, the main force does not need too much capital to easily push the price up, and the so-called 'K-line signals' are fundamentally unfounded. Before trading, it is essential to check the basic data of the asset, such as circulating supply, lock-up ratio, and token distribution. This information is 100 times more useful than just looking at K-lines.
Third, the cost of capital is an invisible 'bloodsucker.' At that time, I didn’t notice that the funding rate for the relevant trading pair had already dropped to -0.8%, which meant that I had to pay a fee to the bulls every day. I held on for two days, seemingly waiting for a market reversal, but in reality, I was losing money every day. The longer I held on, the more I lost. Many people only focus on price fluctuations, neglecting the hidden costs such as funding rates and transaction fees, and often, in the end, they are not defeated by the market, but rather crushed by costs.
Fourth, never think about 'shorting the top'; the top may be in a place you cannot imagine. I always thought, 'It's gone up so much, it must fall.' This thinking made two mistakes: first, judging the market with fixed thinking, and second, overestimating my ability to determine the 'top.' The emotional explosive power of the crypto market far exceeds that of traditional markets; sometimes, a crazy market can last until you doubt your life. Rationality is indeed fragile and vulnerable in the face of extreme emotions.
After this lesson, I completely adjusted my trading strategy. Now, when encountering similar frenzied markets, I will do three things: first, wait for the trading volume to decrease; when the K-line changes from 'rocket launch' to 'electrocardiogram,' consider operating after emotions have cooled down; the signals at this time are more real. Second, replace high leverage with small position options. Even if the judgment is wrong, the loss will only be the limited premium, unlike leverage that can lead to direct liquidation. Finally, keep some funds on hand; when the market is highly volatile, go buy a cup of milk tea or have a nice meal. Sweetness can cure most of the anxiety brought by trading and can also prevent impulsive wrong decisions.
In the crypto market, there has never been an operation that is 'guaranteed to make money'; there are only skills to 'survive.' When the market goes crazy, it doesn't care whether you are a novice or an experienced trader, nor does it care how well you analyze; it will only punish greed and luck in the most direct way. As ordinary traders, we don’t need to confront the market head-on, and we should not 'bumper' in front of a frenzied market.
There’s nothing wrong with being bearish; both bullish and bearish judgments are normal in trading. The key is to learn to 'dodge first, then earn.' Those who can survive in this market long-term and make money are never the ones who dare to 'reach out' the most, but rather those who understand 'when to reach out and when to pull back.'
If you have had similar 'car crash' experiences or encountered confusion in trading, please feel free to leave a comment and share. Follow me@帝王说币 #加密市场观察 $BTC
