How dazzling is the desk lamp at 3 a.m., the tears of a cryptocurrency novice are just as scorching.
I dare to bet that as long as you've touched cryptocurrency, you've definitely experienced this scene: your eyes glued to the screen like they've been stuck with 502 glue, an ashtray piled up like a small mountain, your heart jumping up and down with the candlestick chart, one second you're secretly delighted about 'successfully bottom-fishing', and the next second the market directly gives you a dive, your account redder than the Spring Festival couplets posted during the New Year. In a flurry, you hit the stop-loss, either the system freezes or you hesitate for half a second and get stuck halfway up the mountain, wishing you could slap yourself twice: 'Why didn't I act decisively earlier?'
Don't laugh; this is not just your nightmare; it's a 'classic plot' I've acted out three times in my eight-year crypto career and seen others act out thousands of times. I’m not afraid to be mocked; early on, my account was 'burned' three times. I went from thinking 'I'm smarter than the market and can precisely gauge highs and lows' to being repeatedly ground down by the market, with tuition fees enough to cover a down payment in a second-tier city.
Over the years, I've seen many newcomers rush in with dreams of 'getting rich overnight,' only to exit in despair with 'losing all their capital.' Most do not lose due to luck but fall into these six fatal mistakes. Today, I'm sharing my heartfelt experiences; each one is a lesson I bought with real money. Understanding this can help you avoid three years of detours!
Error 1: FOMO leads to sending 'red envelopes' to the market
This is the pit that newcomers are most likely to fall into, without exception! When they see someone in the group flaunting profit screenshots, and they get a market push notification saying 'a certain cryptocurrency has skyrocketed by 50%', it instantly feels like a shot of adrenaline. The only thought in their mind is: 'If I don't buy now, it will be too late!' They don’t even look at the cryptocurrency's fundamentals or support levels, and jump in with a full position.
I made this stupid mistake in my early years; at 2 AM, I saw a certain small cryptocurrency suddenly surge, and the group was full of calls like 'Get in and eat meat.' I went all in. As soon as I bought, it started to dive, going from a 10% profit to a 30% loss in just 40 minutes. Later I found out that those making the calls were either market makers or early investors looking for someone to take over their positions.
Pitfall avoidance tips: When you encounter unusual market movements, first 'cool down' for 30 minutes. Don't let emotions make decisions for your mind. Ask yourself three questions: What is the core value of this cryptocurrency? Where is the support level? What is the maximum loss I can tolerate? If you can't answer any of the three questions, firmly do not buy.
Error 2: Not stopping losses = handing your account over to 'luck'
Many people have a sense of luck: 'Wait a bit longer, maybe it will rebound' or 'I've already lost so much, it would be too much loss to cut.' Let me tell you, in the crypto world, luck is the 'accelerator' of losses. The second time my account was 'burned' was because I didn't stop my losses; at that time, the cryptocurrency I held dropped from a 20% profit to a 10% loss. I thought it could rebound and didn't stop my losses; it dropped to a 50% loss, and I still couldn't bear to cut. In the end, it directly fell below the issue price, and I was stuck for half a year, only able to cut and exit, with my account shrinking by 80%.
Pitfall avoidance tips: Set a stop-loss line before entering the market, such as a 10% or 15% loss, and strictly adhere to it! You can directly set automatic stop-loss orders to avoid hesitation at critical moments. Remember, a stop-loss is not a loss; it's about preserving your remaining capital. As long as you have the green mountains, there's a chance to turn the situation around. Those who tell you 'not stopping losses means you can make big money' are either newcomers or bad actors.
Error 3: Blindly bottom fishing = 'catching flying knives' halfway up the mountain
The phrase 'When others are fearful, I am greedy' is not wrong, but the premise is that you can distinguish between 'the bottom' and 'halfway up the mountain.' Many newcomers see a cryptocurrency drop by 30% and think 'the opportunity to bottom fish has come,' rushing in, only to realize after a 50% drop that what they caught wasn’t the bottom, but someone else's 'flying knife.'
I've seen the most exaggerated case of a newcomer; a certain cryptocurrency dropped from 100 to 50, and he thought he was bottom-fishing; it dropped to 30, he added to his position; it dropped to 10, still firmly believing 'a rebound is coming,' and in the end, he was completely stuck. There is no absolute bottom in the crypto world, only relative support levels.
Pitfall avoidance tips: Before bottom fishing, look at the trend. If it is a single-sided downward trend, do not bottom fish! You can wait for reversal signals like 'double bottoms' or 'bullish engulfing' before trying with a small position, rather than going all in right away. Remember, bottom fishing should be 'slow,' while chasing highs should be 'fast' (quick stop-loss).
Error 4: Staying up to watch the market = trading 'losses' for health
Those who stare at the market at 3 AM, nine out of ten end up losing. Why? Staying up late dramatically reduces your judgment, slows your reactions, and makes your emotions easier to lose control. What should have been a stop-loss is hesitated due to confusion; what shouldn't have been chased ends up being impulsive due to dizziness from staying up late. In my early years, to keep an eye on foreign markets, I got up at 2 AM for two weeks straight. As a result, not only did I lose money in my account, but I also ruined my health. After a hospital check-up, I was told I had arrhythmia, costing me thousands to recuperate.
Pitfall avoidance tips: Set up alerts and automated trading; don’t stay up late watching the market! The crypto market trades 24 hours, but your body does not operate 24 hours. Instead of staying up late to compete with the market, it's better to get a good night's sleep and be well-rested for analyzing the market the next day. Remember, if health is lost, making money becomes meaningless.
Error 5: Listening to 'rumors' = being 'harvested' as chives by others
Newcomers are most likely to believe in 'insider information' or 'big players' recommendations,' thinking that following others will make them money. I tell you, 99% of the rumors in the crypto world are false; either they are released by market makers to harvest chives, or they are deceitful individuals trying to trick you into entering the market. I once believed in so-called 'big player insider info,' and the result was that I followed in and got stuck, only to find out later that the 'big player' was just a shill for the market makers.
Pitfall avoidance tips: Only trust your own analysis and data; don't listen to any rumors! If you really want to reference others' opinions, look for those who have complete analytical logic and can provide supporting data, rather than those who just say 'buy this to make money.' Remember, real big players won't tell you the inside scoop because they fear you will snatch their chips.
Error 6: Full position operation = forcing yourself into a 'dead end'
'Fortune favors the bold' is like 'poison' in the crypto world. Many newcomers think that operating with a full position can earn more, but once they incur losses, there's no room for maneuver. The first time my account was 'burned' was due to operating with a full position; a small fluctuation caused me to get liquidated, leaving no chance to recover.
Pitfall avoidance tips: Never go all in! It is recommended to divide your position into 3-5 parts; start with a small position to test the waters, and only slowly increase your position once you confirm the trend is right. At the same time, keep enough spare funds to allow for adding to your position or re-entering in case of losses. Remember, there are many opportunities to make money in crypto, but if you lose all your capital, you can only watch opportunities slip away.
After saying so much, the core of making money in the crypto world is not 'who can make money faster,' but 'who can survive longer.' I've seen too many people who made quick profits end up giving their money back to the market; instead, those who steadily navigated and avoided these pitfalls gradually made money.
Have you ever stared at the market at 3 AM and watched your losses grow? Or have you stepped into the pitfalls mentioned above? Feel free to share your painful experiences in the comments to help others avoid these pitfalls! Follow me@帝王说币 #加密市场观察 $BTC
