I have been trading for so many years, and I have made some money and some have lost some money. Let me first summarize the main reasons for the losses, some of which I have also made.
Leverage is a double-edged sword. If used well, you can run faster than others; of course, on the other hand, if used poorly, you will die faster than others.
After playing with contracts for a long time, you will find that playing with spot trading becomes very simple. Many novices hope to make huge profits in a single transaction, from 10,000 to 1 million, a 100-fold increase, from 1 million to 500,000, a 50% loss, back to 1 million, it needs to double, back to 0, it only needs to double.
Therefore, novices are most likely to be self-indulgent. After making a few profits in futures trading, they think they are talented. In excitement, they go all in, but end up back to square one. Traders who really want to survive in the cryptocurrency market will never put themselves in a desperate situation. From the moment they go all in, or go heavy, they are destined to be losers. I hope that cryptocurrency friends will be sufficiently vigilant in leveraged trading!
Old players choose to wait and see when the market is uncertain about the rise and fall, and will not rush to operate. They will enter the market quickly when the trend is clear. And they also enter the market with small positions, while many ordinary retail investors operate frequently and operate with heavy positions when the market is unclear. In this way, you will continue to suffer losses, and if you encounter a fierce main force, the loss will be even greater.
Going against the medium and long-term trends and holding orders against the market trend will lead to your death.
Many people think that they lose money in futures because the trading cycle is too long, and short-term trading is fine. However, when the loss reaches a point where it is obvious that the market is going against the market and a stop loss is needed, there is always a psychological struggle: should I stop the loss? Sometimes there is always a fluke mentality that the price will come back, and the long-term contrarian order will die. What's worse, novices who don't understand the trend hope to increase their positions to average out and reduce costs. Later, as the market trend and their own positions go further and further away, but at this time the position is heavier, and they die faster. They embark on the first path of death.
That is, do not hold a heavy position or carry a single order, trade frequently, and chase rising and selling falling.
After several struggles, the amount of meat that can be cut becomes smaller and smaller, and finally there is no meat left to cut, and death occurs. Most of the reasons for losses and liquidation can be summarized into the above three types, such as being too greedy, which is basically a heavy position. See the following ten blind spots in futures trading for details.
Trading with a full position - a full position is bound to lose.
Frequent trading-lack of technical guidance.
Going against the trend----low probability and high risk.
Lock position transaction----do not accept the fact of loss.
Lowering or raising the average holding price - making a mistake on top of a mistake.
Guess the top and bottom, and don’t set a stop loss—finding excuses for mistakes.
When there is too much, there is nothing; when there is nothing, there is too much. Excessive pursuit of perfection is aimless.
Believe in news and follow trends blindly - lack of understanding of the market.
Not good at self-reflection and doubting the market, which leads to fear of market conditions.
Develop long-term trading plans—the future is uncontrollable.
Many times, trading in the cryptocurrency market is like driving on the road.
First, go to a driving school to learn how to drive. If you can drive well, but don't follow traffic regulations, you will have an accident sooner or later. Even if you drive according to traffic regulations, if you don't hit others, others will hit you. There are pitfalls everywhere, so if you want to drive safely, you must also learn to avoid pitfalls.
And what are the rules and regulations for cryptocurrency transactions?
Look at the following eight right and eight wrong things about cryptocurrency trading:
It is right to follow the trend, and wrong to go against the trend. (Once the trend is formed, it is difficult to change in a short time)
A light position is right, a heavy position is wrong----position affects attitude, and attitude affects decision-making.
Being content is right and greed is wrong -- greed is the enemy, being content is the key.
It is right to stop loss to protect profit, and it is wrong to let things take their course - protecting capital is the first priority, making money is the second.
Objective operation is right, subjective analysis is wrong. Operate objectively and follow the rules.
It is right to wait and be patient, and it is wrong to be impetuous and impulsive. Cultivate patience and take action at the right time.
It is right to increase your position when you are profitable, and it is wrong to increase your position when you are trapped. Profit is the right direction, and being trapped is the wrong direction.
It is right to be calm and composed, and it is wrong to worry about gains and losses. The essence of trading is the confrontation between human nature and mentality.
If you don't know how to screen strong coins, then I suggest you follow me. Whether it is spot or contract, a little shot may be your limit. The opportunity is short, so you must seize it! Success does not depend on luck, choice is greater than effort, and the circle determines destiny. In the currency circle, in addition to having a keen eye for judging the situation, you must also keep up with a good team and a good leader. If you follow me, you are already halfway to success in the currency circle!