Basic knowledge of cryptocurrency trading

分析师木子 · 2023-11-07T06:46:26.000Z

1. Human weaknesses that are unavoidable in currency speculation Human weaknesses are innate and ubiquitous. All we can do is to fully understand and deliberately practice to avoid them. In a market like the currency circle, where leeks and sickles fly together and the market fluctuates, the weaknesses of human nature are completely exposed. It is a harvester for bankers and a money shredder for retail investors. And it's not illegal. 1. The obsession with random incentives and the addiction to low-probability events is very similar to gambling. Human nature is naturally obsessed with random rewards and low-probability events. You will always believe that you may be the right one, and you are willing to do it again and again. It’s ridiculous to believe and give so much, just to get even one reward, and never give up no matter how many times you fail. Anyone who is a little rational will avoid it and spend their energy on things that can accumulate and have long-term value. 2. Blind confidence and desire to get rich overnight Because blind confidence will make you subconsciously ignore risks and magnify returns, thus blindly advancing without respecting objective facts and obeying subjective consciousness. The desire to get rich overnight is a higher-level form of blind self-confidence, which means that this person is hopelessly self-confident. As for why you have this idea, you can refer to the discussion on the poisonous nature of the idea of getting rich suddenly. Give up this idea as soon as possible and turn around. 3. Loss aversion and emotional trading People are not gods. It is normal to judge whether there is a profit or a loss. The key is how much you make when you make a profit and how much you lose when you lose. When faced with losses, stopping loss means admitting failure in judgment and ending the battle, which is very anti-human. At this time, there is a sense of luck. For example, if you wait for a correction to reduce the loss, you will close the position. If you wait a little longer, it may reverse immediately. Even if the reverse trend further intensifies, you will increase the position to reduce costs. This is called emotion. Chemical trading is also called retaliatory trading. As a result, the position becomes heavier and heavier, the losses become larger and larger, and finally the position ends up being liquidated. 4. Be trusting of others and lack independent thinking. The brain likes to look for the shortest path to make decisions, such as listening to authority and following the public. It hopes to get advice from others, but is unwilling to think independently because thinking is too difficult and requires reading too many articles and doing Too much analysis, the result may not be correct, this is very anti-human.But are those who are authoritative and those of the masses right? The truth is often that authorities are the ones who harvest leeks, and the masses are blind leeks. If you listen to their words, you will become a leek. In short, everyone has these weaknesses. Before entering the market, take a look at yourself. 2. Core concepts of investment 1. Understanding of cycles: The medium cycle is embedded in the big cycle, and the small cycle is embedded in the medium cycle. Ordinary people can only make money in big cycles, professional investors can make money in mid-cycles, and professional speculators can make money in small cycles. After we admit that we are ordinary people, we only do big cycles, that is, cycles of 1-3 years. Adhering to fixed investment and fixed reduction is the cornerstone of investment. 2. Understand the origin of profit and loss. Money earned by luck will eventually be lost by strength. How many people have made money because of a certain random reward, and they say they are right but they don’t invest enough. Next time they increase their chips or even add leverage, only to accidentally lose everything. The so-called profit and loss come from the same source, which means that your investment gains and losses are based on the same principal. You need to decide the number of entry chips based on your risk tolerance. Don’t make too little if you make a profit, and don’t make too many if you lose, because both It's decided the moment you enter. Big investment means big profits, but it also means big losses. 3. Understand stable profits. Investment is like doing business. Profits are earned one by one, and wealth is accumulated over time. You need to make a stable profit plan based on your investment cycle, whether it is weekly, monthly or quarterly. Many people have achieved stable losses, but they still insist on trading and sending money. Remember that you can only increase your chips after you have made stable profits for a year, otherwise you will be giving away money. 4. Understand the trading system. Every transaction needs to be accompanied by a trading plan. Before starting the transaction, carefully fill in the plan form, including the opening price, multiple stop-loss points, multiple take-profit points, and position ratio. , time interval, trading reasons, review summary, etc., cooperate with technical analysis and market analysis, and form your own personal trading system over and over again. Strictly follow the system execution and continuous correction to achieve long-term stable profits. 5. There is still a huge gap between understanding the unity of knowledge and action and being able to resolutely implement it. This requires long-term anti-human training. The day when you master it is also the time of enlightenment. Obtaining wealth is as simple as breathing.

1. The inevitable human weaknesses in cryptocurrency trading
The weaknesses of human nature are innate and ubiquitous. All we can do is to fully understand and practice to avoid them. In the cryptocurrency market, where the market is full of ups and downs, the weaknesses of human nature are fully exposed. It is a harvester for bankers and a money-shredder for retail investors. And it is not illegal.
1. Obsession with random incentives and addiction to low-probability events
This is very similar to gambling. Human nature is naturally obsessed with random rewards and low-probability events. People always believe that they may be the one. They are willing to believe and pay again and again, just to get a reward even once. No matter how many times they fail, they will not give up. How ridiculous. Anyone who is a little rational will avoid it and spend their energy on things that can accumulate and have long-term value.
2. Blind self-confidence and the desire to get rich overnight
Because blind self-confidence will make you subconsciously ignore risks and magnify benefits, thus blindly advancing, not respecting objective facts, and obeying subjective consciousness. The desire to get rich overnight is a higher-level form of blind self-confidence, indicating that the person is hopelessly confident. As for why this idea comes into being, you can refer to the toxicity of the idea of ​​getting rich overnight, and give up this idea as soon as possible and turn back.
3. Loss aversion and emotional trading
People are not gods. It is normal to judge whether there are gains or losses. The key is how much you earn when you make a profit and how much you lose when you lose. When facing losses, stop loss means admitting the failure of judgment and ending the battle, which is very anti-human. At this time, people tend to take chances, such as waiting for a callback to reduce losses and then closing the position. Waiting a little longer may reverse immediately, or even increase the position to reduce costs after the reverse trend further intensifies. This is called emotional trading, also known as revenge trading. As a result, the position becomes heavier and heavier, the loss becomes greater and greater, and finally the position ends in a blowout.
4. Trusting others too much and lacking independent thinking
The brain likes to find the shortest path to make decisions, such as listening to authority, following the crowd, and hoping to get advice from others, but not willing to think independently, because thinking is too difficult, you have to read too many articles, do too much analysis, and the results may not be right, which is very anti-human. But are the authorities right, are the masses right? The truth is often that the authorities are harvesting leeks, and the masses are blind leeks. If you listen to them, you will become a leek.
In short, everyone has these weaknesses. Before entering the market, reflect on yourself first.
2. Core Concept of Investment
1. Understanding of the cycle
The medium cycle is included in the large cycle, and the small cycle is included in the medium cycle. Ordinary people can only make money in the large cycle, professional investors can make money in the medium cycle, and professional speculators can make money in the small cycle. After we admit that we are ordinary people, we only do the large cycle, that is, the cycle of 1-3 years. Adhering to fixed investment and fixed reduction is the cornerstone of investment.
2. Understanding that profits and losses come from the same source
The money earned by luck will eventually be lost by strength. How many people made money because of a random reward, and then slapped their thighs and said that they were right but invested little, so they increased their chips next time, or even added leverage, but ended up losing everything in one day. The so-called profit and loss from the same source means that your investment income and losses are based on the same principal. You need to decide how much chips to enter the market based on your risk tolerance. Don't think it's too little if you make money, and don't think it's too much if you lose, because it's all determined at the moment you enter the market. Large investment means big profits, but also means big losses.
3. Understanding of stable profits
Investing is like doing business. Profits are earned one by one. Only after a long time can wealth be accumulated. You need to make a plan for stable profits according to your investment cycle, whether it is weekly, monthly or quarterly. Many people have achieved stable losses, but they still insist on trading and giving away money. Remember that you can only increase your chips after you have stable profits for a year, otherwise you will just give away money.
4. Understanding of the trading system
Every transaction needs to be accompanied by a trading plan. Before the transaction begins, carefully fill out the plan form, including the opening price, multiple stop loss points, multiple take profit points, position ratio, time period, transaction reasons, review summary, etc., cooperate with technical analysis and market analysis, repeat over and over again, to form your own personal trading system, strictly follow the system execution and continuous correction, to achieve long-term stable profits.
5. Understanding of the unity of knowledge and action
There is still a huge gap between knowing and being able to implement it resolutely. This requires long-term anti-human training. The day when you succeed in training is also the day of enlightenment, and obtaining wealth will be as easy as breathing.