Last weekend at the tea house, my friend slammed his phone onto the tea tray, and the screen was filled with green resembling spilled bitter gall: "They all say spot trading is stable, but I put in 80,000, and how come I’m left with only 15,000?" Hearing this made my temples throb. As someone who has immersed myself in the crypto market for five years as an analyst, I have seen too many people fall into the trap of thinking "spot trading is safe"; he is not the first, and he certainly will not be the last.
Last year, when he just entered the market, he even came to "report" to me: "Bro, don’t worry, I only trade spot, I won’t touch leveraged contracts, I’m very stable." At that time, I advised him to learn the basic logic first, but he patted his chest and said, "The big guys in the group have already given the direction." Looking back now, that confidence back then had already laid the groundwork for his later losses.
The crypto market is never short of "excitement". He spends every day in various chat groups, where someone shouts, "This asset is about to break its previous high!" He immediately transfers 20,000 to follow the trend; then, seeing news that "it's hit a critical level, it's time to buy the dip", he chases in with another 30,000. After half a year, his account balance dropped from five digits to four digits, with no sign of profit, but he perfectly embodied the phrase "buy high, sell low". In my view, the core of losses in spot trading has never been the asset itself, but that most people fail to avoid these three deadly traps.
Trap one: treating "news groups" as a "command stick"; delayed information is the trigger for losses.
I often tell my fans: "The 'big guys' who shout signals in the group either want to cut the leeks or don’t understand themselves." Those who frequently shout that "a rise is imminent" are likely just waiting for retail investors to take over their already established positions. When you excitedly enter the market, don’t expect any profits; even an 8% drop is seen as the market being "considerate". The worst part is that when you want to sell, you can't even find a counterparty. My friend’s first substantial loss was due to believing in "insider news" and chasing a particular concept asset, only to see it drop 15% on the day he entered, and he’s been stuck ever since.
Trap two: averaging down during a decline turns into "filling the pit"; not cutting losses equals chronic suicide.
"Buying the dip to average down cost" is a common myth among many beginners, but they forget: the market never stops its downward trend just because someone is losing money. A friend of mine added 10,000 when an asset dropped 6%, then added another 10,000 when it dropped 12%, and after the third time, he faced a halving of his investment. This is a typical case of "counter-trend operation"—the more he bought, the more he lost, ultimately locking up his principal. Remember, in spot investments, cutting losses is more important than making profits. When an asset falls below the preset stop-loss line, one must decisively exit; keeping the principal intact provides a chance for recovery.
Trap three: Fully investing in a single asset; when a black swan appears, it goes to zero immediately.
Black swans in the crypto market never give advance notice. A friend of mine once poured his entire 60,000 capital into a so-called "potential asset", only for the project team to suddenly announce a delay in core functionality, resulting in a 40% drop in a single day. This is the price of not diversifying—putting all your eggs in one basket means that once the basket breaks, you won’t even have a chance to pick up the pieces. My advice is to never invest more than 30% of your total funds into a single asset; diversification is not about spreading profits, but about leaving a way out for your principal.
The core of making profits in spot trading: replace "feelings" with "strategies".
Many people think that technical analysis is unnecessary in spot trading; in fact, the K-line contains the most authentic trends. My friend used to never think while watching the market; he only understood "buy when it rises, buy more when it falls". Later, I taught him to see basic patterns: a long upper shadow indicates heavy selling pressure above, and gradually lower highs represent a clear downtrend. When the trend is unclear, doing nothing is 100 times better than acting chaotically.
Summarizing my years of experience, there are three keywords for spot trading: control position, follow trends, and stabilize mindset. Each position should not exceed 20% of total funds, only invest in assets that are in an upward trend, and secure profits of 5%-10% promptly. Last week, my friend followed this approach and diversified by buying two mainstream assets, avoiding following trends and reckless averaging down, which instead stopped his losses.
Crypto spot trading is not an "insurance box" but a "slow examination" that tests mindset and strategy. Here, trying to follow trends blindly is not as effective as making precise judgments, and persisting without reflection is not as good as timely adjustments.
The market is constantly changing, and opportunities are never lacking, but only those who are prepared can seize them. If you have also stepped into pitfalls or suffered losses in spot investments, or if you have questions about the upcoming market, feel free to leave a message in the comments. Follow me.
