When people first get into crypto, many ask: “If I want to grow my account, do I need to compound my profits?”
Compounding can make your account grow fast, but it can also make it shrink fast.
I once knew a fellow crypto trader who started with 3,000 yuan. At first, he was pretty cautious: he only reinvested his profits, and he kept his position size under control.
Later, his account grew to over 400,000 yuan. That’s when the problems started.
With more money, he got bolder. He used to take profits after making a little, but later, when the market looked good, he decided to put more on the line. His positions kept getting bigger, and he couldn’t bring himself to use stop-losses.$BTC
Then the market suddenly pulled back. He thought, “I’ll wait a little longer. It should bounce back.”
But by the time he did, he’d given back almost all the profits he’d built up.
Later, he said: “If I’d taken some money off the table first, I wouldn’t have felt so awful.”
I’ve remembered that ever since.
So I follow three rules when compounding:$ETH
1. Take some profits out.
Just because your account is up doesn’t mean the money is yours. When you hit your target, withdraw some. Don’t leave all your paper gains sitting in the market.
2. Stop after a string of losses.
After a few wrong calls in a row, it’s easy to think, “I need to make it back fast.” The more you focus on breaking even, the more likely you are to place reckless trades. Stopping is more important than forcing a trade.
3. Never go all in.
Keeping cash on hand isn’t a waste—it gives you options. You can act when an opportunity comes along, and if your judgment is wrong, you won’t lose control of the situation.
There’s nothing wrong with compounding itself.
The real danger is making money and then forgetting how you made it in the first place.
Being able to keep the money you’ve earned—that’s what really counts.
#XRP现货ETF持仓17亿美元周流入放缓
Compounding can make your account grow fast, but it can also make it shrink fast.
I once knew a fellow crypto trader who started with 3,000 yuan. At first, he was pretty cautious: he only reinvested his profits, and he kept his position size under control.
Later, his account grew to over 400,000 yuan. That’s when the problems started.
With more money, he got bolder. He used to take profits after making a little, but later, when the market looked good, he decided to put more on the line. His positions kept getting bigger, and he couldn’t bring himself to use stop-losses.$BTC
Then the market suddenly pulled back. He thought, “I’ll wait a little longer. It should bounce back.”
But by the time he did, he’d given back almost all the profits he’d built up.
Later, he said: “If I’d taken some money off the table first, I wouldn’t have felt so awful.”
I’ve remembered that ever since.
So I follow three rules when compounding:$ETH
1. Take some profits out.
Just because your account is up doesn’t mean the money is yours. When you hit your target, withdraw some. Don’t leave all your paper gains sitting in the market.
2. Stop after a string of losses.
After a few wrong calls in a row, it’s easy to think, “I need to make it back fast.” The more you focus on breaking even, the more likely you are to place reckless trades. Stopping is more important than forcing a trade.
3. Never go all in.
Keeping cash on hand isn’t a waste—it gives you options. You can act when an opportunity comes along, and if your judgment is wrong, you won’t lose control of the situation.
There’s nothing wrong with compounding itself.
The real danger is making money and then forgetting how you made it in the first place.
Being able to keep the money you’ve earned—that’s what really counts.
#XRP现货ETF持仓17亿美元周流入放缓