I was born in 1988, full-time cryptocurrency trader, with assets in the tens of millions. I withdraw 200,000 yuan every month from the crypto world, feeling no impact, living leisurely and freely without deceit or intrigue, living the life I want. My daily routine now is: waking up at 6:30 to run, without fail. In the morning, I generally review yesterday's trading combined with the updates from the night, adjusting based on my positions and specific situations to do swing trades or short-term trades with small funds to enhance my market feel. Then I spend 2 hours on review and summary, which is the most important task in the morning, aimed at being able to earn well in the evening! Then I write an investment article to post on Zhihu, also as a record of my trading life, so that when I grow old, I have a place to reminisce. I also like to write about investment experiences and insights, to help others and myself. From initially losing 85% to trading cryptocurrencies to support my family, I have tried almost every method. If you ask what truly helped me out of confusion, it would be the ten-character mantra I summarized, which actually applies to most people. Seeing it can definitely help avoid many detours, especially the tenth character!!!
One important word in the cryptocurrency world: Endure.
Two important words in the cryptocurrency world: Avoid greed.
Three important words in the cryptocurrency world: Maintain discipline.
Four important words in the cryptocurrency world: Rational layout.
Five important words in the cryptocurrency world: Follow the main force.
Six important words in the cryptocurrency world: Focus on value.
Seven important words in the cryptocurrency world: Do what you understand.
Eight important words in the cryptocurrency world: The market is the best teacher.
Nine important words in the cryptocurrency world: Rational, with measured advance and retreat, and strategy.
Ten important words in the cryptocurrency world: Good mindset, no hesitation, learning is endless.
I summarized how to avoid risks in the cryptocurrency world, fully realizing the risks and experiencing the challenges it brings.
After the negative consequences, one can truly pay attention to how to avoid risks. My main experience is as follows:
1. Do not go all in.
Since investment has very high uncertainty and great risks, one should not go all in! If you keep going all in, there will be a time when it will backfire. I am the best example; shortly after entering the crypto world, I continuously went all in on BTC* and BNB+ which quickly brought my account balance close to 10 million. However, later going all in on metaverse projects* and contracts* nearly cost me everything twice. The principle of not going all in is actually basic common sense in the investment field, something many investment bigwigs and books would tell you from the start, but I made this fundamental mistake. In fact, new investors usually don't go all in right away; I initially only invested 100,000. The problem is that if a small investment quickly gets a high multiplier return, the greedy urge can be unconsciously released, ultimately consuming rationality and leading one down the path of going all in.
2. Be cautious with high leverage*.
Different from going all in, leverage should be used when necessary, especially in relatively certain opportunities, particularly in major upward waves. Decisively adding leverage could potentially elevate you several steps. Those who started taking loans to speculate on housing twenty years ago belong to this category. However, leveraging is high risk among high risks; more seriously, when people generally start leveraging in a certain investment field, it must be when that field has been growing rapidly for a long time. People will see that those around them who are leveraging are making money, even making huge profits, while those who do not leverage seem out of place, holding cash or having the ability to borrow but not doing so is the biggest foolishness! In the past few decades, the Chinese real estate investment field has been just like this.
This situation will bring many blind followers investors who lack basic understanding of investment, just like I did six years ago. If you tell them about the risks of leverage, they will impatiently tell you that housing prices will definitely not drop. If you ask why, they will just say China won't let real estate prices drop. Regardless of whether Chinese real estate will drop or not, the complete unawareness of leverage risks has already pushed them to the edge of a cliff from an investment perspective. As for when and where they will fall, it may just be a matter of time! So how to be cautious with leverage? I think the most important things are:
1) Leverage in the field you are most familiar with.
First, being most familiar can lead to a better success rate, and then leveraging, for most people, is a considerable test of mindset. If you don't understand enough, it becomes even harder to stabilize your mindset, easily leading to mysterious operations, compounding mistakes.
2) Before leveraging, be sure to think carefully: Can you bear it if the worst happens?
Only when the answer is certain can you leverage! Here, you must be absolutely rational and extremely conservative; do not deceive yourself. Do not blindly follow; do not have a gambling mentality! For most people, a reliable approach may be to leverage small positions to achieve big gains!
3) Once you sense the smell of risk, immediately reduce leverage or stop-loss, even if it’s just a hint of a smell! Losing money with leverage is much more stimulating than making money with it; experiences are unforgettable! Finally, I must emphasize again that I do not encourage everyone to leverage; I am just emphasizing the risks of leverage and the issues that need attention when playing with leverage. Whether to leverage or not depends on the person. As I said earlier, leveraging is a high-risk operation within high risk, more suitable for aggressive players with strong risk tolerance. If you are not that type of player, I suggest you don't play.
In the cryptocurrency world for 10 years, the key to surviving until now is to have your discipline and strictly implement it during big drops. Today, I share the 'six great manuals' for winning in cryptocurrency trading that I have repeatedly summarized and practiced over the years. If you decide to trade cryptocurrencies for a lifetime, these six manuals are recommended to be collected and remembered.
First point: Understand stop-loss and take-profit.
We trade cryptocurrencies for trading, for speculation, not to hold forever! When you are making money, you think about making more; when you are in losses, you are unwilling to sell, and this mindset is certainly undesirable. When the trend of the position goes wrong, you need to be decisive in selling.
Second point: Do not always think about buying at low points and selling at high points.
Because the market will only have lower and higher points. Ordinary people cannot achieve this mechanism, so do not pursue so-called highs and lows. What we really need to do is to buy and sell in the bottom and top areas.
Third point: Volume and price must cooperate perfectly.
Be cautious of those positions that rise without volume or make new highs without volume. This is likely a signal that the main force cannot unload their positions, so do not chase; it is better to miss out than to make a mistake.
Fourth point: Reactions must be quick.
When an information appears, we must immediately find which beneficial sectors and companies it affects. If you can't keep up with the first tier, then we need to act timely, as the second tier will also have considerable gains.
Fifth point: Learn to take breaks.
As the saying goes, three months to see the bottom, three days to see the top. This means that the main upward wave of the known cryptocurrency price rise cycle only lasts a little while. Therefore, we need to learn to seize this main upward wave, while other times are usually for resting.
Sixth point: The biggest good news in the market is a crash.
After a drop, there is often a greater opportunity. When others are greedy, you must learn to be fearful; when others are fearful, we must be greedy. So when the market crashes, do not be afraid; at this time, we should choose quality positions and build positions in a timely manner. These six points seem simple to say, but few can truly achieve them. Why? If you cannot overcome human weaknesses, you will never earn your first ten million in life!
If you choose to speculate on cryptocurrencies, whether you will succeed is hard to say. Just like some people have experienced ups and downs in the crypto world, losing everything only to win it back again. Trading cryptocurrencies does not depend on face, education, or profession, but it tests your mindset and ability. To succeed in the crypto space, you need solid knowledge, such as mastering the internal logic of technical indicators, overcoming greed and fear, and establishing a trading system that suits you. Do a good job of capital allocation, choosing trends, timing, and opportunities, set standards for taking profits and losses, and strictly adhere to trading discipline. Trading cryptocurrencies is like venturing into the world; without strong skills, you are bound to fail. Some gain wealth and growth in the crypto space, while others get cut down. In short, trading cryptocurrencies for a lifetime, being able to stabilize profits is a success, otherwise, you need to reflect carefully. You must know the iron laws of the cryptocurrency world:
1. Asset allocation+, diversify risk.
Asset allocation is essentially to spread risk; you must not, like the various popular all-in expressions in crypto groups, bet all your bullets on a single coin. Another extreme is excessive diversification. This is a common mistake many small investors make: buying dozens of coins, rushing to the favorable coins recommended by big V, spreading the risk too thinly leads to ant-sized positions. Even if some have large gains, they actually earn very little, and when they see a few rising sharply, they start to get anxious, resulting in a series of hasty operations, only to find the average gain does not even beat Bitcoin. The ideal number of coins to hold should be around 3 to 5.
2. Think repeatedly before buying, do not be influenced by emotions.
Think about what:
Is this trade short-term, medium-term, long-term, or swing?
What if it drops after I buy?
Should I continue to average down, cut losses, or hold?
What should I do if it drops significantly?
If it rises, when should I sell?
If you do not think clearly about these issues, you are very likely to encounter the following situations.
1. Dropped a lot, did not think clearly about the stop-loss point in advance; today it dropped 20%, but couldn't bear to stop-loss, thinking it would bounce back a bit tomorrow before selling. However, tomorrow it dropped another 30%, regretting not selling yesterday, and from then on being repeatedly trapped until incurring significant losses, only then choosing to cut losses. Therefore, when buying, think carefully about the stop-loss point; as soon as the price reaches it, sell immediately. Stop-loss means admitting mistakes to avoid larger losses; gambling-style averaging down is prohibited!
2. After buying, if it falls or remains flat for a long time, and suddenly rises by dozens of points one day, sell immediately. Then, there may be a multi-day surge, and you find yourself regretting not holding correctly. Correct operation: Think clearly before buying whether this is a long-term or short-term hold. If it's long-term, then lean towards value investing. Deduce how large the market for the project you are investing in will be in the future based on its trajectory, then combine it with the fundamentals to judge what market share your investment can occupy, thus determining a possible valuation in 2-3 years. Then compare this valuation with the current price to see if it is suitable to build a position and how much growth space remains, which is the expected return on investment. If you can see this clearly, then you can average down on dips, because you are not afraid of these drops. You care about future value, and do not act until it reaches the psychological estimate point, refusing to sell on small rises! If it’s short-term, then think clearly about the buying logic of this coin: is it news-driven, narrative-driven, or a K-line technical point? Buy slowly, even slower; don't think that the price will rise if you wait a bit. When you have this mindset, you are being influenced by emotions! It's destined to go wrong. Never act rashly by chasing highs and cutting lows; think deeply before buying and prepare for all possible situations in advance to be worry-free.
3. Cherish life, stay away from contracts.
The first element of investment is risk avoidance, and playing contracts with leverage is an act of increasing risk, which should be avoided. Maybe sometimes you get lucky and gain extra returns because of leverage. But if that ignites your greed and damages your mindset, then this money will eventually be returned to the market. Most of my friends who have played contracts over the years have lost everything; in short, they earn little and lose a lot. Don't think your operations are better than others; among 100 leveraged users, it's not easy for even one to survive two years. In the bull market of 2021, shorting 519 became famous overnight, earning 30 million, but two years later, not only did they lose all their earnings, but they also piled up debts! In contract trading, you can win 10 times, but a single failure can bring you back to square one. In contracts, making money is just a process, while going to zero is the end!
4. Invest with spare money, do not borrow.
Whether in the cryptocurrency world or the stock market, any investment we make must be with spare money; we cannot use the money that must be used at home, it must be spare money. The cryptocurrency world is a market with extremely high risks, and if the money you urgently need incurs losses, the results are often very difficult to accept and will cause tremendous harm to your family. You must not borrow money to invest, as once you borrow, your risk is 100%; borrowing has costs, and if the market continues to stagnate while you are in losses and still have to repay, you will only be forced to sell at low prices! Being eliminated by the market! The cryptocurrency world is always characterized by long bear markets and short bull markets; if you borrow, you will have no place to die in the cryptocurrency world!
5. Either don't buy, or buy enough.
Many people will ambush at low positions, but when they see a rise, they will feel they bought too little, and will keep adding positions as the price rises, artificially increasing their average holding price several times. Then one day when the market turns, they find themselves trapped. This is the most taboo! To put it bluntly, it is still greed, so next time when you have a cryptocurrency you believe in, remember either don't buy or buy enough!
6. Lean towards value investing.
For some coins you find very valuable, you recognize their excellent teams, great visions, beautiful promotions, and strong R&D capabilities, then stick with them. These valuable coins should be included in your mid-to-long-term investment portfolio, allowing them to slowly turn into fine wine. Even if the price drops, do not consider panic selling; hold firmly. Let time accompany you to gradually become rich.
7. Maintain a calm mindset.
In fact, the most important thing in trading cryptocurrencies is the mindset. Many people clearly know it's not the right time to buy, but they can't resist the urge, which is a mindset problem. A few days without buying coins feels uncomfortable, and they keep lingering in various WeChat groups and big V comment sections, hoping to find the secret to getting rich. Little do they know, the more they look, the more they lose, and the more they operate, the less money they have. Haha... You must learn to control your hands, spend the most time studying, and the least time operating! Also, never chase high prices when buying coins; you must have the mindset that it rises as much as it does, treating the coin as if it doesn't exist. Only ambush valuable coins at low positions, waiting quietly for the bloom. Making money is not as difficult as imagined. Of course, trading discipline is paramount; those that can be ingrained are the core genes of making money. Many things, even if told to you, you still won't remember if you don't make any mistakes. Often at such times, you need someone else or a mentor to guide you. Trading cryptocurrencies is not that difficult, but many people always let themselves fall into misunderstandings. When I first started trading cryptocurrencies, everyone spent a lot of time and energy researching various techniques, only to find they were useless. So-called 'trading cryptocurrency secrets' are just empty talk; what really matters is mindset and discipline. Many people are greedy and, when they see a good market, desperately add positions, only to be led by market emotions. For example, my friend with small funds stubbornly chased highs and cut lows, ultimately leading to a big loss. Learn to stay out of the market, especially when the market is bad; not losing is a victory. Remember, do not blindly pursue short-term profit; patiently waiting for the right opportunity is the best strategy. I once made the mistake of frequent trading, but later realized that stabilizing the mindset is the most crucial secret. Trading cryptocurrencies is connected to life; once you understand life, you will also understand the cryptocurrency world. The principle is simple; being in harmony with knowledge and action allows you to navigate smoothly and remain undefeated! Keep following me, and I believe you will avoid many detours! I am Qing Tian, sharing only the most practical and valuable insights. If you like it, feel free to follow Yi Yan, hearing both sides will bring clarity, while only listening to one side will bring darkness, focusing on the core technology of the cryptocurrency world! When you follow me, I will give you the most genuine answers!