Can you talk about your trading experience?

A Trader’s Journey: From Riches to Rags and Beyond

Quick to make money, quick to lose it all.

I have always failed to stop loss and emotional trading, and the pressure of life is immense.

My first pot of gold was in 2020, using the leading stock strategy, taking advantage of the bull market, from 100,000 to 2.2 million in 14 months.

The first blow-up happened in the futures market in 2021, constantly adding to a losing position in a bull market, leading to a total blow-out and even owing tens of thousands.

Subsequently, I continued with small funds, repeatedly attacking, all ending in losses.

I always experienced my capital increasing tenfold or more, only to lose everything on a single holding.

When winning, I dared to add positions to unrealized gains; when losing, I couldn’t bear the loss and held on to my positions until the trend completely destroyed my account.

I am acutely aware of my problem: I can’t effectively implement stop losses. I manage it well periodically and then lose control, indicating a poor risk management ability.

During profitable times, I did not withdraw profits, always greedily wanting to multiply my capital, leading to all my profits being on paper and even losing my initial investment.

I was active in several trading groups, some netizens considered me an enlightened master and added me on WeChat to learn, but knowing my actual capabilities, I didn’t teach them nor charged any fees, and gradually they all ignored me.

Some netizens wanted to help me, believing I could make a comeback. Someone even funded me to trade. I managed to make a new high but then lost half of the capital and stopped trading, promising to repay the lost funds in the future.

I also encountered strange netizens; using their capital, I doubled the profit, and then they deleted me from WeChat, leaving me with two months wasted and their 200,000 capital doubled. I changed the account password, withdrew the money, essentially working for free for two months.

I’ve been trading for almost 4 years and have read many trading books on both techniques and psychology, seemingly to no avail.

Over these four years, I’ve seen some traders unable to consistently profit, so they create several accounts, like five 50,000 accounts, and showcase one with an excellent performance curve over a year, then use that account for training and charge fees.

Their training fees generate hundreds of thousands, even millions, of revenue annually, and the content is simple, often repurposed from cheap online courses or even pirated versions, then repackaged.

It’s all about judging direction, discussing cycle resonance, naked K or indicator entry/exit points, some capital management, and for those who like to embellish, some trading psychology, scaling in and out, and the principles of trading. Then they use these methods to review some market conditions.

The more dedicated ones assign homework, having students trade according to set rules and steps, some students with talent and discipline perform exceptionally, even better than their teachers.

Since I couldn’t make it trading, training became a viable option. It’s not about being a scammer; it’s about sharing knowledge that, if others can apply, can be profitable.

Another option is becoming a social media influencer, attracting capital for asset management, perhaps managing millions and aiming for a stable annual return, then taking a share or management fee, like a private fund, which can be quite lucrative.

And then there’s the option of paid communities, with annual fees ranging from a few hundred to a few thousand.

In the trading industry, the smarter and harder working individuals always look for shortcuts, willing to spend a little money to gain a long-term profitable “money printer.”

Thus, the market for trading education is vast and personalized, hard to monopolize, as every trader has different preferences and styles, making any time a good time to enter the market.

Some traders repeatedly pay for multiple courses, eventually becoming overwhelmed and feeling that none can truly profit.

I have had such experiences; when trading profitably, I would pay thousands for a course without blinking, hoping to break through a plateau, only to find it repackaged and exaggerated. After losing all my capital, I continued to learn, searching for courses in various web repositories, which belonged to pirated versions, while the legitimate ones cost thousands or even tens of thousands.

My real profitable trading experiences were all about having the right direction; entry points weren’t as crucial. It was about holding positions, tolerating a 30% retracement in profits, making big gains in one go, then another big one in the next cycle, thus multiplying the account several times. It’s hard at the start, but once you double your capital, the next doubling is to four times, and so on. Some real experts can make 800% in 11 months and 1200% in the 12th month by catching a 50% gain.

The key to compounding is to avoid significant capital drawdowns and seize opportunities to step up financially.

My real losing trades were all when I was frustrated and anxious, burying my head in the sand like an ostrich, ignoring losses and holding positions. Trading felt like committing a crime, always anxious about the impending punishment, a state that was hugely detrimental to my health, feeling like I wouldn’t live long.

If there’s any tangible gain from such a roller-coaster trading experience, it’s becoming desensitized to money fluctuations. Initially, losing a few thousand felt like wasting a year’s labor, despairing of life’s prospects. Profiting a few thousand led to grand fantasies. Eventually, my psychological threshold increased to hundreds of thousands or even millions, becoming unfazed by such amounts.

This financial desensitization has a downside, making ordinary labor and its rewards uninteresting, always converting everything back to trading, which saps the motivation for steady work.

I’ve been a college graduate for four years, three of which I haven’t returned home. My classmates avoid me, fearing I’ll borrow money, though I never approached them, and they deem me a gambling addict, deliberately distancing themselves. I rent a place and cover my expenses, once using a credit card for trading capital, now long overdue on my credit, initially terrified of the repercussions, worrying about future loans for cars and houses, among other things.

As the overdue period stretched, I became indifferent; eating was more important. Being concerned about housing and cars seemed ludicrous without money.

Remaining single, I don’t want to burden a good woman.

I’ve tried various jobs, all transient, just to earn a living.

My current state is neither high nor low; if one day I do succeed in trading, life might improve. Still, I fear being too old by then, having let down myself and my family.

The life quality of a young wealthy person versus an older one is starkly different.

If trading doesn’t succeed, meager wages won’t cover debts, forcing me into delinquency. If I can turn around, I’ll repay the bank; borrowing and repaying is only natural.

In dire straits, I’d forsake morality. Many wealthy individuals haven’t created wealth; they’ve borrowed from banks, pocketed some for personal use, and then defaulted, becoming untouchable debtors.

Much technical analysis is about discerning the patterns and movements of money, following the so-called trend for speculation.

Fundamental analysis is based on environmental and data conditions, engaging in left-side trading, bottom-fishing, and top-picking for value investment.

My future trading plan is to engage in value speculation in the futures market, combining technical and fundamental analysis with a core focus on capital management, or “light positions are invincible,” avoiding blow-ups and employing martingale strategies.

In foreign gold markets, I plan to use a box range breakout strategy, setting losses quantitatively for speculation.

Over 2-3 years, I aim to demonstrate my account’s profitability to attract followers and then create a community, earning from members. Why not conduct courses? Because courses don’t translate into real-time market analysis and trade setups that a community can offer. Letting members earn money makes it easier for them to renew their subscription next year. For example, if someone earns 100,000 from an initial 100,000 capital, paying 2,000, or 2%, is just a stop loss for them. The more they earn, the more willing they are to pay, enabling sustainable growth beneficial for all.

Isn’t there a theory about having 1,000 true fans? If you have 1,000 loyal paying fans, you can live comfortably in any industry.

Getting 1,000 is tough, so I’ll aim for 100. If I can lead 100 people to consistently earn money, their subscription fees will provide a comfortable income.

This stable income isn’t about the amount; it’s about peace of mind, stability, and a sense of achievement, feeling needed and participating in society.

I’ve already started writing on Zhihu, preparing for this future. If my trading takes off, I’ll have income and influence from social media. If it doesn’t, whatever I write in the coming years will at least have been good practice in expressing myself rather than wasting time on games and short videos.

I got in touch with giants in the manufacturing industry and experts in raw materials. After visiting mines in Africa and comparing them to those in Australia, I understood what on-site and off-site trading really means. I also realized that the biggest airdrop is the manufacturer.

I began to grasp the importance of macroeconomic fundamentals (but in practice, the power plays among family fortunes and nations can constantly change these fundamentals).

Then, you discover that it’s all insider trading. It’s just that the performance is more convincing (and you can’t find a reason for the insider trading). However, amidst various uncontrollable factors, I came to understand my own position.

Phases of My Trading Journey

1. The Ignorant Phase: When I first entered the stock market in 2008, I didn’t know much about trading. During this phase, I was cautious, and I often made small profits.

2. The Learning Phase: In this stage, I was constantly learning and experimenting with various trading methods and strategies. However, I lacked a clear direction and often made mistakes.

3. The Awakening Phase: It was during this phase that I started refining my own trading system and had moments of clarity.

4. Formation of a Trading System: After years of development, my trading system took shape, and I began to move away from being a novice trader. It was a period of both gains and losses. Making consistent profits in trading is challenging, and only a few succeed. Trading large sums of money solely with a trading system is not feasible.

5. Cognitive Enhancement Phase: I realized that the previous phases were just the basics. Understanding market trends accurately required continuous improvement in technical analysis, fundamental analysis, and macroeconomic analysis. If you can accurately predict trends and manage your positions well, you can make profits even without a trading system. However, having a trading system can still be beneficial as an auxiliary tool.

6. Phases Six, Seven, Eight, etc.: I haven’t experienced these phases yet, and I don’t know what lies ahead.

Continuous learning and adaptation are essential in the world of trading. Each phase brings its challenges and lessons, and success in trading is a journey that requires perseverance and constant improvement.

Seeking wealth transforms into seeking the path.

I’ve been writing all along. It’s a history of struggle, not something that can be summed up in a sentence or two.

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Many new friends who are just starting to trade often do this: they disdainfully dismiss others' bad trading experiences, and they question excellent results when they see them! This is one of the main reasons why many bloggers are reluctant to honestly share their own trading experiences. This video is edited by the Trading88 team.

Lose once, study the price once. Lose again, study it again. It’s just that simple – price, price, and price. Trading essentially validates how well you understand the price.

My trading experience is as follows: It took me two years to achieve consistent profitability, and the process wasn’t as complicated as it may seem. The only conclusion I’ve come to is that making profits in the speculative market is definitely not something you can achieve solely through hard work. Your thought process and logic must be different from the average person, and you must possess a naturally gifted talent!

My Understanding of Ponzi Schemes and Investment Schemes

In early 2016, I, along with a few friends, invested in an investment scheme called “DKC Coin.” Since it was my first experience with such a scheme, I was cautious and invested around ten thousand RMB. Investment schemes typically offer static returns along with dynamic bonuses. When I purchased DKC, the individual coin price was around 60 RMB. Due to greed, I didn’t sell even when it reached over 500 RMB. At that time, I could earn over a hundred thousand RMB in dividends every month. You can imagine how profitable those at the top of the chain were. I blame myself for being driven by greed. After it peaked and then dipped to 230 RMB, I bought more, and the scheme eventually collapsed rapidly. I lost a significant portion of my earnings. Recently, I checked the account, and the coin price had dropped significantly, but at least it still exists, while many other projects have disappeared.

Later, I dabbled in several other schemes like RuiDa, with both gains and losses. However, what truly scared me was observing the people who joined later. Their losses made me wary because I realized that I could be the next victim. So, I distanced myself from investment schemes.

You don’t need to brainwash downlines in investment schemes. Why? Because of greed! The temptation of substantial high returns is too hard for most people to resist. Furthermore, those who would typically avoid pyramid schemes suddenly embraced this “fast-moving game” as they believed they could make a profit before the scheme collapsed. This is the mentality of gamblers.

So, returning to the current bear market, aside from the fraudulent projects, many mainstream cryptocurrencies still have the potential for appreciation. However, the expectations of speculators in the cryptocurrency market are similar to those in Ponzi schemes. Everyone hopes that more people will enter the market to support their investments. This is all based on one logic: Bitcoin has surged tens of thousands of times in the last nine years, so Bitcoin or other similar cryptocurrencies will continue to rise. This is everyone’s expectation for appreciation. We all hope for the entry of large funds from the United States, Wall Street, and big tech companies (BAT). However, there is a limited number of “sheep” (new investors). If they do not enter, it will lead to a collapse of the upward expectation. The bull market ends, and the bear market begins. In a bull market, everyone makes money, but in a bear market, few people make money, and most lose money. This leads to a new question.

From the last bull market until now, where did the money in the cryptocurrency market go?

Some say it was cashed out and left the market, or the project founders made money and disappeared. Both of these scenarios are valid. However, the majority of the money evaporated. We all know that the cryptocurrency market is a zero-sum game. In traditional stock markets, companies can distribute profits to shareholders through dividends, allowing shareholders to profit. But the cryptocurrency market lacks physical assets, and profits can only be realized through new investors entering the market. This makes it inherently a zero-sum game, exacerbated by exchange fees resulting in a negative-sum game.

The money we lost in the bear market went to some profit-makers, some went to the exchanges, and a portion simply vanished into thin air. To illustrate this concept, consider an extreme example: imagine a pen is priced at 100 RMB, and no one is willing to buy it at that price. Then, someone makes an offer to buy it for 1 RMB, and the pen is sold at that price. The pen’s price is now 1 RMB. Does this mean that everyone’s assets suddenly became 1 RMB? In reality, there was only one transaction at 1 RMB, leading to the evaporation of net asset value.

Applied to Bitcoin, this means that as long as you do not cash out and leave the market, any price increase is illusory. Only when you cash out will you realize that there is not as much money available in the market for you to cash out. Real estate markets operate similarly; you cannot sell your property at the current price unless you agree to lower the price yourself. This all stems from the fact that money can “disappear into thin air."

15 Years of Trading Experience

In the first 3 years, I experienced liquidation three times.

During the following 4 years, I managed to survive without significant gains or losses.

In the last 8 years, I finally started making money. So, there’s still a chance for me to share my insights.