Cryptocurrency Trading for 3 years as a second career? First, adhere to these 9 rules to avoid pitfalls, valuable insights suggestions to keep.

If you plan to stay in the coin circle for the next 3 years and want to make Cryptocurrency Trading your second career, you must understand these 9 key principles—core valuable insights to avoid losses and rationally view gains. It is recommended to save them first and read them in detail later!

1. Be wary of profit drawdowns: losing 50% is much easier than earning 100%.
Assuming you have 1 million, earning 100% will bring you to 2 million, but a subsequent loss of 50% will bring you back to 1 million. After making a profit, do not let your guard down; controlling drawdown is more important than pursuing high returns.
2. Fluctuations will incur losses: a 10% rise or fall will result in asset shrinkage.
With a principal of 1 million, whether it rises 10% first and then falls 10%, or falls 10% first and then rises 10%, it will ultimately become 990,000. Do not overlook the hidden losses caused by short-term fluctuations; frequent operations are more likely to amplify this risk.
3. Frequent operations are not cost-effective: 6 years of hassle, returns are not as good as government bonds.
With a principal of 1 million, if you repeatedly experience "earning 40% and losing 20%" every year, after 6 years you will only have 1.405 million left, with an annualized return rate of 5.83%, which is even lower than the 5-year treasury bonds. Long-term blind operations may not outperform stable wealth management.
4. "Earning 1% daily" is a trap: Ideal returns are hard to achieve.
Based on the calculation of "earning 1% daily to exit," 1 million can reach 12.032 million in 250 days, and 145 million in 500 days. However, the volatility in the cryptocurrency trading sector is severe, and "steadily earning 1% daily" is almost impossible to achieve, so do not be easily deceived by such idealized models.
5. Extreme high returns are not sustainable: 200% annualized is just theoretical.
If 1 million maintains a 200% annualized return for 5 consecutive years, it can reach 243 million after 5 years. However, such extreme returns are not sustainable in the cryptocurrency trading world and are purely theoretical assumptions, and should never be considered as actual investment expectations.
6. Don't set unrealistic goals: it's almost impossible to earn a steady 25%+ in the long term.
To turn 1 million into 10 million in 10 years, or 100 million in 20 years, a sustained annual return of 25.89% is required. However, the cryptocurrency market lacks a stable profit logic, making it extremely difficult to achieve this goal in the long term, so it is important to avoid falling into risks due to overly high expectations.
7. There are prerequisites for averaging down, and Cryptocurrency Trading itself is not legal.
Buy 10,000 of a certain coin at 10 yuan, then add another 10,000 when it falls to 5 yuan, bringing the average cost down to 6.67 yuan (not 7.5 yuan). However, the premise for adding to the position is that the coin has no delisting risk, and it must be clear: Cryptocurrency Trading in China is not protected by law, and adding to the position will only increase risk exposure.
8. "Zero-Cost Position" does not mean safety: Book value calculation ≠ actual results
After making a profit of 10% on 1 million, if you only retain 100,000 in market value chips, the holding cost will become zero, but the coin price may still drop to zero; retaining 200,000 in market value will result in a 100% paper profit, but a 50% drop will turn it from profit to loss. Do not be misled by the numbers on paper, ignoring the actual risks.
9. There are no "quality coins" in the cryptocurrency market, don't believe in "market makers supporting the price".
Cryptocurrencies lack real value support, and the so-called "quality coins" and "market makers" are often false appearances. Blindly holding during a crash will only exacerbate losses; do not fall for such erroneous judgments, and view the essence of the coin circle rationally. #BTC #美联储降息预期