Why do 90% of retail investors not survive beyond three months in the cryptocurrency market?

The snow rabbit has seen too many people.

Bull markets come in, bear markets disappear.

Accounts go from ten thousand to one hundred thousand, then from one hundred thousand to three thousand.

Either losing money, or on the way to losing money.

Today, I’ll say something that might offend people.

01 It’s not the market trapping you, it’s that you simply don’t know how to cut losses

Many people lose money, and their first reaction is: the market is too bad, the whales are too shady, the project team ran away.

But think carefully, with the same market conditions, why can some people survive?

The answer is simple:

They cut losses.

And you don’t.

What is cutting losses?

It’s not selling when you lose money, it’s actively cutting losses.

Holding on until you can’t bear the loss and then selling is called cutting meat.

Cutting losses is acknowledging your mistake and exiting before the market crashes.

Cutting meat is when your account has been halved, and you passively tear down your position with tears.

One is actively controlling losses, the other is passively accepting death.

02 The three most common stop-loss mistakes among retail investors

First: Not cutting losses, holding on stubbornly

“It’s okay, it will bounce back.”

I’ve heard this a thousand times.

Have you ever thought about why you always say this?

Because you’re gambling.

Betting it will bounce back, betting you’re right, betting that fate will be on your side.

But the market doesn’t care whether you’re right.

In 2017, Bitcoin rose to $20k, and some said it would hit $100k.

What happened? It fell all the way to $3,000.

Those who held on stubbornly saw their accounts drop 85%, and most never recovered.

Your altcoins are the same.

Drop 50%, and you think it’s the bottom.

But it can still fall another 90%.

In the crypto world, there’s no “bottom,” only “lower than you think.”

Second: Selling after a small dip, getting washed out by the market

Another extreme is too frequent stop-loss.

Market swings are normal.

You set a 5% stop-loss, but get shaken out three times.

Looking back, the price is lower than when you sold.

This is another trap: setting the stop-loss too tight.

Frequent stop-losses will slowly erode your principal until one day you find the market has indeed come, but you have no money left.

Third: After stopping loss, you can’t resist chasing in again

This is the most deadly.

Just after stopping loss, the market rebounds.

You panic, rush to buy back.

And end up chasing at the highest point.

Then you get caught again, stop-loss again.

Repeat several times, your principal is gone, and your confidence is shattered.

This isn’t trading, it’s giving away money.

03 How to cut losses scientifically?

Here are three key points:

First, set a stop-loss, don’t set a take-profit

Beginners like to set take-profit, stubbornly hold after a dip, and can’t hold after a rise.

What you should do instead is the opposite:

Let profits run when it’s rising, admit mistakes and cut losses promptly when it’s falling.

Why are institutions stronger than retail investors?

It’s not because they predict better, but because they execute stop-losses ruthlessly.

Second, set the stop-loss at key levels

It’s not enough to just pick a percentage randomly.

You need to look at support levels.

For example, if you buy BTC at $75,000, and you judge $74,000 as a strong support, set your stop-loss below that.

If it breaks $74,000, it means your judgment was wrong, get out.

If it doesn’t break, hold on.

Simple and straightforward, but effective.

Third, give yourself a cooling-off period after stopping loss

Right after stopping loss, your mindset is chaotic.

This is when impulsive trading and revenge trading are most likely.

It’s recommended to rest at least 24 hours after stopping loss.

Wait until your mindset stabilizes, then review and re-enter.

04 Say something heartfelt

Having analyzed the market for so long, my biggest feeling is:

The biggest enemy in crypto isn’t the whales, isn’t the market, it’s yourself.

You can’t control the price, but you can control your losses.

Learning to cut losses is the first step to surviving in the crypto world.

Many people think that cutting losses is admitting defeat, it’s shameful.

But I believe, cutting losses is the greatest self-discipline.

Admitting mistakes is better than saving face.

Staying alive is more important than anything.

If you find this article somewhat helpful,

I post daily morning reports and altcoin analyses on Gate, including specific order placements and stop-loss references.

If you don’t want to miss opportunities, follow me.

Snow Rabbit

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