System advantage in the cryptocurrency world

18 Dec 2022

The trading system does not have advantages and is not based on market behavior. Various behaviors such as commission, trading slippage, and pin insertion will increase the cost of investors rapidly. In this market, it is important to grasp the advantages of trading and grasp the appropriate entry points. It is necessary to use data analysis and theoretical trading methods and learn how to build your own system trading model.

Step1 : Building a Trader's Own Trading Model

Normally the cryptocurrency circle trading system generally covers entry strategy, portfolio tools, exit strategies in three aspects .When speculators consider market entry strategies, they actually consider various possible situations and coping strategies after entering the market. The entry of the currency circle into the market is only the beginning of the gambling game. When entering the market, traders or speculators have the basis for making money. When the exit strategy is implemented, the currency market behavior after the exit will no longer have any impact on investors, and only what happens in the process of participating in the transaction is relates to the money of the currency circle trader.

Step2 : The main control panel, learn to protect yourself

The advantage of the trading system occurs in the battlefield between buyers and sellers, while trading advantage comes from traders' cognitive disagreement and cognitive bias. Actual market participants usually do not consider rationally. The correct investment method is usually made through cognitive deviation. Trading opportunities and cognitive biases have caused traders' systematic misunderstandings. Where there are misunderstandings, there is a high probability that the advantages of systematic trading can be discovered. There are many types of investment traders in the currency circle, good and bad. Successful traders will always try to gain insight into the clues of the market. Any trading behavior that changes market orders in advance will likely appear in advance on the market. When the main capital is forced to do so, it will usually trade openly, making an order is a deterministic and probabilistic transaction. The chip bet is placed on the dominant side, and it is the correct trading behavior to exit the market in time after making a mistake.

Traditionally, top traders in the financial market usually follow the principle of "understand risk, respect risk" and don't pay attention to risk, then risk will naturally come to the door. This paragraph will analyze the common trading risks in the currency circle. In the actual process, investors in the currency circle will usually ignore this type of risks selectively.

A. Loss of funds: Constantly wrong operations have made it impossible to make stable profits in the medium and long term. If you don't reflect on the correctness of your personal trading system and trading methods, you take it for granted that luck is not on your side.

B. Excessive Seeking high return psychology: Facing the high return expectation of the coin market, constantly pursuing high interest rate varieties, and finally becoming a successor investor.

C. Platform risk: New Investors choose exchanges or wallets with opaque backgrounds, and using other gimmicks of high returns and low fees, there is a high probability of escape risk, and investors bear the principal irretrievable loss.

In addition, once the market's short- and medium-term stable trading system is well-known to most people, especially when it is sought after by large funds, the advantages of its specific strategy, such as the currency circle's arbitrage, etc., will quickly disappear. On the contrary, systems and trading strategies that are unattractive to ordinary investors have a more robust life cycle. Trend tracking is just one of the examples. Most people cannot tolerate the usual drawdowns and price fluctuations ​that are common to trend tracking strategies, this strategy is effective for a long time.

Step 3 : Be a qualified trading thinker

Everyone has different risk tolerance and expected return expectations. There is no long-term stable profit strategy in the financial market. Bankruptcy risk and principal protection are essential issues that every investor must be alert to in the currency trading process. To reduce the risk of personal bankruptcy to an acceptable level, it is of course important to limit the overall size of the position and control the risk of price volatility. Effective capital management can allow traders to survive the inevitable adversity period.

In addition to the currency circle, every industry has big logic, big trends, and clear knowledge that are well-known to the public, but what is really useful is small logic, small trends, and dark information. For example, in the workplace, why big companies and systems can’t escape the choice of sides. The reason is that the hidden logic of improving communication efficiency, organizational efficiency, and better results is hidden. This is the inevitable result of reducing organizational friction costs and reducing organizational trust costs, which is a normal phenomenon.

My own understanding is that these “dark messages ” in the workplace or in the system that have not been widely disseminated in public can help people break knowledge blind spots, think about some small logic and small trends, and after knowing it, I can let my recognition Knowledge and practice are quickly corrected, instead of sticking to the views that I thought were very correct. This is probably the characteristics of people who have life-long growth and continuous cultivation. Therefore, not only in the field of investment, but also in the workplace, in life, and in other industries, there will also be a lot of "dark information " and a higher-dimensional cognition.

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