Lost to only 300,000, but relied on intraday trading to counterattack tens of millions: One million Eric's trading mentality

Mercy: Let's talk about your most dramatic experience—from $1 million to $300,000, what happened in between?

Eric: I actually earned this 1 million because of luck, when Bitcoin was all sold at a high point. What I lost was exactly the same as everyone else's. The standard leek money loss method — 17 years of project investment.

At the time, I thought that since I could make this much money, I should be able to make more, so I joined quite a few groups — I was embarrassed to say it myself. The atmosphere was very hot at the time. Even if the price retreated from a high point, everyone felt that this was only a brief correction, and the price would continue to rush to 30,000, 50,000, 70,000, 80,000, 90,000, and 100,000.

The market was more speculative then than it is now, and there are various ICO leaders. I just invested with everyone. My older brother invests in whatever project he submits; when he invests money, it's gone.

I stepped on the pit twice in total. The first time was to invest in a project, and the second time was to invest in a token. At the time, the project owner invited us to dinner and said that he and his team all came from BAT to work on a public chain project. They will continue to develop even when the market is bad. So I gave them money again, and as a result, it went online and it went to zero.

These two things suddenly made me realize that I don't understand this market at all. If I wanted to compete or make money, I had no advantage at all; the money I earned before was all due to luck.

As soon as this perception changed, I knew that if I wanted to make money in this market, I had to abandon my previous perceptions and ideas and learn how to trade from scratch.

Mercy: How has your experience with US equity proprietary funds changed your trading mindset?

Eric: The biggest benefit from the fund was breaking through the ceiling of my trading level. In fact, when I started trading, I was like everyone else. I joined various groups to find big brothers and learned a little bit about everything — a little bit of news, fundamentals, and technical analysis.

I was already able to make a profit at the time, but I clearly felt that the ceiling was there, and I couldn't break through it. It's like being able to pass the 211 or 985 exam, but if you want to get to double the top and better universities, you won't be able to break through. After I went to the Proprietary Fund, and I was more self-disciplined, studious, and acted according to logic, I broke through this ceiling.

Mercy: What do you think is the biggest difference between institutional traders and individual traders?

Eric: This is a really big question. I'm talking about the most obvious and counterintuitive point: institutional traders never predict the market.

• What we do is what is happening in the market, then find coping strategies to make money in the market from the two dimensions of odds and probability.

• However, individual traders think every day about whether there is a simple, straightforward set of logic that tells me that if I know about A, I will definitely get B's results, or it will definitely make me profit.

I often get the question: “Will this evening rise or fall? When will it rise to what position?” This kind of question to me is like asking “When will the Earth explode and when will humans die”.

Why are you asking this question? Because in the absence of a trading strategy, you don't have the craftsmanship you can take advantage of, in the face of a highly speculative market, you must be emotionally driven. Emotionally driven thinking will want to get the easiest and easiest to understand idea within the scope of ordinary people's perception—when to rise and when to fall.

Mercy: If you could sum up your trading ideas in one sentence, what would you say?

Eric: Look at the big picture and do the little things.

Looking at the overall situation and doing small things means that the industry is developing. Overall, although there are imperfections and various problems, the industry is generally developing and is being accepted step by step by mainstream institutions and policies at the national level.

• It's fine if you know this thing, and you know BlackRock is buying it, just know this thing.

• What affects whether you make money or not is entirely the odds and probability of each order you make.

• If you don't do a good job with odds and probabilities, it's useless to know even more; it only turns you into an analyst who knows everything but doesn't make a profit.

For example, you can always hear people in the market saying they want a pattern and need to look further, how is BlackRock, how is the on-chain data, and how are institutional traders. You'll find that these theories are straightforward. They understand everything like Beijing taxi drivers, but they won't do it when they get down to earth and make a list.

Mercy: Many ordinary traders are easily influenced by one-sided information. For example, when they hear that interest rates are cut in September, they think they will definitely rise. What do you think?

Eric: This is the basic perception of a standard person without systematic intensive training. If you ask artificial intelligence now, it will tell you a lot of factors affecting prices. You will find that a specific message is sometimes positively correlated, sometimes negatively correlated, and sometimes has no relationship.

For us, we never read news. My boss even said, “When I retire, I'll work as a financial self-media and analyze the market every day, because you can't pick out where I'm wrong.”

We're not going to explain why it's rising or falling; we're just explaining what the probability is, what the odds are, and whether to participate if this target is to rise. If you don't have probabilities and no odds, just don't do it.

Mercy: How should we understand the phrase “the market is regular, but the market is unpredictable”?

Eric: These are two different levels of perspective.

• The market has rules; you stand in a large time level window and price frame. For example, if you open the K line, pull out a moving average, and put it in the daily level window, you'll find a very simple rule: the price should rise above the moving average, the price fluctuates around the moving average, and the price falls below the moving average.

• Unpredictable markets mean that you're on a micro level. For example, if you say, “Boss Wang, will it rise or fall tonight? Take me an order. My monthly salary will go up and make an order with you.”

For me, it's “I have no idea what is going on in the market.”

But take a different dimension and ask, “Boss Wang, what kind of position is he in, what kind of order do he make, and the odds and win rate are relatively high?” I can answer that question for you.

It's like you don't know where rabbits are, but by observing, you know that next to that tree stump there's a better chance of catching rabbits in the past month. You know there's a rabbit nest next to the stump, so you're more likely to catch rabbits, but that doesn't guarantee when you'll be able to catch rabbits this morning, evening, or in the middle of the night.

Mercy: How do you use spot and contract together?

Eric: For me now, the contract keeps me in touch and keeps me sensitive to the market. Sometimes I even deliberately make huge orders, so I can take the initiative to reveal what problems I have in my transactions and where my blind spots are. Losing money for me is just letting me know how many pounds or two I weigh.

And for me, spot is about being able to better handle the problems revealed by the contract.

When I lost 30w dollars, I felt that I didn't understand the contract, leverage, and mess at all. I could clearly feel that this stuff was risky. I couldn't do it casually; I couldn't do it at will; if I did 300,000 more, it was gone.

After that, I started only doing spot goods. At the time, I first made Ripple (XRP), which was cheaper. I've experienced traditional technical analysis — falling when pressure hits and rising when support is hit. Learn in the process and verify your own logic from a stock perspective.

One day on the train, I suddenly realized that I had crossed the most basic threshold and that I should train more. What I discovered was not that the technology was good enough to make money, but rather that more deliberate practice was needed. So, the contract was made from there.

I often emphasize the risk of contracts. The risk of each fund should be controlled at 1%-2% of the total capital. This total capital is the capital of your trading account, not all of your assets.

Whether you want to make that list is not what many retail investors think; if you see an opportunity, just turn on your phone and do whatever you want. Instead, in order to wait for that opportunity, you probably won't be able to do anything for two or three hours, so you'll have to wait and wait for the rabbit mentality. Whether the price can reach your position, you need to observe how the price reaches your position, and at the same time observe whether there are any key signals before you can place an order.

This is a very difficult requirement; you still can't predict how the market will react after the price. However, in terms of spot goods, you can place a 5%-10% stop loss; the level of difficulty is not the same.

Mercy: Can you share an example of accurate forecasting that impressed you the most?

Eric: The deepest one was two, once with OKB and once with Bitcoin.

OKB case: The highest price hit 250 at the time. When the price was still 228 or 238 at the time, my market data showed that the 239.48 position was enough to statistically influence the price trend later.

Looking at the current results, after the OKB price reached that large selling order at the time, the price retraced 20% and then rose again, but did not structurally break through a new high; it only fell after rising 5, 6, 7, or 8% from that large selling order position.

Bitcoin case: April 7 and 8 this year. At the time, our market data showed that someone opened positions at 78000 or 79000. Before the price dropped to that point at the time, I already knew that there were people who wanted to do it in this place, and I was ready to make an order with these people. There is no doubt that it was an increase from 78,000 at the time until today.

But I want to emphasize that I don't know who actually paid the price at the time, and I have no choice — I'm Boss Wang, not Master Wang, a fortune teller.

What I can analyze is that having an order in that position is enough to influence the price trend. If you want to use this signal as an order, it's not that you just wait without any risk control after entering, but you have to have a calculation process.

• As a first step, you have to rule out that position and not be able to do anything on the list. You can't go long where there are pending orders that affect the price trend; isn't that equivalent to shorting at the lowest point?

• In the second step, having such a position and such an order affects the price trend. How did it reach this position before the price arrived? After arriving, there is a calculation process for how to combine price patterns and key signals to make this order, as well as how much to make and how much to stop loss.

• As long as there is such a calculation process, your risk is manageable. The risk is manageable, and the odds are advantageous. In the long run, if you continue to place orders according to this logic, you can not predict the market, but in the end, you can still make money.

Mercy: Looking at it now, does profit depend on luck, skill, or mentality?

Eric: From my point of view, I think it's luck, mentality — knowing how many pounds you weigh, choosing to follow a path that few people walk and is particularly difficult.

If you want to pull it up a bit, for everyone: it's actually an arithmetic problem.

When you start trading, you can understand the accounts of this matter, know why you are making money and why you are losing, and after a lot of deliberate practice, you can make money.

Once you make money, if you want to make more money, it becomes a matter of mentality. For example, some people's mentality is not suitable for the short term; it is only suitable for bands or trends

Going one step further, when the scale of capital is larger, it becomes a mathematical problem because it involves capital management and risk allocation.

At the end of the day, when the amount of money was greater, it became a philosophical question again.

You'll wonder if the money I've earned is like the saying “one life, two fortunes, three feng shui, four accumulations of bad, five books”?

Mercy: As a newbie, what are the most common mistakes you should avoid when learning to trade?

Eric: It's easy to offend this question, but I have to say it anyway.

You can get a lot of information in this market. It won't tell you how much to lose and how much return you can make, but only tell you how to make money today, make tomorrow, make big money small, earn early and late, make a down payment today, and earn Land Rover tomorrow.

Most people teach you the information. Whether it's their teaching or analyzing framework logic, there's no computational logic in it.

Let's do a simple math problem: How much money would you make if you lose 10%? Most people instinctively answer 10%, but in reality you lose 10% and your principal amount becomes 9,000. To get back to 10,000, you need to earn 11.1%. You lose 50% and you have to earn 100% to get back your capital.

The efficiency of losing money is not the same as making money — losing money is like an avalanche, and making money is like climbing a mountain.

Therefore, a common learning mistake for newbies is that you must choose strategies and logic that can be explained by arithmetic as a channel to obtain information. If it can't be explained by arithmetic, you have to take it easy; if it's a beautiful story, it's probably a Ponzi scheme.

Mercy: Can you give a word to young traders, especially those who are experiencing losses?

Eric: Keep your guard up and wait until the day comes.

To put it bluntly, these eight words are: do what you have to do, don't think about taking shortcuts. In the speculative market, in the long run, everyone who takes shortcuts will end up taking a ramp or crooked path. The only shortcut in trading is if you don't take shortcuts, do what you have to do, and make every order.

Don't use one, two, three, or four transactions to understand the market, look at the market, or look at yourself; instead, find a strategy of your own to form a statistical advantage.

This statistically superior win rate doesn't need to be particularly high. For example, you've found a strategy with only a 52% win rate, and the profit to loss ratio is 2:1, which sounds a bit counterintuitive — how can a 52% win rate and 2:1 profit/loss ratio strategy make money?

In fact, if you have a 53%, 54%, and 55% win ratio strategy, and a 2:1 profit and loss ratio strategy, you'll find that you've been able to make amazing money.

“Waiting for the weather” is just waiting for the market. You make money in this market. Your own efforts are on one side, but all the money you earn is due to the market or not to give you face. If the market doesn't give you face, it keeps fluctuating in a narrow range, and no matter how hard you try, it's no use. However, the market is here. Your basic skills are solid and in place, and you can calculate every risk; in fact, the market will start up in one round.

Conclusion: The only shortcut is not to take a shortcut

Eric: I didn't follow the right path in this speculative market from the beginning; I was scammed twice, but I adjusted my perspective on the market in a timely manner and embarked on a path that few people took -- getting down to the bottom of every step, making the list to be done, and finally caught the market and earned today's amount of capital.

The logic I want to tell everyone is that if you want to earn your share of the profit in the market, the only shortcut is not to take shortcuts — you have to spend time honing.

In the speculative market, don't run for money first, but use it as a skill. How do you design your own deliberate training and extensive continuous practice process, eventually the market will definitely pay you back.

It took me about a year and a half from learning to being able to make money, and over three years from being able to trade to being able to make the profit I wanted. The process was painful, but it was worth it.

Remember, the market is fair, and it won't favor you because of your education, background, or luck. But it rewards those who really learn, implement rigorously, and continuously improve.