Introduction
First, I want to express my gratitude to J and L from BingX for their invaluable insights and advice. While I cannot reveal their identities for privacy reasons, their help has played a significant role in my decision to choose BingX. Out of all the available CEX exchanges, I chose BingX, driven by the principle that proper selection outweighs sheer effort. Please note that this article does not constitute investment advice, as everyone is aware of the risks involved. Let’s skip the disclaimers and focus on the main point—selection is far more important than effort.
Trading is a continuous cycle of decision-making: what to invest in, when to buy, and when to exit. These are decisions that can make or break your strategy. One key distinction between cryptocurrency and traditional stocks is that crypto requires quicker decision-making.
Your choices in different market conditions can lead to very different outcomes. For instance, in times of uncertainty, the best strategy might be to minimize losses. But the majority, especially 99% of office workers, will continue to trade, hoping to make a profit. When market conditions aren’t favorable, opposing the market often results in losses.
The key to making $1 million is making the right choices—and doing so quickly.
1. Selection Over Effort: The First Step to $1 Million – Choosing the Right Coin
In crypto spot trading, there are three categories: 1. Bitcoin, 2. Altcoins, and 3. Meme coins.
How do you choose? The right coin selection can make a huge difference. Many traders fall into common misconceptions, leading to significant losses:
- They believe crypto can make them rich overnight and, seeing Bitcoin’s slow growth, switch to altcoins. When altcoins fail to deliver the expected returns, they turn to meme coins, which are even more volatile. In the end, they end up trading everything and losing it all.
- An influencer claims to have made millions from meme coins and others blindly follow, only to face heavy losses.
Statistics show that over 80% of crypto traders lose money due to poor coin selection.
Bitcoin, altcoins, and meme coins differ in terms of risk: Bitcoin < Altcoins < Meme Coins. These risks are unavoidable, and it’s crucial for traders to assess their own risk tolerance before making any choices. Self-awareness is key.
1.1 Risk Tolerance: Know Your Limits
If you have a low tolerance for risk, you will feel extreme discomfort and anxiety when faced with market volatility. Exceeding your risk tolerance may lead to emotional decisions, which increase the probability of losses.
Can you trade beyond your risk tolerance? Yes, but only if there’s a high chance of success (over 60%).
Once you make a decision, it’s irreversible. You must prepare for the worst—losing all your capital. For example, if your risk tolerance is $1,000, you should be ready to lose that amount if you invest in high-risk meme coins.
Many traders think they can turn $1,000 into millions but fail to handle the stress of losing it all. If you’re prepared for the worst-case scenario, borrowing money to keep trading is common.
Traders often borrow not because they lost everything, but because they want to leverage their prior profits.
1.2 The Right Path: Bitcoin < Altcoins < Meme Coins
The level of risk associated with Bitcoin, altcoins, and meme coins depends on the kind of information you can access. Where do you get your information?
- If you have relationships with hedge fund managers or other influential figures, trading altcoins could prove to be highly profitable.
- If you are friends with influential KOLs or even famous people like Elon Musk, trading meme coins might be a good option. Note: These must be real connections, not just social media follows.
Why are connections important? They provide you with insider information before it becomes public.
If you, like me, lack those kinds of connections, the best option is to allocate 80% of your portfolio to Bitcoin and focus on market analysis.
I find platforms like Binance Plaza inefficient—they are filled with distractions. Instead, I focus on analyzing the Bitcoin price on BingX for a quick understanding of the market trend.
This approach is about making money, not wasting time.
2. Selection Over Effort: The Second Step to $1 Million – Timing
While some believe that Bitcoin follows a four-year cycle, this idea is a misconception. The likelihood of perfectly timing the market is just 0.06%.
So why does Bitcoin seem to follow a four-year pattern? It’s not due to mining halving—it’s the liquidity, often referred to as “hot money.”
Every four years, U.S. elections inject liquidity into the market, artificially inflating asset values to satisfy voters. This creates a predictable cycle of market growth and decline.
The key to market timing is understanding when liquidity flows in and out of the market—that’s the heart of investing.
2.1 The Impact of Liquidity on Timing
Markets are driven by people, and people’s actions are complex. Instead of trying to analyze each individual, it’s much more effective to observe the flow of liquidity.
Meme coins often surge in value because they act like balloons that rapidly inflate when liquidity enters the market. However, every financial crisis has been triggered by these balloons bursting due to excess liquidity.
Knowing when the market will expand or contract is the key to good timing. I prefer to use platforms like BingX, which do the heavy lifting by researching coins before listing them.
Even with research, altcoins can still crash. That’s why position management is crucial—limiting exposure to new coins and using automatic buy/sell orders.
3. Selection Over Effort: The Third Step to $1 Million – Position Sizing
Position sizing is essential to making wise trading decisions—it reflects your ability to manage risk.
Many traders fail because their final actions contradict their original strategy. For example, an investor with a $1,000 risk tolerance might put all of it into high-risk meme coins, treating it like a gamble.
Position sizing is about understanding how much risk you can tolerate. If you’re comfortable with 100 losses, then you should risk only $10 per trade.
Since predicting short-term price movements is tough, Copy Trading is a great strategy to mitigate risk. I tried several platforms, but after testing out different options, I returned to BingX because of its pioneering Copy Trading feature.
Top 5 Exchanges
1. Coinbase: Fast bank transfers but high fees.
2. Binance: Struggling with regulatory pressures.
3. Bybit: Strong in contracts but lacking long-term growth potential.
4. OKX: High volume, but doesn’t offer much innovation.
5. BingX: Best for coin selection and perfect timing in secondary markets.
