Introduction
First of all, I would like to express my sincere gratitude to J and L from BingX for their invaluable assistance. Although their identities must remain anonymous, their contributions were instrumental in my decision to use BingX. After reviewing various CEX exchanges, I selected BingX, guided by the principle that making the right selection is far more important than exerting effort. This article is not meant as investment advice, a fact everyone is already aware of. Let’s skip the disclaimers and go straight to the point—selection is more important than effort.
Trading is about decision-making: choosing what to invest in, when to enter the market, and when to exit. These decisions are what drive success or failure. The primary difference between cryptocurrency and traditional stocks is that crypto requires faster decisions.
In different market conditions, your choices can yield very different outcomes. For example, when the market is uncertain, minimizing losses is often the best choice. However, the majority of people, particularly 99% of office workers, continue to trade, hoping to make a profit. But if market conditions are not in your favor, trading against the market will likely lead to losses.
The key to reaching $1 million is making the right choices—and making them quickly.
1. Selection Over Effort: The First Step to $1 Million – Coin Selection
In crypto spot trading, there are three main types: 1. Bitcoin, 2. Altcoins, and 3. Meme coins.
How do you choose the right one? Coin selection is crucial to your success. Many traders fall into common misconceptions that result in consistent losses:
- They believe crypto will make them wealthy overnight, and, seeing Bitcoin’s slow growth, they turn to altcoins. When altcoins fail, they move on to meme coins, which are even more volatile. Ultimately, they trade everything and lose everything.
- Influencers claiming to have made millions from meme coins often attract traders who blindly follow, only to face substantial losses.
Studies show that over 80% of traders in the crypto market lose money due to poor coin selection.
Bitcoin, altcoins, and meme coins differ in terms of risk: Bitcoin < Altcoins < Meme Coins. These risks are inherent, and traders must assess their own risk tolerance before making any choices. Understanding yourself is essential to making wise decisions.
1.1 Risk Tolerance: Understanding Your Comfort Zone
If you have a low risk tolerance, you may experience extreme discomfort and anxiety when the market becomes volatile. Exceeding your risk tolerance can lead to impulsive decisions and a high probability of losing money.
Is it possible to trade beyond your risk tolerance? Yes, but only if you believe there’s a greater chance of success (over 60%).
Once a decision is made, there’s no turning back. You must prepare for the worst—losing all your capital. For instance, if your risk tolerance is $1,000 and you decide to invest it all in high-risk meme coins, you must be ready to lose everything.
Many traders think they can turn $1,000 into millions, but they fail to deal with the emotional strain of losing it all. If you’re prepared for the worst-case scenario, borrowing money to continue trading is a frequent outcome.
Traders often borrow money not because they’ve lost all their capital, but because they wish to leverage profits they’ve made earlier.
1.2 Choosing the Right Path: Bitcoin < Altcoins < Meme Coins
The risk levels of Bitcoin, altcoins, and meme coins depend on the type of information available to you. So, where do you get your information?
- If you have connections with hedge fund managers or industry professionals, trading altcoins could be highly lucrative for you.
- If your network includes influential figures like KOLs or celebrities, including Elon Musk, trading meme coins could be a successful endeavor. However, these must be real personal relationships, not just people you follow online.
Why are connections important? They allow you to access insider information before it becomes public.
If you don’t have these connections, the best option is to allocate 80% of your capital to Bitcoin and use market analysis to form your own insights.
Platforms like Binance Plaza tend to be inefficient because there’s too much noise. Instead, I focus on analyzing the Bitcoin price on BingX for a quick understanding of the market’s direction.
This approach is about making the most money with the least amount of wasted time.
2. Selection Over Effort: The Second Step to $1 Million – Timing
Many believe that Bitcoin follows a fixed four-year cycle, but this is a myth. The odds of perfectly timing market cycles is just 0.06%.
So why does Bitcoin appear to follow this pattern? It’s not due to mining halving—it’s because of liquidity, also known as “hot money.”
Every four years, U.S. elections pump liquidity into the market to please voters, creating predictable cycles of asset growth and declines.
The core of market timing is understanding when liquidity enters and exits the market—this is the heart of investing.
2.1 Understanding Liquidity and Timing
Markets are driven by human behavior, and people are difficult to predict. The simplest way to approach this is by tracking liquidity.
Meme coins tend to skyrocket because they are like balloons that rapidly inflate when liquidity enters the market. However, every financial crash has been caused by these “balloons” bursting under the weight of excess liquidity.
Knowing when a balloon will expand or burst is key to timing the market. I prefer using BingX because they conduct thorough research on the coins they list.
Even well-researched altcoins can fail. That’s why position management is crucial—only allocate a small portion of your portfolio to new coins and use automatic buy/sell orders to manage risk.
3. Selection Over Effort: The Third Step to $1 Million – Position Sizing
Position sizing is a critical element in trading. It dictates how much you are willing to risk and how much you are able to lose.
Many traders lose money because their final decisions contradict their original strategy. For example, an investor with a $1,000 risk tolerance might decide to put it all into high-risk meme coins, treating it like a gamble.
Position sizing means understanding how much you can afford to lose. If you can withstand 100 losses, you should risk only $10 per trade.
Since predicting short-term price movements is very difficult, Copy Trading is a solid strategy to minimize risk. After testing various platforms, I returned to BingX because of their innovative Copy Trading feature.
Top 5 Exchanges
1. Coinbase: Fast transfers but high fees.
2. Binance: Struggling with regulatory pressures.
3. Bybit: Strong in contract trading but lacks growth potential.
4. OKX: Large volume, but lacks significant differentiation.
5. BingX: Best for coin selection and market timing.
