Original | Liu Jiaolian
As mentioned yesterday [7.22 Teaching Chain Insider " Ethereum ETF is about to be listed, PlanB says BTC is about to skyrocket"], affected by the successive news of Biden's election and Mt.Gox compensation, the crypto market has been fluctuating and repeatedly washing, which is extremely sour.
News is a mystery. Take Biden's withdrawal from the election as an example. Why is it interpreted as good news instead of bad news?
Friends who have been following and reading the internal reference of the teaching chain should still remember that Biden clearly expressed his determination to continue to run for election after losing the debate. The market believes that if he does not withdraw from the election, the Democratic Party will not have the opportunity to introduce a stronger candidate, which will be beneficial to Trump's victory. Because Trump has turned to support encryption, Biden's continued participation in the election is good for BTC.
However, when Biden announced his withdrawal from the election, it was still interpreted as good news for BTC. The logic became that Biden's withdrawal meant Trump had a good chance of winning, and the Democratic Party would find it difficult to win by changing candidates at the last minute.
In short, from this typical case you can understand how unreliable it is to speculate in cryptocurrencies and stocks based on news.
Anyway, if the market is going to rise, then regardless of whether you withdraw from the election or not, a set of logic will be found to interpret the news as good news; conversely, if the market is going to fall, then a set of logic and rhetoric will definitely be found to interpret the same news as bad news.
For this mysterious and unpredictable chaotic system, many people, especially novices, are often led by the market, buying high and selling low, and losing more and more.
A few days ago, another reader asked, he sold his shares when BTC fell to $60,000, and BTC rebounded quickly right after the sale, and is now at 67-68k, he doesn’t know what to do?
I can understand the other party's dilemma: if they don't buy it back now, they are afraid that it will continue to rise sharply and they will buy it at a higher price in the future. If they buy it back now, they will lose money - BTC. For example, if you sell 1 BTC at 63k and buy it back at 67k, you will only have 0.94 BTC left, and you will lose 0.06 BTC.
Obviously, this was a reckless loss-making operation.
Remember: Whenever you make an operation and the market situation changes, you become confused and don’t know how to respond, it means that you have made the most fatal mistake in investment - blind action.
The so-called blind action means that before you take action, you have not thought clearly about the purpose of the operation, the execution methods, the various possible changes in the market and your response strategies, etc.
The key to avoid blind action is to set a hard rule for yourself: if you haven't thought through a foolproof plan, you'd rather not move. Holding your position without moving will at least prevent you from making big mistakes.
So what should we do if we have already made a mistake? If we make a mistake, we must stand up and take the punishment. This is the basic awareness.
Be willing to recognize that you are stupid and have made mistakes; be willing to stand at attention and take the loss as tuition, admit the loss and admit defeat; be willing to reflect deeply, know that you can only bear and make up for your mistakes, and don't expect others to give you answers or be responsible for you - if you can do these "three willingnesses", then you are a good student, and there is room for improvement and growth. If you are not willing to do these three things, and you are addicted to gambling and refuse to admit defeat, then it is better to drop out early. With this attitude, the longer you stay in the market, the more you lose.
So, how can we progress from constant losses to almost no losses, or even never losing money?
The secret is - never cut your losses.
The field of investment and speculation is full of different mental methods. Many of these mental methods contradict each other. Some mental methods even contradict themselves.
You may hear many KOL, experts or masters admonishing you to stop losses in time.
Jiaolian once had an unforgettable personal experience and a profound lesson: a certain stock was held for two years after entering the market, and then it was cut in half. So I sold it at a loss, eliminated the weak and strengthened it. Less than half a year after selling at a loss, a big market started. One year after selling at a loss, it soared tenfold. So I was completely out of the market and could never buy back the position I had sold before.
There are some truths that you will never learn without paying some unforgettable tuition fees.
Investment is a backward logic. As the Chinese proverb says, be prepared for danger. The art of war says, "More planning leads to victory, less planning leads to defeat, and what about no planning at all!"
If I can make it clear that my plan is to never cut losses, then working back from this, the moment I enter a position, I will be responsible for this purchase and this position for the rest of my life.
This forces me to choose targets carefully before building a position - targets that are worth holding on to and can be held on to forever.
This also forces me to make the most detailed considerations, the most thorough plans, and the most complete preparations before building a position and before investing any capital.
Once a position is established, you can deal with any emergency calmly.
As long as the fundamentals have not deteriorated compared to when the position was established, and even become better and stronger, then every pullback, every market panic, and every price cut are excellent opportunities to add to your position when the price falls.
Professional investors and institutions never sell at a loss. As long as the fundamentals do not deteriorate, they will just leave the losing investments and temporarily unsuccessful portfolios there and wait for them to bloom.
Never sell at a loss. The book loss is just a fictional loss and will never become an actual loss.
If you never sell at a loss, you will always keep the future profits in your hands as long as the fundamentals develop steadily.
If you never sell at a loss, you will never make the mistake of acting rashly and regret it later.
Never sell at a loss and you will never miss any market opportunity.
Never cutting your flesh is a kind of wisdom.
This is the secret to never losing money.
(Official account: Liu Jiaolian. Knowledge Planet: reply “Planet” to the official account)
(Disclaimer: The content of this article does not constitute any investment advice. Cryptocurrency is an extremely high-risk product and there is a risk of it returning to zero at any time. Please participate with caution and be responsible for your own actions.)
