Source: Talk Li Talk Outside
Recently, many new partners have followed the public account of Talk Li Talk Outside, and the background also receives some new messages every day. I found that many people may have rushed into this circle, and after entering, they seem to have no patience to read the historical articles or e-books, and they like to directly ask what coins should be bought now, or ask how much XX coin will rise.
Over the past few years, I have seen too many newcomers who only entered the market during the bull market, but a large proportion of these newcomers also lost money during the bull market. In the past articles of Talk Li Talk Outside, we often expressed a point of view: for newcomers, after entering this field, they need to remember the two most important things, one is to preserve the principal, and the other is not to touch what they don't understand.
But in fact, not many people can really understand and do the above two points. Many newcomers often come with the purpose of making a lot of money in the short term, or even becoming rich overnight. Any advice that hinders their getting rich, they basically can't accept, or say, they seem to understand the theory, but in actual action, they won't execute it according to the theory.
There is actually a difference between speculation and investment. Simply put, if you enter the crypto market with the purpose of speculation, then the extent of your achievement, in addition to the element of luck, may also be related to your own ability to acquire and process information, the accumulation of knowledge in the focused field, and your personal cognitive level. If you look at the problem and participate in the market from the perspective of investment, then the key to success is more about the relatively mature investment strategy you have built based on knowledge accumulation and cognitive level.
But different people may have different backgrounds, different experiences, and different fund sizes... Therefore, there is almost no perfect strategy that suits everyone. The so-called mature investment strategy is relative. This needs to be decomposed for understanding. In this issue, we will continue to discuss two basic strategies.
1. Strategy based on time frame
This should be easy to understand. The so-called time frame means that we first need to figure out whether our investment plan is short-term or long-term.
In other words:
In your own understanding, is the short-term a few days, a few weeks, or a few months?
In your own understanding, is the long-term a few months or a few years?
Different people may have different understandings. I remember that a partner previously bought a certain Altcoin and halved it, and then he left a message to complain bitterly that the XX Altcoin he held for a long time had halved, and he felt that he could not hold it anymore, and asked me if he should cut his losses or switch positions.
I asked him: How long have you held this coin?
He said: I bought it two weeks ago.
So then I was puzzled. Apparently, holding for two weeks is already considered long-term holding for him. However, in such cases, I basically won't provide specific switching guidance. First, my personal principle is not to give any specific trading-level buying and selling guidance, secondly, I can't accurately predict the price trend of the market and any coin, and thirdly, I have no obligation to be responsible for the profit and loss of others' positions. The only advice I can give is to ask him to quickly list the three reasons why he bought this coin in the first place. If he can list them quickly and they seem convincing, then he can continue to hold patiently and see. Otherwise, he can consider reducing his position and conduct necessary review and summary.
For the time frame, my own understanding (that is, the strategy suitable for myself) is:
In the long run, I basically operate based on the bull and bear cycles, in other words, 4-5 years is a small investment cycle for me. And what I call long-term is the continuous accumulation of such small investment cycles. Taking this cycle as an example, my main operations in the past few years have actually been very simple, which is to use 80% of the position to do a 20-month (buy once a month) DCA of BTC. The specific operation has been shared in the previous articles of Talk Li Talk Outside, so I won't repeat it here.
In the short term, I basically use 6-12 months as the minimum time unit. For this short-term operation, I will mainly split 10% of the position to buy some Altcoins, but my operation frequency will also be relatively low, that is, I won't do many buying and selling operations in a year, and the number of Altcoins held at the same time will be strictly controlled within 5 types. For example, I bought a little FET on May 30, 2023, bought a little SOL on September 10, 2023, bought a little AVAX on November 12, 2023... and bought a little BANANA on August 4, 2024. These operations have been mentioned in the previous articles of Talk Li Talk Outside, so I won't go into too much detail here.
And the Altcoins I bought in the short-term operation are mainly to keep myself properly sensitive to trading, and the ultimate goal is actually to convert them all into BTC.
In short, different people may have different perspectives on the time dimension. Try to find a time frame strategy that suits you. If you are very optimistic about the future of the crypto industry and plan to invest in the long term, then what you need is patience and strict trading discipline. If you just want to speculate a little during the bull market, then don't just think about making a lot of money, but also consider how to deal with it if you lose money. It's best to find some indicators (such as MACD, Fibonacci, etc.) that can directly assist your judgment, and strictly make a profit-taking/stop-loss plan. If you don't have a high probability of success, don't leverage yourself easily.
2. Strategy based on position management
In fact, when I talked about the time frame earlier, I also mentioned my own position management again, that is, my position planning for this cycle is mainly using an 8:1:1 allocation strategy, of which 80% of the position is used for DCA of BTC, 10% of the position is used to buy Altcoins, and 10% of the position is left untouched.
I remember that in many previous articles of Talk Li Talk Outside, the advice we have always given is to allocate at least 50% of the position to BTC, and then the remaining 50% of the position can be planned according to your personal preferences. This way, even if the latter is all lost, BTC will help you cushion the bottom, so that you won't lose your principal and leave this field too early.
Especially for those newcomers who have just entered this field, many people may not have a deep understanding of the concept of risk management. As a partner said in the group before: Perhaps only after really losing money and suffering a big loss, can some people truly understand what risk management is.
Doing a good job in position management is actually the most important aspect of risk management. It's not an exaggeration to say that if you do a good job in position management, then you can talk about security awareness, wallet security and other aspects later.
Recently, there are a lot of messages in the public account, basically asking me what Altcoin should be bought now. I will reply to some of them, and I will say: If you really want to participate, you can first consider buying some BTC, and if you want to buy Altcoins, you can consider buying some ETH, SOL, or some of the top projects in the popular narratives. Whether it's a buy operation or a sell operation, it should be done in batches, not directly All In, and a profit-taking/stop-loss plan should be made.
But some partners don't seem to agree with my Tai Chi-style response and say: The coins you mentioned are too expensive, and I have a small principal, I can't afford them either. Do you have any recommendations for cheaper coins, preferably ones that can increase tenfold?
Me: The so-called "cheap" coins you mentioned do exist, such as DOGE, PEPE, WIF, but I don't know if they can rise another tenfold. Maybe a 50%-100% increase by next year is still possible.
Then the other party said again: I'm not interested in these coins with only 1x returns. Isn't the purpose of entering the crypto circle to buy coins that can increase at least 10 times? If not, why am I in the crypto circle?
Me: ......
Although I have seen many similar comments and questions, each time I see them, I still feel a bit helpless. Unfortunately, the market is not my own store, nor is it a small shop, otherwise I would not suggest bargaining for these people. In the future, if I encounter similar problems, I will not reply if I can avoid it, because replying to these questions not only wastes time, but also seems to have little practical significance.
There is another type of person who, after just entering this field, may have heard the recommendation of some teachers or KOLs, and then went all-in on some Altcoins or on-chain meme, and got trapped. They then leave a message asking me: "I'm cross margin on Altcoins and got trapped, should I switch positions? What coin should I switch to in order to break even?"
For this type of question, I am actually helpless. Apart from admiring the courage of these people to go All In on Altcoins, I have nothing else to say. The only advice I can give is: calm down and seriously think about your own position management.
There is also a group of people who, after entering this circle, were directly lured to a wild exchange and scammed, or even fell into a crypto honeypot, and then left a message asking me to help them find the corresponding scammers or project parties to get back the money they invested. For such questions, I can only say: I'm just a small blogger, I don't have that much power. If the amount of funds is small, just treat it as an "entry fee"; if the amount is large, you can go to the police, or if it's not convenient to report, it can only be regarded as a very expensive "entry fee".
So why do I always see position management as very important?
Because it directly determines whether you can make money in this field for a long time. Unless you think you are a chosen one, or you think you are a gambling god, you should plan your position carefully, don't blindly believe in the so-called eternal profit masters, don't be jealous of those who become rich overnight, and don't ask others (especially strangers to you) what coins you should buy to get rich. Anyway, in my cognitive framework, people with such ideas may still be far from truly making money in the long run.
To continue with my own example, although I also bought SOL this round, I did not choose to go cross margin or All In. Looking at the current market trend, it seems that I missed the opportunity to gain more wealth. If I had not hoarded BTC at the time, but chose to go All In on SOL, I should be feeling great now, right? But... there are no "ifs", because I had 100% confidence to hoard $20,000 in BTC at the time, but I didn't have the confidence (or courage) to go All In on $20 SOL. In other words, the best strategy is the one that suits you, not a possibility that you can't even be sure of.
Altcoins may indeed have the potential for huge short-term returns, but they often also come with huge risks. Since my risk appetite is relatively low, I have not chosen to go All In on any Altcoins in the past, and I certainly won't do so in the future. For example, in the 2021 bull market, in addition to some top projects that outperformed BTC, such as ETH which rose about 3 times the increase of BTC, and SOL which rose 79 times, the gains of many Altcoins were also quite amazing. But in the bear market, most Altcoins plummeted 85%-95% or even more. The ICP I bought for $100 last cycle even once dropped to $3, but I only bought a small position of $50,000 at the time, and later just left it alone without paying attention to it.
Although I also know that in the new bull market, the gains of some Altcoins will eventually outperform BTC, I still decided to use 80% of my position to hoard BTC. I know I will miss some bigger opportunities, but in my view, missing such potential opportunities is not the most important thing. The most important thing is to grasp the opportunities that should not be missed. Altcoins can accumulate wealth in the short term, but Bitcoin can ensure the long-term security of one's wealth, and I will always put safety first.
As for the specific position management classification, we have mentioned this topic in our previous articles, and we will not go into too much detail here. Interested readers can search and review the historical articles. Here we will only briefly review and elaborate:
- Capital over $1 million
Then safety should be the top priority, and the position management is recommended to adopt a relatively conservative approach. For example, allocate 80% of the position to projects like BTC, ETH, and SOL, and the specific allocation ratio can be adjusted based on personal preference to maintain the overall asset safety and relative stability.
Then, you can divide the remaining 20% of the position into N parts, such as $3,000-$5,000 per part, and conduct research based on your own time and energy to buy some mid- and low-cap projects for short-term trading operations. If some of the money in this part is lost, don't worry too much about it. If you make a profit, be sure to take out the profits in time, or reinvest them into the above-mentioned BTC and other positions.
After such basic configuration and operation, combined with a reasonable return target setting (don't tell me you want to make 10 times your money on BTC in one year, but if you extend the time frame to ten years, 10 times is still possible), stick to a complete cycle, and your assets should be able to easily increase to over $3-5 million. And as time goes on, pay more attention to accumulating your BTC holdings, and appropriately reduce your return multiple target to obtain longer-term asset security.
- Capital under $100,000
If your capital is between $10,000-$100,000, you can directly refer to the above examples, and the core idea is still to allocate a large proportion of your position to mainstream crypto assets like BTC.
Here we will focus on elaborating on the example of capital under $10,000:
At this time, your position management should be to evaluate the relationship between risk and return. For example, you can refer to the traditional financial concepts, and divide it into conservative, balanced, and aggressive categories.
If you are conservative, you can consider allocating 50% of your position to BTC, 30% to projects like ETH and SOL, and the remaining 20% to buy some leading project tokens in popular narratives.
If you are balanced, you can consider allocating 30% of your position to BTC, 30% to projects like ETH and SOL, and the remaining 40% to buy some leading project tokens in popular narratives.
If you are aggressive, you can consider allocating 30% of your position to BTC, 30% to projects like ETH and SOL, and the remaining 40% to buy low-cap projects, or MEME coins.
Of course, the above are just my personal examples, and you can adjust and optimize the specific proportion allocation based on your own situation. For example, if you only have $1,000, you can initially ignore BTC trading and directly research low-cap Altcoins or MEME coins, but try to avoid frequent trading on the Ethereum chain, and choose chains with low gas fees like Solana or Base instead, otherwise the frequent gas fees will consume a lot of your principal.
If you do well in this, then over a complete cycle, the overall potential (opportunity) may be 5-10 times (or even more), but at the same time, you need to control the number of coin types, and my suggestion is not to exceed 20 types, otherwise you may spend a lot of time and energy researching or following the projects. Of course, your ultimate goal should also be to implement it on BTC, and the money you earn should not be used to buy more Altcoins, but also to pay attention to accumulating your BTC holdings.
If you still don't know which category you belong to, it is recommended not to buy anything, as you may end up losing money. If you have the time and energy, you can learn more about the knowledge or concepts in the crypto field, or participate in and experience some projects. There are always opportunities, as this industry is still in a relatively early stage, and there is no need to rush in and try to make a lot of money (the actual result may be losing money).
In short, whether your capital is $1 million or $1,000, although the strategies may be completely different, the core logic of investment is actually the same, which is to try to balance the maximization of returns and the minimization of risks based on the time frame and position management.
As I was writing this, I suddenly remembered two interesting little things.
One is that a few days ago, a new partner left a message after following the public account, saying: "I don't have any money, but I want to join your group. I feel your group's $55 threshold is too expensive. Can you directly invite me to the group to learn, and I'll pay you back when I make money in the future."
Well, there are many ways to freeload, such as researching how to get airdrops or how to play arbitrage, or you can consider joining some free circles provided by other bloggers for learning and communication. There's no need to try to freeload everywhere.
The other is that I remember a while ago, a new partner left a message asking: "Is it illegal to do this kind of self-media in the crypto field? I also want to do one, but I don't know if it's allowed. How much money can you make from doing this self-media?"
I don't know if it's illegal to do crypto-related self-media, but I know there are a lot of such self-media now. To be more specific, as long as you don't use the self-media to engage in illegal fundraising, pyramid schemes, or provide deposit and withdrawal services in the name of crypto, theoretically just sharing your personal views on this field is not illegal, although the management here may be stricter than in some Western countries, but we still have the basic freedom of speech.
Many people always have high expectations but lack effective execution. If you like it, just do it; if you don't like it, don't do it. Many choices are actually that simple. For example, BTC has been called a scam by many people over the past decade or so, but this has not affected BTC's increase of over 150,000 times (158,460,270.98%), and during this process, the buying and selling of BTC has been free, and no one can stop you from holding BTC.
As for whether doing self-media can make money, it depends on your original intention and purpose. I don't know about others, maybe some crypto bloggers can make millions or tens of millions through self-media, but for this public account of mine, it's basically not making money, considering the time and effort I've put in. My core is still in hoarding (trading) coins.
In short, the articles of this public account are aimed at everyone, and there is no threshold for following the public account and no upper limit on the number of people. Everyone can read and leave comments freely, which can basically meet the learning or communication needs of most people. The group has a maximum limit of 500 people, which is not for everyone, but more to play a "bridge" and "connection" role, mainly to meet the needs of a small number of people and give those partners who need it an opportunity to find people on the same frequency and engage in deeper exchanges.
Whether it's trading or doing self-media or groups, we all need to try to think about their essence or underlying logic, and we also need to figure out what the ultimate purpose or goal of doing this thing is. The crypto market currently has several million tokens, we need to understand where the market liquidity comes from, and we also need to know how to make choices based on time frames and position management. There are also many self-media bloggers in the crypto market, and there are also many groups in various forms, and different bloggers or groups may have their own characteristics, such as the characteristics of this public account, which are long articles + methodologies, which are more suitable for those with patience, and cannot directly provide you with the so-called wealth code or get-rich-quick code. Therefore, you need to consider carefully what you need most now, and then just focus on the bloggers or groups that can help you.
Many people haven't made money on BTC, but you can't blame BTC for not being free to buy and sell. Many people will criticize certain bloggers as idiots, but you can't blame these bloggers for restricting your freedom of thought.
Often, people choose to envy others' fate or good luck, while ignoring their own self. Things that have already happened, we can no longer change, but the future things you still have the opportunity to make your own choices. Sometimes, choice is more important than effort, but we also need to make efforts to preserve learning and maintain thinking, only in this way can we have the opportunity and ability to make choices. Choice is not about luck and gambling, but a kind of causality based on personal experience, knowledge accumulation, and resource integration.
Note: The above content is just my personal perspective and analysis, and is only for learning and communication, and does not constitute any investment advice. Any projects or websites mentioned in the article are not directly related to this public account (this public account does not accept any advertising from project parties), please evaluate the security of the corresponding projects or websites yourself. Investment always has risks, don't get involved in things you don't understand, and don't play in games you can't afford to lose.
