Note: This article comes from @Rocky_Bitcoin Twitter, and is compiled by Mars Finance as follows:
I entered the crypto industry in 2016 and experienced two bull and bear rounds. I initially entered the market with 100,000 RMB, and gained a lot of profits through ICO, reaching a maximum of 2000W. In the end, due to faith, it dropped back to 200W after 18 years. These 7 years have taught me 10 major lessons. Hope it’s helpful to you 🙏Thank you.
1. Risk management : Risk control is crucial to successful investment, and stop-loss points should be set to limit losses.
In my previous crypto investment career, I have been on many roller coasters, whether it was from the peak to zero (#POE, one of the early ICO projects, making a decentralized content publishing protocol, listed on Binance, and finally zero), Or from peak to loneliness (#NEO Xiaoyi, ICO thousands times of coins, and finally a roller coaster ride). These painful lessons taught me that I should always be prepared to take profits and losses. The method that applies to most people is: double the principal and let the profits run. This is an excellent strategy.
2. Timely contrarian operations : When market sentiment reaches extremes, taking contrarian operations can be very beneficial.
We make nothing more than two kinds of money in the market, one is cyclical money and the other is emotional money. When a trend dissipates, a sector withers, the market sleeps at three o'clock every day, the community is bustling, and aunts start to enter the market, you may have to look at the market with caution. During the bull market, we have many opportunities to get on board. As the saying goes, there are many pins in the bull market, so remember not to chase the high. But at the same time, the reason for the huge retracement is not only the lack of stop loss, but also the point of re-entering ALL IN at the high point.
3. Be cautious when using leverage : Although leverage can magnify returns, it can also increase risks.
I personally learned the hard way when the price plummeted at 312. I hold a BTC with a cost of about US$7,000. Thinking about the expectations, the market position is probably at the bottom. I am full of personal confidence. All kinds of macro analysis and verification are as always. The currency standard is long 2 times BTC. Everyone knows what happened in the end. 313 It was too late to recharge the margin urgently because the exchange was down. That contract operation cost me 100 pieces of BTC. It hurts so much that I will never touch the lever again! I often warn my friends about the Three Don’ts: Don’t use leverage, don’t open contracts, and don’t borrow money to speculate in currencies. If you have the ability, spot money can also make you rich slowly!
4. Think independently : Develop your own opinions instead of blindly following market trends.
There is a lot of noise in the market, especially after the bull market arrives. Various profitable posts and community information emerge in endlessly. And whether you can hold on to your position and stay on track will be amazing. This tests your xinxing. Many times, when market noise reaches our ears, it is often no longer an opportunity, but a trap. Allowing ourselves to think independently and truly explore value is our weapon to move forward.
5. Diversify your investments : Don’t invest all your money in one basket to reduce risk in a specific area.
This is a lesson of faith. As a believer of Li Xiaolai and have attended his courses several times, I am an unswerving believer in #EOS, which he mainly recommends. I once bought 80% of my entire position into one EOS target. Although in April 2018, there was a round of rise led by EOS, which was very sharp. At that time, I had faith and followed Captain Wang to shout: After three waves, it will be 500 knives. I was numb to myself every day, and at one time I owned 400,000 EOS. Everyone knows what happened in the end, and they fought until they were cut off and left. So remember, diversify your investments. In the subsequent #LUNA and #FTX incidents, risks were appropriately avoided through diversified investments. Although there were losses, they would not be debilitating.
6. Long-term perspective : Focus on long-term investment returns rather than short-term fluctuations.
After the cycle comes, try to do as little short-term fluctuation operations as possible. Many experiments have proven that the reward of holding still may fluctuate back and forth, and in fact it has no merit except the feeling of dopamine. The ROI rate may not be as good as holding on. Core, it also makes myself very tired, physically and financially. Among them, focusing on one thing and losing the other, after all, the body is 1, and the money is the 0 behind it. The body is gone, but the money is still there, which is sad. In every bull market, several cases of sudden death will be broadcast on the news. A friend of mine passed away at the age of 26 during the last bull market, and there were still more than 2 million US dollars worth of cryptocurrency on the exchange.
7. Invest in growth and innovation : Invest long-term in areas with potentially antifragile properties, such as technological innovation.
In each cycle, the top 100 currencies are rotated many times. We have calculated that the CMC top 100 ranking at the peak of the bull market in 2021 has replaced the CMC top 100 ranking at the peak of the bull market in 2017 by 67%. In fact, for many currencies, most of them were eliminated in one round of narrative. Therefore, we must always pay attention to the direction and areas of innovation. For example, this round of narrative: #AI #RWA #DEPIN #BRC20
8. Asymmetric investment : Pursue investment opportunities with limited losses and huge profit potential.
Such opportunities are much more likely in cryptocurrency than in traditional finance. For example, the recent FTX restart, betting on FTT, is the logic of using small to make a big difference. Including the previous thunderous VGX, a Canadian compliance listed company, and bidding and acquisition cases. etc. In our daily investment process, the core is to pursue the bottom and high-quality projects that have been trading sideways for a long time. This type of project was often mentioned in my early tweets, such as last year when #RNDR was trading sideways at 0.4-0.5. This kind of sideways market has been sideways for a long time, and the bottom is limited, but the upside space is unlimited. The future potential is huge and the safety pad is thick enough.
9. Avoid emotional trading : Don’t let emotions affect investment decisions and stick to your investment plan.
When making any investment, you must first make an investment plan and strategy, and make a form to guide your execution. Instead of following the market, just hit your head and rush forward. At this time, it is often easy to make mistakes. The investment strategy should include: investing funds, allocating positions, buying targets, reasons for buying, buying plans (in batches or one-time), holding risk control (stop profit and stop loss), and finally, continuous correction and tracking.
10. Regular rebalancing : Regularly adjust the investment portfolio to maintain consistency with the original investment objectives.
In the entire bull market environment, double the capital. You will accumulate a lot of coin-based chips, which is like giving birth to your own children. You will feel a sense of accomplishment by accumulating the amount of tokens. But this process is not to be left alone. For example, our recent #ATOR DEPIN track project, because the onion ring network eliminated their nodes, this event triggered a collapse in currency prices and caused a certain retracement (the principal has been withdrawn). Although the project side will develop its own independent network later, there is still room for recovery. If this kind of incident is irreversible and cannot be avoided, at this time, you should take the initiative to liquidate, stop the loss and leave. Rebalance your investment portfolio and look for value targets on the track.
Finally, if you like today’s thoughts and it helps and inspires you, please forward and like it. Your support is our greatest encouragement. Thank you🙏🙏
