Author: Game
Compiled by: TechFlow
The fear of "this is the last cycle" + the uncertainty of how long the good times will last + the social pressure from others performing better. These three form a deadly combination that has ruined the decision-making ability of many people.
Possible consequences:
Distraction: Blindly chasing every hot trend, neglecting the necessity of focusing on key transactions.
Pessimism and hesitation: Losing confidence due to uncertainty, leading to an inability to hold any assets in the long term, or even completely staying out of the market.
Lack of conviction: Insufficient in-depth research on projects, unable to build enough confidence to withstand market fluctuations.
Lack of profit strategy: Rushing to liquidate due to fear of the market ending, missing out on greater profit opportunities when Bitcoin experiences a slight pullback.
Coping suggestions:
Focus on key areas:
Focus on specific areas or hot narratives within one or two chains.
Make a clear choice: on-chain trading or secondary trading, focus on one direction.
If you think you can engage in all areas at the same time, you are only deceiving yourself. Concentrate your resources and energy, focus on the areas that best fit the current market conditions and can bring the highest returns. Based on your capital scale, advantages, and market environment, find the most suitable direction and strategy for yourself.
Clarify your mode of operation:
Understand whether you are investing, trading, or speculating, as these three have fundamental differences and should not be confused.
A simple judgment framework can help you distinguish these methods and develop corresponding strategies accordingly.
Stick to your plan:
Develop a clear action plan, including the following elements:
Market capitalization range: Determine the market capitalization range you will enter the market in.
Profit plan: Develop rules for taking profits in batches, rather than liquidating everything at once out of fear.
Target estimation: Set the target price the asset may reach, and the time frame for achieving the target.
Stop-loss conditions: Clearly define when partial or full stop-loss is needed, which can be based on changes in fundamentals or technicals, or adjustments due to changes in the macroeconomic environment (such as the release of important data). For example, in the face of uncertain macroeconomic conditions, you can appropriately take profits and wait for lower prices to re-enter the market.
Know yourself:
Identify your weaknesses: Lack of experience? Insufficient technical capabilities? Psychological biases of excessive optimism or pessimism? Issues with improper capital management or lack of time?
If you find that you have more weaknesses in these areas than others, decisively give up competing in this field. Choose the direction where you have advantages and focus on the areas you are most proficient in.
Continuous improvement
Carefully reflect after each trade - which operations were successful, which were failures, and what were the reasons? Were the problems in the process or decision-making, or was the decision itself reasonable, but the results did not meet expectations?
Your goal is: continuously reduce errors in your operations, gradually improve your win rate through the accumulation of experience, and appropriately increase your position when your hit rate is higher.
If you ignore this process, you are likely to be trapped in long-term repetitive struggles, both psychologically and in terms of profit and loss performance, and will find it difficult to truly make progress.
Don't go it alone
In the market, reliable partners are crucial. They not only hold you accountable for your actions, but also help you fill in your shortcomings.
The truly high-quality trading opportunities often come from the mutual support of the team - you make up for their shortcomings, and they also help you improve yourself.
Quality over quantity: The number of partners is not necessarily the more the better. What you need are those with high hit rates and trustworthy traders who are at the same or even higher level than you in the areas you focus on.
Broaden your horizons: Establish a small circle of people who focus on areas different from your main areas. They can provide you with insights into macrotrends, market cycles, and other important information beyond your direct focus. These insights will ultimately feed back into your overall market understanding and help you formulate better strategies.
