I think now the mindset of most altcoin investors is regret and remorse
Not selling part or all of the portfolio at a high point,
Before this, the mindset of most altcoin investors was
——Regret and remorse for not getting in $XRP , DOGE
, $ACT
and so on
In economics, we often discuss rational investment behavior.
They will make optimal decisions and achieve precise balanced execution.
Among them, algorithmic game theory studies whether humans can achieve effects close to or similar to 'optimal decision-making' by following some simple behavioral rules when making decisions.
The 'regret minimization dynamic' helps us understand when and how simple rules achieve optimal decision-making.
At the same time, the market and facts prove that if a person reflects continuously after making mistakes and feels regret and remorse, he will become better at decision-making. Any experienced investment trader will go through this process.
Currently, we are still in a bull market, because I can still see some traders flaunting the tokens they have invested in have increased by several times or even dozens of times on Twitter every day. At this time, when you find that the tokens you have seen or saved before suddenly increase by several times or even dozens of times, your heart will be filled with torment and long-term remorse and self-blame. Therefore, you will subconsciously do the following:
0. Regret for being too cautious and missing investment opportunities
1. Find bloggers who shout out high-multiple tokens and bet on their success. Follow this blogger and look for the tokens they have previously promoted on their homepage.
2. If a token with several times the appreciation appears in a post's investment portfolio, you would choose to save that post and buy other tokens that have not risen.
Then, you find that some tokens promoted by bloggers and posts are not qualified. You start to unfollow them and put them into the cold storage, especially when they drop; you may even stop-loss all the tokens they promoted.
Therefore, we need to minimize regret, which can be divided into different types:
1. External regret: This regret means that you think you made the wrong choice in hindsight. When you are a loyal player of MEME and choose to chase the MEME craze, but the altcoin market suddenly surges, you will feel a deep external regret. The loss of such an opportunity is very painful; therefore, what you need to learn is—investment is a probabilistic event, and in a probabilistic world, anything can happen. You cannot give up on the persistence of a lasting and thoughtful investment philosophy because you missed an opportunity every time. On the contrary, many altcoin players were also regretting missing the hundredfold opportunity of MEME before this.
However, when you miss the altcoin \MEME trend, you will start to doubt the strategy \ rules you executed, so you will shift the contradiction to— the reason I didn’t get into the altcoin \MEME is not whether I executed the buying action, but rather that I have biases and laziness towards altcoin \MEME in my rules and strategies.
2. Therefore, the regret brought about by the conversion of rules follows, meaning you regret the rules you followed and wish to replace them with a better one. When you choose to overturn the rules strategy you followed and create a new rules strategy, you are adapting to the market and progressing; this is a learning process, but also a process of loss and missing out. Many people sold $XRP, $ETH, $SAND before this round of altcoin season to enter the MEME market, so their main regret comes from the conversion of the rules strategy. To minimize the regret of rule conversion, you need to pursue higher cognition and strategy management, and cultivate strong execution.
3. When you have excellent rules but do not execute them, then internal regret is born. Solving it is simple: maintain execution while imposing sufficient discipline on yourself—discipline of an individual.
I hope this analysis helps you and urges you to build an 'optimal decision-making' investment behavior model.