The ways to get rich quickly are difficult to replicate, but the reasons for failure are mostly similar.
Written by: IceFrog
I was too young at that time to know that all the gifts given by fate had already been secretly marked with a price. - Stefan Zweig
1. Cryptocurrency Casino Theory: Luck or Skill, the Road to Success Does Not Lie in Difficulty
Whether any game is gambling or not ultimately depends on a fundamental question: Is it a "luck game" or a "skill game"? Undoubtedly, in the early days of the cryptocurrency world, luck played a large role. As long as you dared to rush, you could win. The cryptocurrency world gave generous rewards to the early brave explorers. As the industry develops, we see that the wealth myths in the cryptocurrency world still emerge from time to time, but the chances of winning by luck alone are getting smaller and smaller. We have seen many stories of getting rich overnight, and we have also witnessed many tragedies of going back to zero in a second.
The importance of luck is that it gives you opportunities, and the importance of skills is that it allows you to turn opportunities into wealth. At this point in time, for retail investors, we must admit that luck still exists in the cryptocurrency world, but we must also admit that the importance of skills is increasing.
For the cryptocurrency community, what is the ultimate skill to win? Different people have different opinions. Some think it is the short-term invincible K-line king, while others think it is the king of price investment who dares to hold a large position for a long time. However, in terms of the final winning rate, both strategies have winners, but also ordinary players who end up in a miserable defeat.
If we look at it from the perspective of an ordinary retail investor like me, for most of the market, it is important to remember that embracing low-difficulty investments is the only way to win. Note the restrictive adjective: ordinary people and ordinary retail investors.
It is undoubtedly quite difficult for both Diamond Hand and Short-term FOMO Paper Hand to achieve the final victory.
2. Diamond Hands’ Survivor Bias: If you are capable, you can get in; if you are not capable, don’t force yourself to get in
Before discussing diamond hands, we must assume that you are a really ordinary Web3 surfer who has no great talent except courage. The K-line is also a half-baked level. You can't hold it for a long time. I am anxious when I see others getting rich. I will lose if I rush in. Next, we will further discuss the probability of ordinary people becoming diamond hands, so that you can completely give up.
Diamond Hand originated from forums such as reddit, and refers to investors who refuse to sell no matter how much their assets fluctuate.
It should be noted that there are two conditions implied here: highly volatile financial assets and resolute not to sell. Investors who hold gold for a long time may not be able to obtain this honorary title. Only those who hold gold for a long time and resolutely refuse to sell in the highly volatile speculative market and finally get great results are qualified to be called diamond hands.
In the cryptocurrency world where huge wealth can happen at any time, no one is unwilling to become a diamond hand, but not most people can become a diamond hand, otherwise the number of diamond hands in the cryptocurrency world would not be so rare, and the few that exist would have already become legends.
To be able to become a diamond hand, you must have the following qualities:
1) Superb insight + luck. You can see the growth potential of this asset in the future. Even before it comes out, you can already see its huge growth potential and certainty of growth.
2) You have sufficient free funds and can invest a certain amount of funds without affecting your current life and your mentality.
3) You must be determined enough, you have cognition that goes beyond the public and does not change for a long time.
These three points are not complicated, but only a few people can really put them into practice. It is easier said than done. Especially for most retail investors, the difficulty of practicing the second, first and third points shows that diamond hands are really rare.
Therefore, the basic characteristics of a diamond hand are: first, you need some spare money, which most people have; second, you need to have cognitive abilities far beyond the general public, which has already eliminated most people; finally, you need to remain emotionally stable and firm, which continues to eliminate a large number of people, so the probability of an ordinary person becoming a diamond hand becomes very low.
It needs to be clarified that the above are all the probabilities of an ordinary person. This market is not short of people who dare to bet their fortunes and remain unshakable even after experiencing long-term huge drawdowns. Some of them have also achieved great results, but these people are not ordinary people.
The cruelty of reality is that we can only see a person win easily, and we may shout "Are kings, princes, generals, and ministers all born with different species?", but we may not know that the pain he can endure is something we cannot bear at all. This is a result of talent, luck, and acquired training.
If you are capable, you can get on. If you are not capable, don't force yourself to get on. Sometimes waiting will reward you with value, because you understand what the real value is. Most of the time, waiting does not create value, and in the end it becomes an obsession. Because it is rare to identify players who really have long-term value. They are either extremely smart, extremely talented, or unusually hardworking, at least one of them is extraordinary.
Then, if the probability of becoming a diamond hand is very low, can I get rich by relying on short-term FOMO? The answer is still no.
3. The trap of short-term FOMO: I can do it, so I want to go up; I can’t do it, but I can’t go down😂
First of all, the bubble in the financial market is definitely a positive word, but you have to understand and embrace the bubble, but never become a bubble. Short-term FOMO not only tests your psychology, but also your operating skills. Its main test is:
Others are earning ten times more every day, do you want to try it?
Everyone else is on the bus, but you can't get on?
Others look at 100 times, you get off at 20 points
Another golden dog comes out, but you are not in the car
You got on the bus and found yourself trapped.
The End
Taking the recent MEME craze as an example, this kind of psychological state and cycle is played out every day, from waiting and watching, getting on board, adding positions, to being trapped, stopping losses, and leaving the market.
You will find an amazing phenomenon: it seems that there is endless money to be made during this period, but the person who gets the big result is not you. You make a big profit at the beginning, a small profit in the middle, a small loss next, and finally zero, stuck or a huge loss.
What exactly is the problem?
The characteristics of short-term FOMO are: the odds are high, but the winning rate is not necessarily high. In addition to the general market with a large amount of money, the FOMO market is often highly concentrated on a few assets for speculation, or hot money quickly rotates between different sectors, and the emotion and randomness increase significantly. After all, no one knows what emoji/picture Musk will send tomorrow.
Scenarios where short-term FOMO can make money: get in early, run fast, and keep your hands off.
Early entry: You can discover the value of this asset earlier than most of the market, with a highly sensitive market sense and judgment ability
Probability of running fast: You can identify the top risk faster and withdraw in time; the ability to control greed
The probability of controlling your hands: you can not operate arbitrarily, and when you are addicted, you want to buy everything; extreme position management and risk management capabilities
People who possess all three abilities at the same time are definitely a minority in the market.
We need to note that this does not mean that short-term FOMO will definitely lead to losses, but the probability of making a lot of money in short-term FOMO is very low. For most people, it is still a difficult and undesirable path.
Buffett's teacher Graham once said: The bull market is the main reason for ordinary investors to lose money. The profound reason is that it is not the bull market FOMO that causes losses, but the huge losses caused by ignoring short-term risks.
The irony of the financial market is that a bear market does not mean high risk, and a bull market does not mean low risk.
As for short-term FOMO, when you are waiting and watching, a small group of people have already built positions in advance. When you get on board, the several-fold increase in one day makes you forget yourself. At this time, some people have already left the market early, and by the time you realize that something is wrong, you have been deeply trapped.
Will this time be different? Current costs, future costs
When we discuss the winning methods of playing with diamond hands and short-term FOMO, we will find that the probability of winning in the end is relatively low in these two situations. Maybe you will say that Trump has come to power, the favorable policies have exploded, and the bull market has no upper limit, so diamond hands and short-term FOMO will win. The actual situation is probably not the case. There has never been an eternal bull market in history, let alone an eternal bear market. Everything is a cycle.
For ordinary people, we need to embrace low-difficulty investments instead of looking for high-difficulty investments. At the same time, it does not mean that since neither diamond hands nor short-term FOMO can win, we should just give up. Every choice you make now is a cost, which may be a huge reward in the future or an unbearable price.
For most ordinary people, the probability of getting rich quickly through any replicable method is very low. Your resources, talents, personality and even the environment you are in may lead to failure at any time.
The ways to get rich quickly are difficult to replicate, but the reasons for failure are mostly similar.
The so-called low difficulty means that on the basis of fully understanding your own personality and combining your own resource endowments, you do what you are best at and have the highest winning rate. The rest is long-term persistence.
If you can't even afford the basic living needs, you should find a job instead of practicing diamond hand skills.
Assuming that you are a person with large emotional fluctuations and cannot tolerate pullbacks, you should not chase highs repeatedly in a volatile market. You should identify a target and ambush for a long time with small amounts of funds, or you can just concentrate on being a freeloader and make the most certain money.
Overcoming human weaknesses has never been an easy task. For most ordinary people, it is likely that they will not be able to challenge and overcome them most of the time in their lives. Then the only less difficult thing you can do is to continue to learn from the practices of top masters, incorporate it into your own system, and do the investment that you are best at and have the highest winning rate.
This is my feeling, and it is also the advice I give to ordinary retail investors. It may not make you rich overnight, but in the long journey of life, losing less is another kind of victory.
Standing at the starting point of the new bull market, no matter which choice you make, this time, I hope you can win!