I previously conducted a survey, the general content was to investigate each person's risk preferences and investment styles, such as which market conditions you are better at buying in.
1. Sharp rise
2. Sharp drop
3. Consolidation
Everyone has given their own answers; every type has moments of making money, of course, there are also moments of suffering heavy losses.
It's not to say that buying during a sharp rise is better than buying during a sharp drop, or that buying during a drop is better than buying during consolidation, because this is not a simple 'yes' or 'no' issue, as buying corresponds to selling.
Buying during a sharp rise may lead to selling the next second; buying at the bottom during a sharp drop may mean selling after a week of rebounds.
Just like the particularly popular stock market board trading strategy in recent years, a top-tier capital called 'Beijing Speculator' made thousands of times profit by buying on limit up and selling on the next day’s high. If you are still feeling confused and don’t know how to approach this market, we can communicate together!
Here, let's talk about how to bottom-fish:
I know many people are obsessed with bottom-fishing. I summarize the characteristics of this type of person. Most of those with this thought have not made much money from Bitcoin.
Ask yourself honestly, have those who think about bottom-fishing made millions or tens of millions in the cryptocurrency world?
Bottom-fishing itself is a low-probability successful event. Very few people can actually bottom-fish successfully, and among those who have the concept of bottom-fishing, most cannot hold on.
If you’re just using a little money to bottom-fish, does it really matter whether you bottom-fish or not?
Always thinking about bottom-fishing, then you should see how much money you really have in hand. If it’s only a few tens of thousands or one hundred thousand, bottom-fishing really doesn’t have much significance.
The only secret to making big money in the cryptocurrency world is to have a lot of cash on hand; the more, the better.
Now, having the courage to buy during a bear market will allow you to earn more in a bull market.
As for always calculating how much it has dropped, 80%, 90%, and whether it will drop further, what the U.S. will raise interest rates, what the Russia-Ukraine war means, and what the Sino-U.S. trade means, sometimes the factors are really complex. The cryptocurrency world has always been an amplifier of individual capabilities. If you have the ability to earn 100,000 outside the market in a year, in the cryptocurrency world, you might earn 1 million or 10 million in a year.
For those who are in debt outside the market, rushing into the cryptocurrency world to make a fortune is also impossible. Most of the time, it will only lead to greater losses, especially during a bear market, which tests one's mindset.
To put it bluntly, in reality, those who can be scammed by telecommunications fraud are much more easily deceived by Ponzi schemes and shitcoins in the cryptocurrency world.
What is truly useful is to make more money, buy a bit more coins, knowing that now in a bear market, buying a bit more is enough.
Hold on; you need to hold for a long time, remain calm, and not care too much about the price you bought at. Only then is it possible to make big money.
Investment is a zero-sum game; the opponent of retail investors is the market maker.
If I were the market maker, how would I lure retail investors?
I would support and smash the price. This way, I can get more chips at lower prices. When the price drops very low, basically no one competes with me for chips. Because during this decline, I continuously buy high and sell low, creating large fluctuations, trapping most bottom fishers and rebound chasers during the decline, or exhausting their losses, making them afraid to touch this coin again. At this time, my goal is achieved.
Therefore, the more you bottom-fish, the more it drops, and many times it’s due to fear.
When retail investors are fearful and panicking, high-position chips will continue to fall, allowing me to continuously buy low and sell high during the bottom consolidation to collect chips. This may take a long time and depends on the degree of chip drop at the top. If the high-position chips remain stable for a long time, then I won't push this coin.
When enough chips are collected, because during the chip collection process, the technical team releases some good news, combined with the overall market situation, I can pull up easily at this time without much cost. When others in the market see this coin rising consecutively for several days, there will surely be many followers, and I will gradually reduce my holdings during this process.
2. Why are there sometimes large rebounds during a decline?
For example, in the range from $30 to $24, I sold 20% of my coins. In the range from $24 to $20, I sold another 18%. Then I have to buy back, because in this kind of decline, many stop-loss orders start to emerge, and some people want to average down. At this time, I have to rebound based on the chip situation. Why do I want to rebound? Mainly to attract bottom-fishing orders. Of course, if there are a lot of bottom-fishing orders, the next day I will short again. Generally, the first day’s rebound has not many bottom-fishers. After two days, retail investors see that this coin keeps rising every day, especially those cutting losses and averaging down; they usually will chase in. Meanwhile, those at high positions see that it has risen for several days and think, ‘Forget about selling, maybe I can earn something if I wait a few more days.’ At this time, I will short again and trap them. How much do I earn in between? Because during the upward move, I also have to distribute profits, so each segment of the decline can maintain a certain profit.
3. How can non-vegetarians willingly choose to cut losses?
Generally, during the early stages of being trapped, people often think like this: I am equivalent to saving in the bank. I won't sell; I just won't sell. This coin is quite good, with various applications, so why should I sell? It will definitely rise back in a few years. At this time, they might be down 10%, 20%, or even 40%, but when it reaches 70% or 80% down, they might say: 'Grandpa Zhuan, I’m scared of you now, it’s fine with me.' A quick cut, and they’re out clean. This phenomenon is strange; why don’t they sell when they’re only slightly trapped, but can decisively cut losses when there's hardly anything left in their accounts? This is actually the temptation of the market leaders, as the inertia of thinking from several years of bull markets makes you firmly believe that bull markets still exist. If it drops 20%, we’ll add to our positions, lower our costs, and wait for it to rebound to where we’re not losing before we exit. Another possibility is that the coin price never reaches their cost level and drops again, and the retail investors’ position averaging does not reduce costs but rather expands losses.
But the situation is not as you expect. Most retail investors show two behaviors: one is that when they reach their cost price, they are unwilling to sell and still want to earn more. How did I manage to sit on the market? It's simple; when the follow-up orders decrease and the selling pressure increases, I immediately go against the trend, running ahead of most people.
After such rebounds, the amplitude will become smaller and smaller, eventually just consolidating. In the final stages, it may drop a little each day, with extremely narrow fluctuations, making it impossible to execute trades as I have calculated the cost of trading; the price difference is not enough to cover the transaction fees. Moreover, because of continuous declines, once you sell, you basically lose interest in buying back. I ask you, isn't it frustrating? Therefore, don’t think about defeating the market makers through skills and technical analysis. Market makers have more money and more goods; there are 10,000 ways to operate. If it really doesn’t work, they can release false announcements, just like the recent cyber incident, which claimed a 100% increase in issuance, but later said there was a decimal point error, only 10%. These tricks are worth pondering. The root cause is that they may very well be both the referee and the athlete. We just need to buy in, reach our psychological price level, and leave. When encountering situations that may have historical popularity peaks, sell and don’t come back.
