The fear of 'this is the last cycle' + uncertainty about how long good times can last + social pressure from others performing better. These three constitute a lethal combination that undermines the decision-making ability of many.
Possible Consequences:
Distraction: Blindly chasing every hot trend while ignoring the necessity of focusing on key trades.
Pessimism and Hesitation: Losing confidence due to uncertainty, leading to an inability to hold any assets for the long term, or even completely avoiding the market.
Lack of Belief: Insufficient in-depth research on projects, making it hard to build enough confidence to cope with market fluctuations.
Lack of Profit Strategy: Out of fear that the market will end, hastily liquidating positions during slight pullbacks in Bitcoin, missing out on larger profit opportunities.
Response Suggestions:
Focus on Key Industries:
Concentrating on one or two specific industries or hot narratives within the chain.
Clear Choices: On-chain trading or secondary trading, focusing on one direction.
If you think you can dabble in all industries at the same time, you are just deceiving yourself. Concentrate your resources and energy on the industries that currently align best with market conditions and can provide the highest returns. Combine your capital scale, advantages, and market environment to find the most suitable direction and strategy for yourself.
Clarify Your Operating Method:
Understand whether you are investing, trading, or speculating; these three have essential 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 that includes the following elements:
Market Capitalization Range: Determine which market capitalization range you will enter the market.
Profit Plan: Develop rules for taking profits in batches rather than liquidating entirely out of fear.
Target Estimation: Set target prices that assets may reach, as well as the timeframe for achieving these targets.
Stop-Loss Conditions: Clearly define when to partially or fully stop-loss, which can be based on fundamental or technical changes, or adjustments due to shifts in the overall economic environment (such as upcoming important data releases). For example, in uncertain economic conditions, it may be appropriate to take profits and wait to re-enter at lower prices.
Know Yourself:
Identify Your Weaknesses: Do you lack experience? Are there technical deficiencies? Do you have psychological biases of excessive optimism or pessimism? Are there issues with improper capital management or insufficient time?
If you find that your weaknesses in these areas are greater than others, decisively give up competing in that industry. Choose directions where you have advantages and focus on the industries you excel in.
Continuous Improvement
Reflect seriously after each trade—what operations were successful, what were failures, and what were the reasons? Was the issue with the process or the decision-making, or was the decision itself reasonable but the outcome unsatisfactory?
Your goal is: continuously reduce errors in operations, gradually increase your win rate through experience accumulation, and appropriately increase your position size when your hit rate is higher.
If you ignore this process, you are likely to fall into long-term repetitive entanglement, making it difficult to achieve real progress both psychologically and in terms of profit and loss performance.
Do not go it alone
In the market, reliable partners are crucial. They not only hold you accountable for your actions but can also help you fill in your shortcomings.
Truly quality trading opportunities often come from mutual support within a team—you fill in their gaps, and they help you improve yourself.
Quality over Quantity: The number of partners is not necessarily better the more there are. What you need are those trustworthy traders with a high hit rate who are on par with you in the industries you focus on, or even better.
Broaden Your Perspective: Establish a small circle that differs from your main industry; these individuals can provide you with important information about overall economic trends, market cycles, and other insights beyond your direct focus. These insights will ultimately feed back into your overall market understanding, helping you strategize better.
[Disclaimer] The market has risks, and investment should be cautious. This article does not constitute investment advice, and users should consider whether any opinions, viewpoints, or conclusions herein align with their specific circumstances. Invest accordingly at your own risk.
This article is reproduced with permission from: (Deep Tide TechFlow)
Original author: Game
The mindset of crypto investment is important! How to avoid unnecessary worries and make the right decisions? This article was first published on 'Crypto City'