I entered the crypto industry in 2016 and have experienced two rounds of bull and bear markets. I entered the market with 100,000 RMB and made a lot of money through ICO, with the highest return reaching 20 million RMB. In the end, due to my belief, it fell back to 2 million RMB after 2018. These 7 years have taught me 10 major lessons. I hope this is helpful to you. Thank you.
1. Risk management: Risk control is crucial for successful investment, and stop loss points should be set to limit losses. In my previous crypto investment career, I have been on many roller coasters, whether it is from peak to zero #POEone of the early ICO projects, doing decentralized content publishing protocol, listed on Binance, and finally zero), or peak to loneliness #NEOAnt, ICO thousand-fold coin, and the last roller coaster).
These painful lessons taught me to always be prepared for profit and loss. The best strategy for most people is to double the capital and let the profits run.
2. Timely reverse operation: When market sentiment reaches an extreme, it may be very beneficial to take reverse operation. We can only make two kinds of money in the market, one is cyclical money, and the other is emotional money. When a heat dissipates, a sector withers, the market is sleepless at three o'clock every day, the community is very lively, and aunts also start to enter the market, maybe we should be cautious about the market. During the bull market, we have many opportunities to get on the train. As the saying goes, there are many pins in the bull market, so remember not to chase high. But at the same time, the reason for the huge retracement, in addition to the lack of stop loss, there is another point, which is to re-enter the market at the high point.
3. Be cautious when using leverage: Although leverage can magnify returns, it also increases risks. My personal painful lesson was the crash on March 12. I hold a bitcoin with a cost of about $7,000. I expect that the market is probably at this position, and I am confident. I have done all kinds of macro analysis and verification as always. I went long 2 times BTC on the currency standard. Everyone knows what happened in the end. It was too late to recharge the margin on March 13 because the exchange was down. That contract operation made me lose 100 bitcoins. It was heartbreaking, and I will never touch leverage again! I often warn my friends about the three principles: don't touch leverage, don't open contracts, and don't borrow money to speculate in cryptocurrencies. If you have the ability, spot trading can also make you rich slowly!
4. Independent thinking: Develop your own insights instead of blindly following market trends. There is a lot of market noise, especially after the bull market. Various money-making posts and social media information are endless. Can you hold on to your position and be honest and surprising? This is a test of your character. Many times, when the market noise reaches our ears, it is often not an opportunity, but a trap. Letting yourself think independently and truly digging for value is our weapon to move forward.
5. Diversify your investments: Don’t put all your money into one basket to reduce the risk in a specific area. This is a lesson of faith. As a believer of Li Xiaolai and having taken several of his courses, I am an unwavering believer in his main promotion of #EOS. At one time, I bought 80% of my entire position in EOS alone. Although there was a round of EOS-led rise in April 2018, it was very sharp. At that time, I believed and followed Captain Wang to shout: After the three waves, it will reach $500. I was numb every day. At that time, I once owned 400,000 EOS. Everyone knows what happened in the end. I kept holding on until I cut my losses and left the market. So remember to diversify your investments. The #LUNA and #FTX events that occurred later also appropriately avoided risks through diversification of investments. Although there were losses, they were not serious.
6. Long-term perspective: focus on long-term investment returns, not short-term fluctuations. After the cycle comes, try to do less short-term fluctuation operations. Many experiments have shown that the return of holding still may fluctuate back and forth. In addition to the pleasure of dopamine, it is actually useless. The ROI rate of return may not be better than holding still. The core also makes you very tired, physically and financially. In this, you lose one while gaining the other. After all, the body is 1, and the money is the 0 behind it. It is sad that the body is gone but the money is still there. In every bull market, there will be several cases of sudden death in the news. My buddy died at the age of 26 in the last bull market, and there are still more than 2 million US dollars of cryptocurrencies lying on the exchange.
7. Invest in growth and innovation: Invest in areas with potential anti-fragile characteristics, such as technological innovation, for a long time. In each cycle, the top 100 currencies have rotated many times. We have calculated that the top 100 CMC rankings at the peak of the bull market in 2021 and the top 100 CMC rankings at the peak of the bull market in 2017 have replaced 67%. In fact, most of the currencies have been eliminated in a round of narratives. So we must always pay attention to the direction and field of innovation. For example, this round of narratives: AI#RWA#DEPIN #BRC20
8. Asymmetric investment: pursue investment opportunities with limited losses and huge profit potential. The probability of such opportunities in cryptocurrency is much higher than in traditional finance. For example, the recent restart of FTX, betting on FTT, as a logic of small-scale risk-taking. Including the previously thundering VGX, Canadian compliant listed companies, and auction acquisitions. And so on. In our daily investment process, the core is to pursue the bottom and high-quality projects that have been sideways for a long time. Such projects are often mentioned in my early tweets, such as last year's#RNDRsideways at 0.4-0.5. This kind of sideways trading for a long time has a limited bottom, but the upside is unlimited. The future potential is huge, and the safety cushion is thick enough.
9. Avoid emotional trading: Don't let emotions affect investment decisions, and stick to the investment plan. When making any investment, you must first make an investment plan and strategy, make a table, and guide your own operation execution. Instead of following the market, rushing forward as soon as your mind hits it. At this time, it is often easy to make mistakes. The investment strategy should include: investing funds, allocating positions, buying targets, reasons for buying, buying plans (in batches or all at once), holding risk control (stop profit and stop loss), and finally continuous correction and tracking.
10. Regular rebalancing: Adjust the investment portfolio regularly to keep it consistent with the original investment goal. In the entire bull market environment, double the capital. You will accumulate a lot of coin-based chips, which is like having your own children. Accumulating tokens will give you a sense of accomplishment. But this process is not left alone. For example, our recent DEPIN track project #ATOR , because the Onion Circle Network removed their nodes, this event caused the coin price to collapse and caused a certain retracement (the principal has been evacuated).
Although the project will develop its own independent network in the later stage, there is still room for recovery. If this incident is irreversible and cannot be tactfully avoided, at this moment, you should take the initiative to liquidate and stop the loss. Rebalance your investment portfolio and look for valuable targets in the track.
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