Author: Game
Compiled by: Deep Tide TechFlow
Fear of 'this is the last cycle' + uncertainty about how long good times can last + social pressure from others performing better. These three elements constitute a deadly combination that destroys many people's decision-making abilities.
Possible consequences:
Distraction: Blindly chasing every hot trend while neglecting the necessity of focusing on key trades.
Pessimism and hesitation: Losing confidence due to uncertainty, leading to an inability to hold any asset long-term, or even completely avoiding the market.
Lack of belief: Insufficient in-depth research on the project, making it impossible to build enough confidence to cope with market fluctuations.
Lack of profit strategy: Due to fear of market end, hastily liquidating during minor Bitcoin pullbacks, missing out on larger profit potential.
Suggestions for coping:
Focus on key areas:
Focus on one or two specific areas or hot narratives within the chain.
Clearly choose: on-chain trading or secondary trading, focus on one direction.
If you think you can dabble in all areas at the same time, you are just deceiving yourself. Concentrate your resources and energy on the areas that are most aligned with current market conditions and can yield the highest returns. Combine your capital scale, advantages, and market environment to find the direction and strategy that suits you best.
Clarify your operating method:
Understand whether you are investing, trading, or speculating; these three are fundamentally different, and should not be confused.
A simple judgment framework can help you distinguish these methods and develop corresponding strategies.
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: Establish rules for taking profits in batches, rather than completely liquidating due to fear.
Target estimation: Set the target price that your assets may reach, as well as the time frame for achieving the target.
Stop-loss conditions: Clearly define when to partially or fully stop losses, which can be based on changes in fundamentals or technicals, or adjustments due to changes in the macroeconomic environment (such as upcoming important data releases). For example, in uncertain macro environments, it may be appropriate to take profits and wait for lower prices to re-enter.
Know yourself:
Identify your weaknesses: Do you lack experience? Are there technical skill deficiencies? Is there an overly optimistic or overly pessimistic psychological bias? Is there a problem with improper capital management or insufficient time?
If you find that your weaknesses in these areas are more than others, decisively give up competing in this field. Choose the direction where you have advantages and focus on the areas you are best at.
Continuous improvement
After each trade, reflect seriously - which operations were successful, which were failures, and what were the reasons? Was the problem in the process or the decision, or was the decision reasonable at the time but the outcome unsatisfactory?
Your goal is: to continuously reduce errors in operations, gradually increase the win rate through accumulated experience, and appropriately increase positions when the hit rate is higher.
If you neglect this process, you are likely to fall into long-term repeated entanglement, making it difficult to achieve real progress both psychologically and in terms of profit and loss performance.
Don't go it alone
In the market, reliable partners are crucial. They not only hold you accountable for your actions but also help you compensate for your shortcomings.
Truly high-quality trading opportunities often come from mutual support within the team - you compensate for their shortcomings, and they help you improve yourself.
Quality over quantity: The number of partners is not necessarily better. What you need are those high-hit-rate, trustworthy traders who are on par with you in the areas you focus on, or even outperform you.
Broaden your perspective: Build a small circle that is different from your main field; these individuals can provide you with important information about macro trends, market cycles, and other insights beyond your direct focus. These insights will ultimately feed back into your overall market understanding and help you develop better strategies.