Nothing in this world can escape the 80/20 rule, which is the so-called “8 losses, 1 draw, 1 win”. The same is true for the financial markets, including the cryptocurrency world. 20% of people control 80% of the wealth. After all, only a few people can make money by speculating in cryptocurrencies, and most players are just leeks.
If you are in a state of loss but are unwilling to accept it, cannot find the reason, and are very confused, then instead of wasting time on yourself, why not find the reason first? First think through a few questions and find the rules of the currency circle.
Before I start this article, I would like to ask you a few questions for you to think about.
First ask yourself:
Am I one of the 20% or the 80%?
What qualifies me to make money in this industry?
Who is making money in this industry?
Have I studied hard? Can my knowledge surpass that of most investors?
Do I have the ability to think independently?
My investment strategy is just to follow the orders of group friends, bloggers, and KOLs?
I am facing the dealer's manipulation. Can I be in the center of the bloody storm?
Of course, there is no need to belittle yourself. This is the law of the world. It is not our fault and we cannot change it. If the capital market one day becomes a situation where most people make money and a few lose money, then it will become strange.
The market is just a trading channel. The market itself does not generate profits. For example, in the process of buying and selling Bitcoin, Bitcoin itself does not generate profits.
The so-called making money by speculating in cryptocurrencies is the price difference generated during the transaction process. To put it bluntly, if you can make money, it means that someone else has taken your order at a high price. If you make money, someone must lose money.
Suppose there are ten participants in the currency circle, and each of them has 10 yuan. If only a few people make money, one of them earns 2 yuan from the other nine people, and this person has 28 yuan, and the other nine people have 8 yuan, and the game can continue. If most people make money, nine of them earn 2 yuan from one person, and the nine people have 11 yuan. Not only does one person lose all the money, but he also owes 8 yuan, and the game cannot be played anymore.
When a few people make money, the market is sustainable; when most people make money, the market will collapse.
It’s the same as lottery. If most people win, the lottery company can’t continue to operate. Only when most people lose and a few people win, can the lottery company continue to operate.
Therefore, the cryptocurrency market will use every possible means to make most people lose money.
How to become one of the few who make money?
There are many reasons for losing money in cryptocurrency trading. In summary, there are only six reasons. If you do not follow the following six reasons, you will become a maverick.
1. Serious short-term thinking
Simply put, we should look at the long term. What everyone is discussing is how much the price has risen today, how much it has fallen tomorrow, etc., rather than how the coin will be in half a year or a year. You can see which of the so-called "masters" who have achieved financial freedom in the current cryptocurrency circle made money in three to five days. They all relied on time to persevere; allocate positions reasonably, with long-term as the main focus and medium- and short-term as the supplement. If there are clear short-term trend changes, you should also follow them.
2. Buy high and sell low
Chasing the rise and selling the fall is a mistake that almost every cryptocurrency investor will make. When they see a coin soaring and the whole world is discussing it, they buy it and are reluctant to sell it when they lose 10% or 20% after buying it. They hold on to it and wait for the day when they can get out of the trap. When it continues to fall and loses 50% or even 60% or 70%, they think that this coin is not good and sell it directly to the floor. Then they repeat this step again and again. There is really no good solution to the problem of chasing the rise and selling the fall. It is a psychological problem.
3. Lack of awareness
Many people don’t think before investing, and just believe what others say. Today, a big V says this coin is good, so they buy it immediately! Tomorrow, XX rumor says that the coin will rise, so they buy it... As for what is good about this coin and why it will rise, they have no idea. It is unfair not to lose money with this kind of investment without thinking. We can use other people’s cognition as a reference when investing, but we must establish our own cognition before that. No matter how powerful the KOL is, he will build a position first before letting you build a position. He will only remind you after he sells his position, and you can only carry his sedan chair.
4. Too impetuous
Impetuousness seems to have become the norm in the cryptocurrency circle. Many people enter this market with the mentality of getting rich overnight, but they are not prepared to go back to zero, let alone the ability to get rich overnight! After buying a coin, they hope that it will rise after buying it, double in three days, and increase 10 times in half a month... If the coin they bought does not rise in half a month, or even loses money, they will start to find all kinds of excuses for themselves, and then curse all kinds of things, scolding the project party for not managing the market value, scolding the dog dealer for crashing the market, and blaming the big V for inaccurate predictions...
I have seen too many stories of people getting rich overnight in the cryptocurrency circle, and there are coins that increase tenfold or a hundredfold around me almost every time period. I subconsciously regard the cryptocurrency circle as a 100% sure win casino, thinking that as long as I buy coins, I can make money, but I don’t regard it as a real financial market. Bloodthirstiness is the essence of the financial market.
5. Not learning
Previously, a media outlet conducted a survey on investors’ understanding of digital currencies. Among the 778 digital asset investors randomly selected, less than 10% could quickly and accurately describe “what is Bitcoin?” and only 17 people could accurately explain “what is blockchain technology?”
Although the statistics of this data are small, they are enough to illustrate the current situation of the overall investors in the cryptocurrency circle. How can you have faith if you don’t even know what you are investing in? Without faith, how can you hold on to the lowest-priced chips or the best currencies?
Learning is an eternal wealth. Only by continuous learning can we avoid being harvested.
6. Lack of sound investment philosophy
Most people do not have a complete investment plan before investing, and they just follow their feelings. This kind of investment method that relies entirely on intuition will definitely result in a high probability of losing money if you encounter unexpected situations.
Only by summarizing a set of investment strategies that suit ourselves can we deal with various situations and remain calm whether the market goes up or down. This can at least make our mentality invincible and avoid letting our mentality influence wrong choices.
Finally, I would like to advise everyone not to be arrogant after making money. Suppose your ancestors won a coin that will increase by 100 times, you should find a way to keep the wealth. That is not your ability. The money earned by luck will be lost by strength! Stay away from aunties who are easily brainwashed. They always talk about surpassing Bitcoin and the blockchain revolution, but in fact they don’t even know what a block is. This is a typical stubborn person. Even if you tell him the correct information, he will say that you don’t know enough.
Learn more and expand the derivative industry. The crypto industry is not only about making money by speculating in coins, such as the potential coins in the primary market. Understand the project party and community clearly and build positions at low prices, such as the recent high-quality coins in the primary market, fists.
Then I analyze the secondary market and primary market of the currency circle
🔥Primary market [metaphor for unlisted equity] has a small market value, large appreciation potential, large fluctuation range, suitable for small funds, small risks for big gains
🔥Secondary market [metaphor for listed stocks] has a high market value, small appreciation space, relatively stable rise and fall, suitable for large funds, stable and safe
Some people also demonize the primary market. I do not deny that the primary market is risky, but why do many people still want to play in the primary market? Because there are good projects in the primary market, and once you grab a good project, you can turn things around. Ordinary people are not capitalists, and they don’t have big funds to turn things around. They can only make a small bet for a big gain.
Looking at the entire history of the cryptocurrency circle, how many coins can still rise after falling for several months? Just count them on your fingers. Those that can rise basically become the gods of coins. Fists that can still rise after falling for several months must be high-quality coins worth building a position.
Fists contract data 👇
0xec75a897b9bf941bc67bc08a0c062eafbabfed9f
More good news to come
Fists burns deflationary coins, CK audit has passed
A16z Alliance Fund + Retail Investors Jointly Manage the Market + Burning and Destruction Mechanism (0.5%/hour) + Foundation Buyback and Destruction + Ecological Destruction + Double Pool Mechanism + Reflux Pool Mechanism (0.2% for Buying and Selling) + Dividends for LP Shareholders (1.8% for Buying and Selling)
