In the cryptocurrency world, the well-known "80/20 rule" phenomenon indicates that the market may exhibit dull performance 80% of the time, while real profit opportunities are concentrated in the remaining 20%. Due to the unpredictable nature of market volatility, investors must always maintain a certain level of market participation. This does not mean to wait until the price rises to go all in, but rather to hold heavier positions when the market is rising and maintain lighter positions during downturns, acting in accordance with the market trend.
However, many people adopt the opposite strategy. They tend to gradually increase their positions as prices rise, which creates an inverted pyramid structure that leads to increasingly heavy positions at the peak. When the market reverses, they often suffer huge losses due to their heavy positions. This behavior is strikingly similar to gambling: betting small when in profit to accumulate some gains, and making heavy bets when the market declines, risking all accumulated profits.
A classic saying in market investing is: "I am greedy when others are fearful, and I am fearful when others are greedy." At market peaks, when most people rush to buy, one should decisively sell to release the chips; and at market troughs, calmly buy back the chips. This contrarian investment approach, although contrary to human nature and uncomfortable, aligns with market principles. After all, it is often the few investors who can operate contrary to human nature that achieve profits.
Greed often stems from the hope of recouping past losses through the continuous rise of a certain asset, leading to an unwillingness to sell during rising prices, which is a typical gambler's mentality. True wisdom lies in understanding that one only needs to catch the middle part of the fish; chasing the head and tail is not worth it. Learning to decisively let go at the right moment is key to achieving steady profits.
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