Two main ways to create wealth, three basic ideas for finding potential projects
In this field, many people dream of becoming rich overnight. Although it is good to have dreams, what if they come true! But there is actually a huge difference between dreams and daydreaming, and many people's so-called dreams are just a kind of self-indulgent daydreaming.
Usually, the market will always test human nature repeatedly, and even if you hold high-quality assets, you may be thrown off the bus. For example, the following situations may occur:
The first is that when the price of core assets (such as big cakes) falls, many people will throw away their chips because of panic.
The second is that time cannot be wasted, that is, although many people have also experienced darkness, they often choose to throw away their chips before dawn.
The third is that the price rises too fast, for example, the target you bought has tripled, and you are afraid of a decline later and choose to throw away your chips to make a profit.
Therefore, there is a saying that market transactions are actually more of a psychological game. At the current stage of the crypto market, it should be in an interesting atmosphere: any decline can generate fear, and any rise will cause fear of falling again.
Therefore, two different mentalities will be generated:
One is that you dare not buy if it falls, and you dare not buy even more if it falls a little bit
The other is that you dare not buy if it rises, and you dare not buy even if it rises a little bit
And, if I remember correctly, when the price of Bitcoin was hovering around $17,000 and $28,000, the market seemed to have similar emotions.
Perhaps, the current market may still need some time, because more people need to have greater fear. Only when more and more people have fear and constantly wear out their patience, once the market enters the rapid growth stage of the late bull market (the late stage will be shorter than the mid-term stage), then the accumulated FOMO emotions will allow more people to "bravely" chase highs and go all-in.
Then, the scythe will ruthlessly make most people fall into a complete despair and push the market back into a new round of big cycles.History will not repeat itself, but it often rhymes.
Many people enter this field hoping to create wealth. There are two main ways to create wealth: passive investment and active investment. So what are passive investment and active investment?
1. Passive investment
I personally prefer to call this investment method firm investment, that is, to continuously invest and accumulate positions according to plan over time, rather than frequently doing swing trading (not selling immediately), which is also the investment method I have been using in recent years.
And almost everyone can understand this strategy, which actually looks very simple, but there are actually not many people who can really stick to it. So why is this?
2. Active investment
Compared with long-term passive investment, active investment is more flexible, and there are many ways to invest actively, which needs to be selected according to your own interests, expertise, preferences, etc.
For example, if you think you are the chosen one, you can invest through contracts. If you are a technical person, you can use K-line to buy high and sell low. I think that active investment is mainly about being able to make profits in the short term.
In short, most newcomers tend to prefer active investment, while some experienced market veterans tend to focus on passive investment. In fact, there is no good or bad difference between these two types of investment. As long as it is suitable for you, it is good for you.
3. Investment strategy
At this stage, according to our expectations, this round of bull market has entered the mid-term stage. Although there may be some good opportunities in the future, the risk will actually be greater in the future. If you are new to this field and are not ready in many aspects, it is recommended that you try to learn and observe as much as possible.
In fact, there is no shortage of opportunities in this field. It is better to actively prepare to participate in the next cycle than to mess around and lose all your capital during this bull market. Of course, if you still don’t want to miss the opportunity of this bull market, you can try a small amount of funds (recommended to be less than 100,000 US dollars) to experience the process of building a position and the fun of trading.
So how to do it specifically?
First of all, according to the consistent style of Huali Huawai, the first thing to put is definitely position management, that is, according to your own situation (capital size, risk preference, etc.), the position is divided into different levels and numbers, such as:
- A-level position (low risk), buy Bitcoin/Ether, target 2-3 times
- B-level position (medium risk), buy the top projects in the track you are most optimistic about, such as AI, RWA, GameFi and other tracks, target 5-10 times
- C-level position (high risk), buy some new projects with low market value and potential for growth, target 10+ times
- D-level position, keep at least 10% of the position in cash (USDC/USDT) to deal with low-probability events, such as market flash crashes caused by sudden black swan events
Clear position management is mainly to avoid emotional operations in your investment. At the same time, it should be reminded that the above is only a basic plan, and you can expand on this basis (learn from one example and apply it to other cases). Among them, buying operations refer more to buying in batches, that is, reducing the average cost through DCA while reducing the risk as much as possible, or buying on dips to build positions, rather than going all-in.
So how should long and short cycles be defined?
In fact, there is no strict definition for this. Different people have different definitions. For example, if someone holds a currency for a week, he thinks he has held the currency for a long time!
