The virtual currency market is turbulent, stories emerge one after another, and the money-making effect is greater than ever before.
Everyone has gains and losses, and everyone has the result of cognitive monetization. No matter how much you earn or lose, whether you enter the market early or late, in this cycle, your cognition determines your degree of monetization.
As a leek who entered the circle in November 2017, I ate the tail of the bull market in 2017, the entire bear market in 2018, the bull market in 2019, and DeFi in 2020, and finally the entire bull market. In this round of bull market, I got a return rate of 1734.47%, which is more than 17 times compared with the early stage of the bull market. And I successfully cleared 70% of my positions at 7 pm on April 14, 2021, and successfully escaped the two major drops in the cryptocurrency circle on April 18 and May 19.
I was also a loser in the beginning, but later I summed up my experience and now my investment and trading logic is very simple.
The emphasis is on integrating knowledge and action, and restraining greed.
Why did I write this article? Because I have been asked this question too many times, so I wanted to write it down, share it with you, and summarize myself. I have my sights set on the next cycle. For the remaining time, 30% will continue dancing with Gouzhuang. Advance and retreat freely.
Tell me about my experience
I am a junior college student, working in an ordinary unit, with no financial background, not from a prestigious school, and I have to use Google Translate to speak English. In November 2017, I learned about Bitcoin by chance. The wealth effect of Bitcoin attracted me, so I brought 20,000 RMB and entered the circle with a longing for wealth.
After entering the circle, I saw introductions to virtual currencies such as Bitcoin, Ethereum, and Ripple. I know nothing about circulation, technology, or white papers. I only know that I can barely buy one Bitcoin, but I can buy several Ethereums. You can buy 40,000 XRP. So I decided to buy Ripple.
After I bought Ripple, it doubled very quickly. I sold half of it and kept the profit. When it quadrupled, I sold all of it. In the end it increased 50 times. This was the first time I made several times the money very quickly, and it was also the first time I understood what selling flying meant. At that time, I didn’t have the concept of a bull market. I just thought that making money in this circle was too easy. I could just pick up money!
By January 2018, I had a capital of 100,000 RMB. When I was trading cryptocurrencies, I did not forget to learn. I found that many cryptocurrencies increased by dozens or hundreds of times as soon as they were listed. It turned out that this was called IXO. So I started researching how to get involved.
I also discovered that leverage is allowed in the cryptocurrency world, and there is no requirement for margin trading. This is because when trading A-shares, there are capital requirements for this, which do not exist in the cryptocurrency world. So I planned my funds, using half of them for 2-5x leverage and the other half for IXO.
The story of IXO is very simple. I started visiting various websites, joining various investment groups, reading white papers with Google Translate, and joining Telegram groups to discuss the feasibility of the projects. I was very excited at the time because I could actually participate in the operation and suggestions of a company, and communicate with the company’s boss, technical team, and members. I was also their early shareholder! As long as the project is successful and listed on the exchange, I can also enjoy dozens or hundreds of times the profit! 10,000 can turn into 1 million!
Dreams are full, but reality is very skinny. Those who participated in that period know that starting in 2018, various agents ran away, and project owners collected money and ran away. Because this model was at its peak in 2017, 2018 was actually the end. I did not enjoy the dividends of IXO. My money was also wasted.
The story of leverage is simpler. I began to study the so-called technical indicators, KDJ, golden cross, death cross, divergence, and moving average. I watch the market every day and am more obsessed with it than watching Hollywood blockbusters. In the ups and downs of the K-line, I sold my stocks when they fell, held on to them when they rose, and then sold my stocks again when they fell. There were also various pins. With high leverage and high volatility, I only lost 20,000.
At this time, I still didn't give up, and I began to summarize the reasons why I lost money:
Participated in the end of a story, so there is no money-making effect.
In the unregulated, highly volatile cryptocurrency market, the volatility of the assets themselves is huge, and there is also leverage. There is no other more comprehensive data to make my own judgment. In addition, I don’t have time to watch the market every day, so I am destined to be wiped out by the volatility. You should not use leverage anymore!
So I started looking for two things:
New gameplay and story
Tools or data sources to assist you in trading
In 2018, a well-known platform emerged: Fcoin.
I discovered it by accident. Its mining mechanism is not available in the cryptocurrency circle. ZJ himself answered questions in the Telegram group and did it himself. So I paid attention to its listing time, which was 10 am on May 23, 2018. I still remember this date. If there is any deviation, don't take it seriously, because this is my memory.
Before Fcoin opened, I did some thought for a long time. Should I go all in or control the risk and participate with a small position?
It’s not that I can’t afford to lose 20,000 RMB. At most, it’s just a wasted trip to the cryptocurrency world. It doesn’t hurt me. If I want to come back, I still have tens of thousands of RMB to invest.
Here is a knowledge for you:
New things often have huge market dividends and premiums. Because people have huge differences in their valuations, it is easy to cause irrational investment behavior.
After I figured this out, I decided to go all in.
I won’t tell you the story that happened later. Those who understand will know. I made some money. After that, various copycat projects appeared in the cryptocurrency circle, and I participated in them all. I made some profits and some losses. Here I suffered from path dependence.
A new thing, you can only play Dragon 1 and Dragon 2, the ones after that are not dragons, they are all bugs. Don’t have the illusion that they can replicate the success of Dragon 1 and Dragon 2, at least I haven’t seen it.
For example, dogecoin and shib are dragon 1 and dragon 2, and for other zoos later, the money-making effect will only become weaker and weaker, but the risk will become higher and higher.
During this process, because I have been in the circle for a long time, I have come into contact with more friends. Some of them are in the capital market, which is what everyone calls the primary market. I think that I used to be a retail investor, and I lost money when I invested in IXO. It should be because of problems with the source of information, price cost advantage, project evaluation advantage, etc. Now that I have friends in the capital market, I should be able to make money, right?
So I exchanged the money I earned from Fcoin into ETH and continued to invest in projects, both domestic and overseas. Looking back now, there are many excellent projects, such as Coti, Rsr, Harmony, etc. But I didn’t hold on to any of them. Because at that time, I only looked at the short term, pursuing quick returns and not paying attention to long-term returns.
Here is a knowledge for you:
Don't be too sensitive to short-term gains and lack imagination about long-term gains.
Short-term fluctuations are often just a reflection of emotions, while long-term gains are a reflection of value and cognition.
It seems that I had a pretty busy 2018, but in fact, Bitcoin fell for the entire year.
While trying new things, I was also looking for something to assist me in trading. In mid-November 2018, I found it: grid trading.
It solves my psychological anxiety caused by fluctuations during normal trading, and also solves my troubles of not having time to watch the market (after all, I am also a person with a job). During the decline, it helps me buy in batches, and during the rise, it helps me to stop profit in batches. I no longer have to watch the market and make judgments. As long as the price fluctuates within the range I set, it is fine. I operate spot and there is no worry about liquidation. I can accept making coins when the market falls and making USDT when the market rises. So except for my own long-term positions and small positions of copycat positions, my usual transactions are basically grid trading, and I don’t do manual swing trading myself. Because I can’t do it well, I face it calmly.
Time came to 2019, and I had been using USDT to run grid trading. At that time, I had no coins, only USDT, because the market fell for a whole year in 2018. Excluding the coins I invested, I only had USDT in my hands. I was scared by the drop.
In 2019, there was a bull phase, which was the IEO of platform coins.
Does this new thing that has never appeared before look familiar to you? Isn’t this what I understood when I played Fcoin?
I did not participate in IEO this time, but I felt that IEO was similar to the IPO of Hong Kong and US stocks, and had a money-making effect, so there should be a demand for platform coins, so I bought a lot of BNB.
There was an episode in the middle. I privately launched a platform coin called BitMax. I was quite optimistic about it at the time, so I bought quite a lot. But its lock-up mechanism is terrible, and it takes a long time to lock. At this time, I found that they officially opened leverage and supported short selling of their own platform coins. This is something I haven't seen before. So everyone understands, right? New stuff (look back if you don’t understand).
So in the first half of 2019, in addition to running grid trading, I also used part of the money to do two operations. The first operation was to sell all my BitMax locked coins at a discount off-market, and then I used the money to go all in on the BitMax platform coin spot. The second operation was to buy a lot of BNB.
Here is a cognition for everyone:
As long as the bears are alive, the rise will not stop.
There are counterparties in both buying and selling. Only when the selling orders are thick enough and the buying orders are strong enough can the orders be taken.
Of course, you will say, there were enough shorts yesterday? Why did it fall so much? Because yesterday was a time of panic and serial liquidation, buyers will naturally choose to wait and see to stabilize the mood and wait for the shorts to appear.
The result of buying BitMax was as I expected, and also exceeded my expectations. The market started to rally the next day after I bought it, and I made some money in the end. When the market was in a frenzy, I sold all of it, and the next day, it plummeted by 50%. This was the first time I saw the bulls kill the bulls.
The result of buying BNB is the same, but without the excitement of BitMax.
After making money, I started looking for new opportunities in the market. I happened to hear a friend say that he had privately invested in Pizza Dog’s platform coin, which was about to open. I had heard of this platform coin, and I was not optimistic about it, but I thought that because it had been delayed for too long, there might be an opportunity to buy at the bottom when it opened, so I went to wait for a wave on the night of the opening. Sure enough, it crashed. I asked my friend about the cost of private placement, and it was a serious break. Then there was Ozora Tsubasa, and I heard that he had a good character. I bet he would have some face. So I bought at the bottom. It was just a small position, and I classified this operation as a speculative operation. After buying at the bottom, the market started to pull up. 5 times in 3 days, but I was greedy and inflated. I didn’t sell it, and finally closed at 3 times the profit.
As you can see here, I no longer go all in. I can allocate my positions myself and I know clearly whether my operations are speculative or based on clear analysis and cognition. But I also started to become arrogant and greedy, because I had a solid foundation and could afford the losses from small positions.
Give you an understanding:
It is possible to let profits fly for a while, but the premise is risk control and position configuration!
After experiencing the leveraged short selling of BitMax, I witnessed the bulls killing the bulls (a foreshadowing here, the 2020 timeline is a key point). I have also tried IEO and bargain hunting Pizza Dog.
I gradually became arrogant and began to believe that some of my cognition was useful. When I saw that Bitcoin was rising and other altcoins were not moving, I started to put all the money I earned into altcoins. The result was predictable. I was trapped and the market kept breaking new lows. When I was all in on altcoins, I once wanted to all in on ChainLink, because it was a coin that did not rise in the bull market in 2017. There must be something wrong when things are abnormal. So I paid attention to it, but I didn't think more about the oracle. So I missed it. This is a digression. After the altcoin was trapped, I was slapped in the face by the market and woke up.
Give you an understanding:
Your knowledge makes you money, it is given to you by the market. It is not because you are really awesome, you just happen to cater to the market trend. Always be modest and cautious, and keep in awe of the market.
After I got stuck, I started learning again. Because I think my knowledge is not invincible, I can iterate. In December 2019, I discovered DeFi. And I wrote a Medium article about DeFi.
Soon the story came to 2020. The market was buzzing about the Bitcoin halving, so I followed the trend and made some grids of halving currencies. The results were good, doubling my money.
When I was paying attention to the news in the cryptocurrency circle in March, I suddenly discovered a development: the lending business broke a new high. I have experienced the situation where longs kill longs, so I feel a little uneasy. Are all people maxing out their leverage and betting on a big bull market after the halving? With so many people shorting, wouldn’t it be a chain reaction if their positions were liquidated?
So I cleared all my positions when Bitcoin was at 8600. The story after that was that I avoided 312, bottomed out at 4500 Bitcoin, successfully bottomed out Ethereum at 166, and the grid trading heaven and earth order was also opened at this time, with a price range of 2000-20000. At that time, many people laughed at me and planned to run out of the range in a few years. As it turned out, it was out in 286 days. Of course, I didn't miss the subsequent DeFi craze. I bought AAVE when it was called Lend. I missed Sushi mining because I was too busy with work.
In the second half of 2020, more and more institutions began to buy Bitcoin, and DeFi's money-making effect became stronger and stronger. I think Bitcoin is about to rise. Judging from the cycle, Bitcoin is about to become bullish. So in November 2020, I opened a lot of Bitcoin orders, which can be seen in the previous articles on my official account. Tiandidan is a condensed version of my trading philosophy, and grid trading is just a carrier of the trading philosophy.
During this period of operation, I always adhere to a principle, ordinary transactions are not manual, only use the grid transactions I choose, long-term positions have cost advantages, and must be held tightly. Ignore anything else in the currency circle. Even if I want to play, it is a small position.
I won’t go into the story of this year, but on April 14, I cleared 70% of my positions. There was a sharp drop that day, and then a strong rebound, with a tendency to break the previous high. ETH also broke new highs repeatedly. I really wanted to enter the market again, but I told myself that my knowledge only went so far, and chasing the rise again was beyond my cognition. Later, I couldn’t control my hands, and opened several Ethereum world orders with a small position to chase the rise, and made a small profit. It can be regarded as an operation, so I participated. In fact, I was struggling with whether my profit-taking was right or wrong, and whether I would miss a lot of opportunities. In the end, I still firmly believed in my judgment, and bowed to the market development beyond my cognition. I did not enter the market with a large position again, and achieved the unity of knowledge and action. And there was a big crash yesterday. Once again, I overcame my greed to take advantage of the market from beginning to end and avoided the major pullback by combining knowledge with action.
Give you an understanding:
It is never wrong to take profit, as putting money in your pocket is the real money. There is never a shortage of opportunities to enter the market, it’s just a matter of how long you wait. Buy when no one is interested, and sell when life is at its peak. Integrate knowledge and action.
Random Thoughts
The market randomly wanders like a drunkard, and it is unrealistic to try to find the Holy Grail in one trick. Only by constantly iterating cognition and overcoming desires can we make steady progress. While moving forward steadily, we will accumulate strength, break through bottlenecks and achieve qualitative change.
You don’t need to choose so many assets. Just pick a few, hold a large position in them, and keep your faith.
You must have the vision and perspective to navigate through bull and bear cycles. Short-term fluctuations will only cause friction to your psychology, constantly eroding your confidence and firmness in your own cognition.
Adhere to the core values of blockchain without wavering. Although mainstream currencies may rise slowly in the short term, they are not slow in the long run. You just need to wait patiently for a cheap entry opportunity.
Always improve your risk control awareness and keep the last bullet.
Maintain curiosity about the industry, maintain a neutral view of assets, and allocate positions rationally.
The simplest idea is to perform two operations in one cycle:
First operation: Wait until a big drop occurs, buy bravely, and enter the market in batches with long-term positions and grid trading orders;
The second operation: Hold on tightly and wait until the market is bustling, restrain greed, sell most of the positions, and leave some profits to fly for a while. No one can escape the top accurately. That is a god, not a human. Grid trading is to take profits in batches and buy when prices fall at most points in time. Ignorance and cyclicality.
Ignorance, no judgment on market trends, as long as it is within the grid range, it will automatically buy at a low price and sell at a high price.
Periodicity, the heaven and earth are only a very large range. We do not look at the last few days or dozens of days, but rather a complete cycle, until it runs out of the extremely large upper range.
For the rest of the time, you just need to control your hands. Don’t care if my coins increase slowly or others increase quickly. Don’t care if others increase 10 times a day or you increase 10% a day. Don’t care about the various temptations in this impetuous cryptocurrency circle. Just care if your heart is firm. All your wealth comes from your cognition.
The way of life is simple, while troubles will only lead to poverty.
This article is written for myself as a summary, and also for you.
After experiencing yesterday, perhaps you are feeling lost or desperate. This article is to tell you that there is a person who has experienced the same thing as you and almost lost all his money and had to quit the circle, but in the end he persisted, summed up his experience, and used cognition and some luck to defeat the market. Now I share my knowledge with you, hoping it will be of some reference and help.
