Are you feeling a bit confused as you just stepped into the market? Don't worry, the following trading rules and ways to make money will help you adapt faster to this world full of opportunities and challenges!
01. Investing in cryptocurrencies, not knowing which coins to buy
If you want to invest in cryptocurrencies but have no experience and do not want to miss this wave of opportunity, the simplest approach is to buy Bitcoin or Ethereum, or prioritize buying leading coins in popular sectors, especially those recognized as leaders by the market. Compared to the stock market, the cycles in the cryptocurrency market may be shorter, and the gains and losses can be more extreme, hence the saying that one day in the cryptocurrency market is equivalent to one year in the stock market. The benefit of buying leading coins is that there is no risk of them going to zero; what remains is the game of time and opportunity.
02. Investment requires focus
Currently, cryptocurrency investments are relatively impetuous and immature, with various seemingly persuasive investment logics flying around. What position management methods, what risk diversification principles, what wave theories... These theories and logics themselves are not wrong, but for the vast majority of people, they can at most be considered correct nonsense. Successful investment requires a focused attitude to do well in buying coins; basically, it should not exceed three types, but you can observe and select many. Watching trends, following movements, finding patterns is understandable, but for the coins you hold, you should understand their fundamentals, the sectors they belong to, technical advantages, and future potential... The more specialized and thorough you are, the better you can manage your investments. Those who blindly chase high prices or invest without understanding are mostly trapped or fail to keep up with returns. If you don't even understand a public chain's white paper and still buy its tokens, that is pure price speculation, which is gambling. Since it's gambling, then one must be prepared to lose.
03. Learn to cut losses and control desires
Regardless of the reason, everyone makes mistakes, whether it’s entering at the wrong time or buying the wrong asset. If you unfortunately hold a poor investment, what is the best course of action? Whenever there is an opportunity to exit, you must cut losses; selling at any time will not be wrong. If it is already determined to be worthless, and from your perspective, it cannot be turned around, do not hope for external help or time. Timely loss-cutting is the wisest choice.
04. Investing requires independent judgment and a code of conduct
In the cryptocurrency market, some people can make money through short-term trading, while others can profit through long-term investment. Successful investing looks at trends in the big picture while timing depends on the individual. The reality of wealth is harsh; it is more brutal than the 2-8 rule, meaning that 90% of people are destined not to make big money. This implies that if you want to get rich and stand out in an investment market with many participants, you must become part of that 10%. Most people are constrained by herd mentality; if you follow blindly, you will be like sheep, eaten by wolves. Having your own independent judgment and code of conduct is crucial.
05. Without learning and understanding deeply, don’t expect to earn steady money
Not to exaggerate or downplay, the vast majority of people hardly understand the trends in the blockchain industry or the technological applications of the coins they hold. The only thing that interests them is the current coin price, which is why there are always more losses than gains in the market. Investment is related to wealth; if you want wealth to be responsible for you, you must be responsible for your wealth. Never expect to invest your money in matters you know nothing about and receive satisfactory returns.
06. Market fluctuations are difficult to predict, but patterns certainly exist
Investing goes against human nature. To gain something in this circle, the first thing to do is to counter human nature. What is human nature? Buying high and selling low is human nature. The instinct of human nature is to avoid risk and chase benefits. Everyone wants to buy at the bottom, but that bottom can never be found; only after the end of fluctuations and the completion of cycles can we discover it through retrospective analysis. Everyone wants to chase highs, but following the mainstream often leads to being trapped at high positions. There is no room for regret in buying high and selling low because it is useless. Success in investing requires the cultivation and control of human nature.
07. Time and patience are essential for value fermentation
What is the essence of investment? It is using current purchasing power to speculate on the potential future value growth of assets. Therefore, in the cryptocurrency market, to achieve 'value for money,' there are only two ways: either to have overwhelming knowledge and discernment to find treasures, or to identify trends and maintain confidence, allowing time and patience to provide the purchased assets with space for growth. At least one of these two points must be achieved; otherwise, regardless of the form of investment or the type of coins purchased, the likelihood is high that you will be harvested, and wealth will be transferred.
08. Leverage is just a tool, but tools should not be used for gambling
Leverage, as a financial tool, has no inherent positive or negative attributes. Using leverage is an accelerator for enhancing efficiency and increasing wealth. When using leverage, it must be with spare money and within your own safety margin. Few people achieve good results when leveraging stocks or cryptocurrencies; even if they succeed temporarily, once they are trapped, it is very difficult to escape. If one must use leverage in investing, the fewer times the better, and the worse the expectations, the better. If such a risky endeavor cannot fundamentally change one's life or achieve a breakthrough in status, it is best to think twice.
Lastly, I want to say that the current cryptocurrency market is filled with uncertainty, but everyone has a need for wealth acquisition. I hope this article can provide some inspiration and reflection for cryptocurrency enthusiasts. I am also happy to share and discuss insights and understanding of the cryptocurrency market with all of you.
