Currently, there are too many altcoins. During the previous altcoin season, most altcoins outperformed Bitcoin. In this round of altcoin season, not many have outperformed Bitcoin.
The outcomes of an altcoin season are threefold: massive gains, massive losses, or continuous massive losses. A handful manage to exit with massive gains to buy cars or houses, while some switch part of their positions to Bitcoin. The third type is very few. Without experiencing two cycles of bull and bear markets, don’t claim you can succeed.
Unless you possess the right insight, innate talent, luck, and timing, along with ancestral blessings, you can achieve it all at once.
I once advised people not to invest in altcoins and to convert profits into Bitcoin in a timely manner. But if you do not want to invest in Bitcoin, then you have to invest in altcoins.
Then it is simple; borrow someone else's mind. The risks in the crypto market are extremely high. Either you don’t believe it and don’t buy, or you believe it early and buy early. Remember, when the risks surge high, and you chase in, then it drops. Most people perish here. It depends on whether you can handle it.
The only enemy on the road of trading coins is yourself.
Investing is actually an industry with a very high threshold, but you only need a mobile phone/computer, a phone number, and an ID card to enter the CEX cryptocurrency trading market. However, this does not mean you will make money. The cryptocurrency market is ultimately composed of people, and human greed, anger, ignorance, arrogance, and doubt are all vividly displayed here.
01 About Gambling and Altcoins
Playing with altcoins is gambling; holding Bitcoin is the right path. This is a rather bizarre viewpoint currently in the market. Dollar-cost averaging into Bitcoin is strongly recommended by many big players, but which of these big players has not relied on altcoins, or even CX coins, in their early success?
Listening to big players hype up dollar-cost averaging into Bitcoin and then blindly jumping onto that path—isn't that gambling?
Whether it is gambling or not does not depend on the type of coin; the essence of a gambler's mentality lies in ignoring the current trend and acting based on one's greed, fear, and hopes. For many, the crypto space is purely a giant casino; many people also view the A-share market as a casino.
Viewing the market and the crypto space with this mindset, such individuals do not need to stay here; wouldn't it be more enjoyable to have some fun in Macau? Looking at the market with a gambler's eyes will inevitably lead to a miserable outcome. The moment you step into the market with a gambler's mindset, you are already ensnared by the web of karma, and the tragic ending is predetermined. No matter how you struggle, it will always be a gamble of life.
Returning to Bitcoin and altcoins, there are always people who belittle the altcoin community. Without the original altcoin Ethereum, would Bitcoin have achieved its current success? Bitcoin, as the pioneer, and the subsequent altcoins have a symbiotic and complementary relationship, not a competitive one. Bitcoin itself cannot unleash the full potential of blockchain; it needs altcoins to extend and expand. In comparison, for ordinary investors, high-quality altcoins are actually a better choice because the odds are relatively higher.
But there is a basic fact: in the long run, altcoins that can outperform Bitcoin are extremely rare. Of course, in any market or era, those who become legends are always a small handful.
02 About Contracts and Technical Analysis
Like altcoins, contracts are also a double-edged sword; futures contracts in the crypto space are basically equivalent to a casino.
I had never dealt with contracts before; the external narrative is that playing contracts is like giving away money, and there are many reported cases of people losing everything, leading to a huge misunderstanding of contracts. It wasn't until I started engaging with contracts at the beginning of this year that I discovered they are a great tool.
The main criticism of contracts is liquidation, which only depends on the individual. I only invest a small portion of my total capital in contracts, dividing the contract capital into 10 parts for operation, and I set stop-loss for every trade. While I haven't made a profit, after playing hundreds of times, I haven't been liquidated to zero. Most people trade without a systematic trading approach; for instance, when the market moves against them, they lack any stop-loss mechanism, instead, they fantasize about an immediate reversal, thinking if it doesn't liquidate you, who will it liquidate?
As a tool, contracts themselves are neither good nor bad; it depends on the user.
Because of my engagement with contracts, I had to delve into technical analysis. Like everyone else, I previously thought technical analysis was nonsense, just hindsight wisdom. It was only after I engaged with it myself that I realized it’s not that simple. Technical analysis is not about making predictions; that's just superstition.
The essence of technical analysis:
Technical analysis is essentially a translator; there are too many factors affecting coin prices in the market, and you do not know which factor carries the most weight, but all factors will form a definitive result—that is the price. Technical analysis describes what is happening in the market through prices; that is its value—it is a language that people can understand.
The biggest change brought by technical analysis is knowing how to avoid risks. For example, I recently bought an IEO coin, which increased nearly 8 times. In the past, I would either sell halfway due to fear of heights, missing out on later profits, or hold onto it after reaching a peak and getting stuck; today, this coin has already dropped by half. This time, I used a simple moving average system and found that this coin had shifted from a bullish market to a bearish market on a larger timeframe, indicating significant downside risk, and I sold in time to preserve most of my profits.
People are easily influenced by external voices, leading them to reject or favor things they have never understood. This is a problem that must be changed.
03 About Greed and Fear
Rejoicing in material gains, grieving personal losses. When prices rise, it’s a revolution; when they fall, it’s a scam. Emotions are always the biggest obstacle on your investment path because they disrupt all your plans. In fact, many people have trading plans; when the selling point in their plans appears, they sell promptly, and when the buying point appears, they buy. But with emotions in play, the results often go in the opposite direction.
For example, during the 312 crash, many said that their trading systems had already signaled a sell before the crash, but due to the market's fervor and endless expectations surrounding Bitcoin's halving at that time, they did not want to miss out on the big market, and greed took over completely. The 312 crash was the biggest retribution, turning boundless joy into infinite sorrow.
No market movement is worth fearing or being surprised by. If you still feel fear or surprise about any movement, it indicates that you are still controlled by your emotions, and you should continue to hone your skills in the current market to turn all this fear and surprise to dust.
How to eliminate greed and fear? One common method is through continuous exposure to the market. Here, I have a better convenient method—Zen's 'koan'.
I consider myself a half-hearted Zen enthusiast; I meditate daily on the koan, pondering 'who is chanting the Buddha’s name', while questioning in my mind, who exactly is chanting. This is the koan method, which can also be applied to various thoughts, such as 'who is initiating the greedy heart', then pursuing it; you will quickly come to a question about where this thought originated. In fact, at this point, greed has already dissipated.
The same reasoning applies to 'who is afraid', 'who is happy', etc.
04 Summary
People are easily disturbed by external factors; in terms of cognition, they tend to inexplicably reject or favor things they have never understood. Emotionally, they are easily swayed by the fluctuations of K-lines, while the true voice of the market is always in the present.
Investing is very similar to spiritual practice; it involves refining one’s character through various methods, clearing layers of fog to comprehend the truth. Investing is a form of practice, and on the path of practice, your only enemy is yourself.
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