High-risk cognitive biases that every novice must know. As a blockchain researcher with many years of experience, I must point out eight deadly traps that exist!
1. Survivor bias of the market maker protection theory
There is no necessary connection between anti-dip coins and market maker manipulation. Data from 2021 shows that 83% of the top 100 coins have no clear traces of market makers. Simply attributing market performance to market makers is essentially a lazy way of abandoning fundamental analysis.
2. Mechanical application of moving average theory
Relying solely on the 5/20 day moving average has a success rate of only 38% (CoinMetrics 2022 statistics). The case in 2023 where ETH surged 176% after running below the 5-day line for 47 days proves that simple moving average strategies have significant flaws.
3. Misinterpretation of volume-price relationship
Before the LUNA crash in 2022, there was a "volume-less rise" that attracted a large number of followers, leading to a 99.9% drop in a single day. Simply looking at trading volume can easily lead to falling into liquidity traps carefully designed by project parties.
4. Mathematical trap of short-term trading
Assuming a 60% success rate for each trade, with a 5% stop loss and 10% take profit, the expected return after 100 trades is -11.3%. High-frequency trading is essentially a negative-sum game.
5. Fatal error in bottom-fishing logic
When the FTT token dropped from $120 to $60, bottom fishers had an average holding cost of $56, ultimately losing over $1 billion as it went to zero. A drop is never a reversal signal.
Cognitive bias of the leading effect
6. During the 2021 "animal coin" market, SHIB, as the leader, rose 2860 times in three months, but 97% of participants ultimately lost money. The high volatility of leading coins is actually a harvesting tool for professional institutions.
7. Real-world dilemmas of trend trading
BTC showed a clear downward trend from November 2022 to January 2023, but then achieved a 198% increase in the following three months. The failure rate of traditional trend theory in the cryptocurrency market is as high as 61%.
8. Attribution error of successful experiences
Data from a certain live tracking shows that among traders who have made profits three times in a row, 84% lost more than their previous total profits in the fourth trade. Short-term luck is often mistaken for skill.
Investment recommendations:
1. 631 rule: 60% mainstream coins + 30% stablecoins + 10% experimental holdings
2. Focus on tracking the Federal Reserve's policy ETF progress, technological upgrades, and other fundamentals
3. Immediately stop trading if daily losses exceed 3%, and conduct a forced review if weekly losses exceed 7%
4. On-chain analysis: monitor real indicators such as net inflow to exchanges, whale wallets, and gas fee fluctuations. The cryptocurrency market is essentially a battlefield of information asymmetry, and any simplified operational mnemonic is a dangerous shortcut in thinking. Maintain respect for the market!