How to Preserve Wealth?
1. Manage Emotions Well
Once a person gets carried away, it's really easy to go astray.
For example, in spot trading and contracts, every time there's a significant drop, everyone feels very down.
Most people will actively go to Twitter to find information and see how the future market will move.
However, when there’s a drop, the bearish sentiment is the psychological trend for most people.
At this time, if you see a lot of bearish people on your feed, this psychological hint will influence your judgment.
So as long as there are a few people who are bullish, you will see them as an emotional outlet.
Why do I understand this so well? Because I've been used as an emotional outlet many times......
Irrational emotions can lead to irrational operations, resulting in chasing highs and killing lows.
2. Learn to Realize Gains
In the cryptocurrency world, if you don't understand how to realize gains, you will never make money.
Set a goal: earn 10% or 20% based on your principal, and realize the profits.
Specifics depend on the current market conditions, but don’t turn all profits back into principal. Based on years of losing money experience, this compounding model is not suitable for the cryptocurrency world.
The benefit of realizing profits is that even if you lose your principal later, in extreme market conditions, the profits can be used to enter the market.
This operation can avoid the frustration of knowing an opportunity has arrived, but being short on bullets.
3. Only Engage in Cognitively Aligned Activities
You can do what you understand. If you don't understand something, you can choose not to do it, or approach it with a zero-sum mindset.
But don’t go against your understanding, pretending to understand what you don’t know; a gambling mentality can lead to significant losses.
The logic above is useful whether in the cryptocurrency world or other circles.