How to Preserve Wealth?

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1. Manage Your Emotions

Once a person gets overly excited, it’s really easy to go astray.

For example, in spot trading and contracts, every time there’s a significant drop, everyone’s emotions are very down.

Most people will actively seek information on Twitter to see how the future market will trend.

However, seeing the market drop makes most people bearish.

At this point, if you notice many people on Twitter being bearish, this psychological cue will affect your judgment.

So as long as there are a few people who are bullish, you will take them as an outlet for your emotions.

Why do I understand this so well? Because I’ve been that outlet many times……..

Irrational emotions can lead to irrational actions, resulting in chasing highs and cutting losses.

2. Learn to Cash Out

In the crypto world, if you don’t know how to cash out, you will never make money.

Set a goal: on the basis of your principal, earn 10% or 20%, and cash out your profits.

This should be determined based on the current market conditions, but don’t turn all your profits back into principal. Based on years of losing money experience, this compounding model isn’t suitable for the crypto world.

The benefit of cashing out profits is that even if you lose your principal later, in extreme market conditions, you can still enter with profits.

This approach can prevent you from knowing that an opportunity has come but suffering from a lack of resources.

3. Only Engage in Cognitively Aligned Activities

You can do what you understand. You can choose not to do what you don’t understand, or you can approach it with a zero-sum mindset.

But don’t go against your understanding; pretending to understand can lead to significant losses.

The logic above is useful whether in the crypto world or other fields.