I believe that an excellent trader must be patient to endure prosperity!
‘Five poor, six exhausted’—this is the case every year. According to cycle theory, which months can you trade in a year?
‘Five poor, six exhausted, seven might not even turn around’; every year from May to August, I am in cash.
So when is the right time to enter the market for trading cryptocurrencies?
1. Enter the market at the end of September and clear positions at the end of November.
2. Enter the market before the Spring Festival and clear positions in April.
3. Execute the two iron rules above; of course, individual small-cap coin scenarios are excluded.
Fourth, learn how to find hundred-fold coins; combined with a bull market, that equals getting rich.
My investment system is divided into six sections, ranked by importance based on my experience.
1. Energy management
The purpose of energy management is to allow people to be more focused and have faster reaction and recovery abilities. Whether concerning the whole or the part, having correct understanding and decision-making abilities regarding things is crucial. Having abundant energy is like having a powerful army, fearless and unstoppable.
1. The importance of physical and mental strength.
2. When your health is poor, you need to rest more.
3. Develop good health habits.
4. Cherish your energy and understand energy allocation.
2. Emotional management
In the crypto world, a day is like ten years in the real world. The crypto world is a wealth amplifier; while everyone fantasizes about getting rich in the crypto world, the emotions of this amplifier will be magnified hundreds or thousands of times compared to outside the circle.
The FOMO emotions in the crypto world, the feeling of missing out, the envy of seeing others making money, and so on, all these emotions will ultimately transform into your anxiety. Your anxiety or emotions will become the tools for the big players to harvest.
So in the crypto world, you must manage your emotions; be humble in victory and resilient in defeat.
As for why one feels anxious, my understanding is that it is due to unclear strategic investment goals, only seeing others making money in the crypto world while being unable to correctly assess one's own conditions, including capital, ability to earn outside, and research capability, etc. When losing money or seeing others profiting, it creates a significant shock, and anxiety arises.
The more anxious a person is, the more distorted their investment actions become.
Moreover, the more anxious a person is, the more they want shortcuts, and the more they want to rely on others for the wealth secret.
The more you fail to form your own investment system, the easier it is to become harvested chives.
So how can we alleviate anxiety? I summarized it into three steps.
1. Maintain good health.
Health always comes first! When the body is good, you eat well, sleep well, and your spirit will be good. With a strong spirit, you focus on your work; you are your own god, and you will be less affected by anxiety. I have never seen a person with very good sleep quality suffer from anxiety. The roommate who introduced me to this circle told me that he could fall asleep immediately once he closed his eyes, so his energy recovery was very good. I have always believed that good sleep is the foundation of his investment success, even he often neglects this issue. As a long-time observer who has trouble sleeping, I am able to identify this perspective.
I have been diagnosed with depression and anxiety. I know that not sleeping well can really drive a person to the brink of collapse, and even lead to suicidal thoughts. Anxiety makes it even harder to sleep, creating a vicious cycle. Therefore, if you're anxious, find a way to help yourself sleep well; only then will your body gradually improve. (I will share how Qian Chuan Bai improved sleep when I have time in the future.)
2. Set investment strategic goals and execution strategies.
You must set investment strategic goals, and these goals must align with your personal situation. Then develop corresponding execution strategies, such as considering how much your capital is, what your advantages are, what kind of investment operations suit your personality, what your worst-case scenario is, how you perceive your execution ability, etc. At the same time, you must also consider the background of the overall market trend to achieve as realistic strategic goals as possible.
For example, if your capital is 200,000 RMB and you usually have little time, yet your ability to make money outside is decent, your goal in the crypto world is to make a couple of hundred thousand. Now, it's simple: your execution strategy should involve less trading since you don't have that much time and energy. You can invest most of your funds in ETH and allocate some to assets like SOL, then forget about it. In a bull market, multiplying your investment several times should not be a problem, allowing you to worry less and not be affected by short-term fluctuations.
In fact, with proper execution strategy, your 200,000 RMB could easily earn millions in a year. As long as you find five projects with hundred-fold potential in the early bull market, investing 40,000 into each and holding until the bull market, even if none yield a hundred-fold return, hitting just 40 times should give you 20,000 * 40 = 8 million. The question is whether you can identify such projects and hold on to them.
However, if your goal is to take 200,000 RMB and turn it into tens of millions, or even billions in this bull market, then you must consider whether you have the strength and action to match your goals.
Once the strategic goals are clear, execute according to the established execution strategy. Even if there are changes in the market, you won't panic like before, and naturally, you will be less affected by emotional fluctuations, which will in turn reduce anxiety.
To combat anxiety, do as the instructor says: you do your thing, and I do mine. No matter how the outside world influences, as long as you can grasp the overall trend and strictly follow a strategy that suits you, you will definitely see the dawn of victory!
3. Cognitive system management
When your energy management and emotional management are in place, you will have a stable foundation for sustained execution; at this point, you should solidify your understanding and establish your own crypto cognitive system.
The crypto world is a battlefield where you have to make money, which means earning money from those whose understanding is inferior to yours. It's hard to earn from the big players, so don't even think about it. Thus, rapidly improving your understanding is crucial; it's the core of making money in the crypto world. The crypto world is a quick recognition monetization game of buying low and selling high. Knowing when to buy and sell gives you a chance to make wealth.
The cognitive system is the core competitiveness of making money in the crypto world! How to establish a cognitive system, I personally summarize the following components.
1. Establish an outline of the crypto world.
Establishing an outline of the crypto world allows you to see further from a strategic height, have an overall awareness, and be able to look from the whole to the part, from the big to the small, and to the details. At least it allows you to visualize the historical context of the crypto world, the development of various sectors, and understand many of the tactics of major players. I can't clearly describe this feeling; the information density in the crypto world is too high, and the information iterates too quickly. My personal insight is that you must have an understanding of the entire outline of the crypto world, just like drawing; you must first outline the contours in your mind before delving into specific details.
You should at least know which segments exist in the crypto world: BTC, ETH, BTC ecosystem, L2, chain games, DeFi, NFT, AI, RWA, Depin, etc. You should also understand the development of these segments, such as which segment is currently rotating and who might be the next. Establish a perspective that overlooks all segments from a high point, then find the segments and operations that suit you. You can lay low, buy directly, sell, or observe. In short, if you do not establish an outline of the entire crypto world and Web3 projects, you will always be led by others, increasing the probability of anxiety and losses.
Qian Chuan Bai suggests you draw a map of the various segments in the crypto world on a piece of paper, outlining the contours of this crypto landscape.
2. Establish your own information collection system
From a strategic perspective, the core of making money in the crypto world is to enhance understanding, earning money from those of lower dimensions; from the perspective of each battle, making money in the crypto world relies on information asymmetry. Having information asymmetry allows you to buy at the lowest price before the price surges, and when other investors flood in, you are already selling with the big players.
You need to understand the information asymmetry in the crypto world and the direction of information flow. At the top are project parties and major players, followed by their peripheral institutions or networks, and then spreading down to KOLs, news media, group friends, etc. Therefore, when you see a cryptocurrency is about to rise or fall, this information may have been passed down through layers for a long time, and what finally reaches you is just to have you take the bait.
Therefore, it is very necessary for you to establish a suitable information collection system for yourself:
Twitter: Follow KOLs with high probability, strong analytical logic, and significant community influence, and get information promptly; for instance, I often follow Dayu, Wei Shen, Dao Ge, Wizard, and Mamba on Twitter.
Paid groups: Join VIP paid groups with high probability and strong research capabilities to directly purchase information; this is the most convenient, but if your execution ability does not keep up, joining a paid group does not guarantee profits.
News media: Obtain information from news media. I have tried a trick that worked in the bull market: when seeing positive news, buying immediately has a high probability of rising.
Friends in your group: Make friends with a few capable and high-probability group members, and filter out beneficial information from their messages.
At the same time, technical analysis can also support the judgment of whether the news is reliable; if there is no discrepancy, go boldly into it. Because many data points in the crypto world are on-chain, technical analysis can also provide some information, such as main force building information.
In short, you need to find a suitable information collection and acquisition system in the crypto world based on your investment goals and personal situation, just like gathering intelligence, trying every possible way to obtain first-hand information and then buy.
3. Cultivate research ability.
Why cultivate your research ability? Because some information is derived from research and analysis. Everything has its rules; as long as you grasp some characteristics of the segments in the crypto world or the market trends of certain projects, and reference various aspects such as market data and segment narratives, you can naturally infer the future market value direction, and based on future valuations compared to the present, you can make investments.
The research ability tests a person's overall comprehensive practical ability, requiring regular accumulation and sedimentation. I am also constantly summarizing; in the future, I will update my research methods in this section.
In summary, I believe that cultivating research ability is about strengthening understanding, shortening information gaps, and enhancing quick decision-making and execution skills.
4. Discuss opinions but do not have biases.
The charm of the crypto world lies in creating many asset issuance methods, continuously packaging them through various narratives, technologies, or other concepts to attract global capital (chives) to participate, ultimately competing during a bull-bear cycle to see who can build their position at low prices and escape at high prices. Whether in DeFi, chain games, or other sectors, it ultimately cannot escape this pattern.
So when a new narrative or other matters arise, be sure not to hold prejudices or even reject them. Those who held biases against $ORDI in 2023 and did not buy have long since cried in despair.
Really, you can have your own opinions, but you cannot have prejudices because prejudices can harm people!
4. Possess strong execution.
When you are energetic, unaffected by any negative emotions, and have a high understanding of the crypto world, with your own rapid information channels and research methods, to make money in the crypto world, you must possess strong execution. Without execution, no matter how high your understanding is or how early you know the information, it is just empty talk. You know the market will rise in the future, but if you don’t buy, the wealth will have nothing to do with you.
The information density and changes in the crypto world are vast; you do not need to seize every opportunity because it is difficult to have the energy and strength to seize every chance. Enhancing self-awareness has already helped you find a suitable strategy; when you have a strategy, you must take action, and like a hunter, be ready to strike when the time comes.
Simply put, it is better to give up bad opportunities, but once a good opportunity arises, you must seize it decisively and invest significantly.
Therefore, whether you're chasing airdrops, looking for alpha, engaging in secondary research, or other areas, your execution must keep up.
For example, teachers need to monitor several projects every day, without fail, for several years; various airdrop experts on Twitter also work tirelessly on various projects every day; and all kinds of secondary analysts face various data analysis daily...
Others are smart and diligent, have high perceptions, and strong execution; therefore, it is expected that they can make money in this market. If you are still lazy, lack execution, and are fantasizing about getting rich overnight, that is highly likely to be nonsense. Even if you get rich by luck, you will likely lose it back due to lack of skill, and if your virtue does not match your position, problems are bound to arise.
So everyone present, diligence can make up for shortcomings; the best way to enhance understanding is to practice extensively, whether by reviewing projects, participating in projects, or analyzing and reviewing projects. You must have execution; otherwise, everything is just empty talk.
Execution is a reflection of your understanding, reaction ability, and perseverance; it should be ingrained like military or athletic discipline.
With execution in place, results will follow.
But by the way, the intensity of execution is determined by your investment strategy. Just like whether to engage in new projects for self-defense; some people need it, some don't, because the execution strategies differ. Some need to go out every day to forage, while others might not move much but hit the target every time, enough to last six months.
5. Capital position management
If having abundant energy is like possessing a victorious army.
Having emotional stability is like having a commander who can make calm judgments on the battlefield.
Proper understanding is akin to having a military strategist who is fully aware of the enemy's situation.
Strong execution means the commander has a group of fierce generals who can fight tough battles.
Position management is the logistics support team in this unit, which is key to ensuring success on the front line.
However, I believe that in the crypto world, logistics support is actually on the front line; position management is the top priority. You must clearly understand how much ammunition you have on the battlefield, how many troops to deploy, how many battles you have won or lost. Everything else is prepared for position management because the crypto world only involves two actions: buying and selling positions; that is the ultimate battlefield. Knowing how to buy is being a disciple; knowing how to sell is being a master.
Based on my own experience, I can currently categorize the content into several sections:
1. Capital management:
Be aware of your capital situation; it’s best to use a spreadsheet to track which funds are long-term, which are mid-term, and which are short-term. If you have too many projects, the capital flow can easily become chaotic.
Simply put, you must at least distinguish which CEX and DEX wallets you have and how many assets are in each, and whether these assets are safe. After all, asset theft in the crypto world is not uncommon.
2. Trading position management:
Trading position management should be done according to your own execution strategy; you must plan how much capital to allocate to each project, set your preset profit-taking and stop-loss levels. The top priority in the crypto world is to protect your capital (including capital safety); never overextend yourself. I have several small coins that made dozens of times profit just because they overextended, ending up only getting a little meat.
Regarding this content, I will take time to summarize methods later, but in short, good capital position management will lead to beautiful results.
6. Review ability
The purpose of writing this article is for self-review. I mentioned earlier that it is a bloody lesson:
In the crypto world, the ability to review determines the speed of progress, and the speed of progress will further impact the efficiency of making money.
While treating my depression and anxiety, I discovered an interesting thing: the real objective event A that happens in this world is one thing, but what I see is an event A+, because event A+ contains my understanding, emotions, feelings, and even factors influenced by the environment at the time, making it difficult for me to clearly recognize event A. So how can I see event A as clearly as possible? It is to use the power of words to record it, to record it faithfully. When you face a pile of text or a pile of numbers, you can better distinguish what is a fact, what is an appearance, what is emotion, and what is your lack of understanding. The closer you get to see the real event A, the more naturally calm your heart will be, and you will discover the underlying reset.
So, if you often feel unlucky and haven't made money, it might be a good idea to reflect and summarize your trading approach at that time. You will discover many issues. Of course, if you have succeeded, it’s even more important to summarize valuable experiences, because without summarizing, one can easily become complacent and might face significant losses next time.
I recommend everyone to review more; believe in the power of reviewing!
7. Others
1. Learn to hold tightly.
If you hold a cryptocurrency that you are optimistic about, you must hold it tightly. The best way is to find a team and become family together. Only by finding a team and continuously exchanging ideas, attending meetings, chatting, etc., can make your uncertainty turn into certainty, and you won’t fear short-term fluctuations. Observe closely, those who make big money in the crypto world generally fall into two categories: one has a very high understanding and knows the rules and can hold on; the other buys and forgets and only remembers during the bull market. But it is generally difficult for ordinary people to achieve both, so it is best to find a group of people to support each other through the long march.
2. Don't complain, have a grateful heart
Strong individuals never complain about their environment; stop complaining and have a grateful heart. From now on, stop saying why others don’t tell you the secrets or why they don’t bring you along. Complaining is very destructive, so stop this behavior as it consumes energy.
People must have a grateful heart! I have encountered many setbacks in the past two years and am very grateful to the friends who helped me in my lowest moments. When people are at their lowest, they can see the world more clearly, especially when they are plagued by illness and have nothing.
3. Be cautious when introducing outsiders
Be cautious when introducing outsiders into the crypto world, even if they are good friends. People's perceptions differ, so even if you know there are great opportunities in the crypto world, others may not think the same and might even consider it illegal. Moreover, be careful not to easily reveal to friends that you are in this circle; the wealth effect in this circle is significant, and whether you become rich or lose it all can easily affect your existing relationships.
So, those who can enter this circle are destined.
There is a saying that 'the most people lose money in a bull market.'
Thinking back, it makes sense; BTC keeps hitting new highs, why? Let’s list the mistakes that retail investors make.
No research, blindly following trends.
With a small amount of capital, holding too many positions.
After a loss, failing to understand deeply and stop losses in a timely manner.
After floating losses, choosing to lay flat without continuous follow-up, feedback, and optimization of position strategy.
In fact, as long as you continuously track—feedback—optimize, and keep researching and learning, it is possible to reduce losses and expand profits. A clear pattern is that when Bitcoin slightly declines (2-3%), altcoins generally plummet; when Bitcoin slightly rises (3-5%), altcoins generally surge.
Many beginners often forget that at the same price level, a drop requires a larger increase to recover. For example, buying at 10 and dropping 50% to 5 requires a 100% increase to break even.
Believe me, knowing many truths doesn't mean you can live a good life.
Is understanding deeply internalized? Is it felt understanding? Is it through personal experience that one gains understanding, or merely heard knowledge? Surface understanding is just the extent to which I have heard this phrase, without deep thinking through the brain, being stingy with thought judgment. Such understanding is indeed useless to you and will ultimately validate the notion of 'not living well in this life.'
Trading is not just about understanding the principles to profit; it must start with a plan. Success starts with a plan; without a plan, it is a plan for failure.
In trading, failing to maintain consistent operations, from a wisdom perspective, is ignorance of ignorance; therefore, thoughts can only be ideas, and executing is just a fantasy. Analyzing the essence, it's because you don't understand the rules of your operations, don't know the probabilities of stop-loss occurrences, and the overall profitability, so after several losses, you lose confidence in the system and start doubting, then look for another system. When you encounter similar issues next time, you seek new systems, and this repeats itself. Such is human nature.
Failing to maintain consistency in trading ultimately stems from insufficient depth of understanding regarding your profit logic, the robustness of the system, inadequate retracement, and lack of confidence in estimating potential losses from unsuitable market conditions.
You need to understand your trading logic, what type of money can you earn? When is it not advisable to try, what are the reasons for losing money? For me, it is making small breakthroughs against the trend. Testing the system's profitability probability, understanding the maximum loss in extreme loss situations, once you have thought through and considered it clearly, you can naturally achieve consistency.
Trading is like life; maintain inner calm, embrace imperfection, and understand simple persistence; perhaps that is where happiness lies. Being driven by human instincts to chase passion ultimately leads to futile efforts.
There is a path through the mountains of books, diligence is the way; the sea of learning is endless, hard work is the boat. You will definitely gain something. To help others is to help yourself; with fish, there is more fishing! Share cryptocurrency trading experiences and layout strategies every day!
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