Most of the cases I've heard about people losing money in the cryptocurrency world are due to emotional excess. For example, hearing someone say a coin is good and can multiply dozens of times, or seeing someone make money daily, leads many to rush in during emotional highs, but they don't understand the core of how that person makes money, resulting in losses.
Those who dare to rush in and can make money have an extremely thorough understanding of market sentiment.
One group understands emotions while the other is swayed by them. Those who understand eat up those who are swayed.
People are the most easily swayed by their own emotions. In other matters, losing control of their emotions might only lead to losing part of their charm, but in the cryptocurrency market, being swayed by emotions results in being eaten alive.
Making money in the cryptocurrency world, as I mentioned before, is about not letting your emotions interfere. During bear markets, you should dollar-cost average into the best assets; this is the simplest strategy. Don't keep changing it up, don't worry about how much others are making compared to you. All of this is emotional interference. Please completely eliminate your personal emotions and just buy day after day. However, many people suddenly change the amount they invest, change the assets they invest in, or change the timing of their investments. Little do they know that countless tricks are actually emotional-derived mistakes.
If you want to go from ordinary to expert in the cryptocurrency world, there's one more thing you must do: face the market without emotions while also being able to utilize emotions. This is the hallmark of a true cryptocurrency expert.
Many people invest in a coin, whether it's worth buying depends on the valuation. If it's undervalued, buy; if overvalued, sell. This is the method taught by many in the market, for example: there is an asset A, the undervalued price is 4, the overvalued price is 10, and the reasonable valuation is 5-9. They patiently wait for it to reach 4 and decisively buy in. They never consider that when market sentiment is out of control, valuation becomes impossible. As a result, the price drops directly to 1, and they feel that such a drop must lead to zero, so they cut their losses and sell.
When the market is abnormal, it is all about emotions, devoid of rationality. Yet, the greatest profits often come from emotions.
The largest sum of money the market can offer you is the emotional part. The valuation money brought by overvaluation is flat and even, and your rigid valuation system can only let you eat the edge of the valuation bubble.
This situation is bound to happen in the market, and most people are making money from market valuations, which creates a lot of competition. Many can understand it, while in the emotional bubble zone, many cannot see it, so they won’t go for it. If you understand it, you can reap the biggest profits.
You need to truly understand how to control emotions, to maintain your own position while also analyzing the market's emotional intensity. This is the core of making money in the cryptocurrency world. If you consult experts who make money in this field, they are actually speaking the truth. However, regarding emotional control, some people can calm down with a few deep breaths, while others can't sleep at night. This is something you have to navigate yourself.
You might see someone in a group say a certain coin is good, offering you a low-price private placement. You're easily swayed and go straight to buy. However, some people have their own insights. The market has not yet shown the emotional intensity they are familiar with. They remain unshaken by the winds and patiently wait for their opportunity.
In the cryptocurrency world, undervaluation and overvaluation are actually not very useful because your intense focus on these will surely lead your emotions astray. The market may be undervalued one moment and then bounce back, but if you trade based on valuations, you might have already sold, only for the price to come back, leaving you at a loss.
If you want to root yourself in the cryptocurrency world and make a lot of money, it's not just about learning some techniques, looking at valuations, or understanding the fundamentals of the cryptocurrency market. These are merely delayed evolutions of market information. The core is being able to utilize emotions. In fact, we can only see the real-time changes in emotional aspects. For instance, during extreme panic, if you can identify that the market is using emotions to prey on people, your profit will come from those who fail to recognize the market sentiment and dare not buy. You can keep buying, while during market surges, it's actually using emotions to attract people in, creating a massive bubble, while you can continuously exit from the emotional bubble, profiting from those who excessively invest and fail to sell.
Being unable to utilize emotions means you can't make money, while fighting against market sentiment will lead to significant losses.
The worst situation is when you are obviously unwilling to lose and try to fight against market sentiment. This will definitely lead to significant losses, such as when you open contracts and hold positions, thinking you will break even if you sell, or sell when in profit, continually adding margin. The more you resist, the more you get caught up, thinking that if you can just endure this time, it will be fine. However, your emotions are too small compared to the market's, which can swiftly engulf your meager attempts to go against it.
Some people buy spot assets and average down, adding a little every time it drops by 5%. By the time it drops 30%, they are already out of bullets. The more it drops, the more they buy, thinking that as long as it rises by 20%, they'll break even. However, in the end, it drops by 90%. This is the embodiment of using emotions to fight against the market, which is a huge mistake.
The assets that allow you to utilize emotions and follow market sentiment are the good ones. Stick close to them for profit.
Little do they know, there is a type of decline in the market that is emotionless; if that's the case, it's not a good thing. So why would you average down?
I have navigated the market for many years and deeply understand the opportunities and traps within. If your investments are not going well and you feel unwilling to accept losses, leave a comment with 999! I will share insights!
