“Understand the market before making money” is a very important principle when participating in investments, especially in the cryptocurrency market – where volatility is extremely fast and strong.
Below is how to understand and apply this principle
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🧠 1. What does it mean to understand the market?
Understanding the market means you must clearly understand:
✅ What is the current trend?
Is the market in an uptrend, downtrend, or sideways?
Is the price in an accumulation phase, starting to rise, or has it already heated up near the peak?
✅ Who is controlling the market?
Are whales or large organizations accumulating or dumping?
Which coins are seeing an influx of money (BTC, altcoin, meme coin...)?
✅ What is the investor sentiment?
Are many people FOMOing or panicking?
What level is the Fear & Greed Index at?
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📊 2. How to effectively understand the market
🔍 Technical Analysis
Look at price charts, resistance – support, RSI, MACD, trading volume...
Predict reasonable entry and exit points to avoid FOMO.
🗞️ Fundamental/News Analysis
Monitor events: ETF, regulations, halving, airdrop, listing, announcements from Binance/Coinbase...
Good news often causes coins to rise, while bad news causes them to fall.
📅 Track market cycles
Know which stage the market is in within the 4-year cycle (bull run, bear market...).
Do not try to “make quick money” if in a bear market.
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💡 3. Why must you understand before making money?
If you enter a trade at the wrong time, you may easily buy high – sell low.
Not understanding the market, you will follow the crowd, making it easy to incur losses due to emotions.
The long-term winners are those who lead the trend, not those who are just lucky.