Recently, some friends have been asking me to share trading-related content, but I actually don’t like discussing these topics. Many people in the crypto world are very impatient, wanting to make quick money, and are speculators. I am someone with a slow-burning personality who insists on value investing and long-term trading. So I consider myself an investor.
What investors say, speculators naturally find hard to accept. Yet I cannot help but want to talk more; how much everyone can take in is up to them. In this lesson, I will first discuss mindset with you. After being in the crypto world for a while, you may find that many traders who maintain long-term profits always talk to you about mindset.
Does trading still require a mindset? So what is mindset?
It’s actually very simple; I understand that the mindset can be divided into several levels.
1. Mindset: Maintain rationality, calmness, and discipline; do not let market emotions control, interfere with, or dominate you.
2. Wisdom: Accumulate insight and decision-making ability regarding the market through long-term practice and learning.
3. Skills: Master the ability of trading analysis and operation, such as fundamental analysis and technical analysis.
4. Style: Develop your own unique trading style, such as trend trading or mean reversion.
5. Discipline: Establish well-suited trading rules for yourself and strictly adhere to them, maintaining patience.
These five points integrate to form a person's trading mindset. If a person does not have their own mindset, then all trading is essentially a gamble; you may gain thirty or fifty points today, but sooner or later, you will lose it back due to bad luck. Therefore, I do not recommend anyone follow others’ trades. The logic of following trades is that someone else is making money, and it has nothing to do with you. Once you get used to following trades, it shows that you do not understand; you have no thoughts or ideas of your own. Even if you can earn some money through following trades, it is only luck, and it does not belong to you. Once you leave the trader you are following, you will not be able to continue making profits. So if you want to make money in this circle, you must cultivate your own trading mindset. The results of trading are simple: profit or loss. But going from loss to profit is difficult for everyone.
The first step in establishing a mindset is to cultivate your own philosophy and taste. There is a lot of news in the market, continuously flowing. There are many KOLs in the cryptocurrency world, not less than 80,000; everyone has their own opinions and analyses. At the same time, some people are bullish while others are bearish. What some people say may be viewed as treasures by you, but to me, it may just be nonsense. Some people only believe in market analysis, while others only trust candlestick charts. In short, no matter what you choose to believe, you must have your own philosophy and taste. There are no completely objective viewpoints in the world. What you believe to be true is true, and you must stick to it. Then, repeatedly learn, ponder, practice, and refine on this path. Ultimately, form your own trading rules.
This is the fifth point of the mindset, discipline. Although the principle sounds simple, very few people can actually achieve it; at least half cannot. Once you have your own rules, you need to strictly enforce them. However, most people cannot truly adhere to one rule for the long term. Why? Because there are too many temptations and insufficient character. Market conditions are constantly changing, rising and falling, and they always affect your mindset and emotions.
Sometimes, abandoning the rules may immediately allow you to earn a bit more or lose a bit less. At this time, many people will wonder whether to abandon the rules.
In fact, most people will choose immediate benefits. However, once we have violated the rules for the first time, it becomes difficult to ensure long-term compliance with those rules. In other words, your trading rules become ineffective.
The patterns of market trends are knowable; however, the processes and details within them are not. Long-term trends are inevitable, while short-term prices depend on market emotions. Therefore, we must adhere to rules, which can also be referred to as trading strategies. Because strategies have a higher win rate, trading is essentially a game of win rates. If you can do this, then congratulations, you have achieved unity of knowledge and action.
This is the first point of the mindset. Once you have discipline and mindset, you will find that trading is actually very simple, not as complicated as you imagine. It’s like cooking a pot of porridge; before the porridge is truly cooked, it will emit a fragrant aroma. You cannot eat half-cooked porridge just because you are hungry; you must endure and calmly wait for the result. Good porridge relies on slow cooking.
Many people ask me what cryptocurrency to buy. I always recommend Bitcoin, but many feel that with little capital, it’s hard to make money from Bitcoin, so many turn to low-volume altcoins. This approach is very undesirable in my view.
Why? Because these individuals do not understand who is determining your fate. The ones with control in the exchange are always the market makers, which is very unfair to retail investors. Because everyone, including large institutions, once they invest money into the market, their fate is handed over to other traders. No one can grasp their own fate; even if your analysis is impressive, it doesn’t hold much significance.
There is only one situation: unless you have a large amount of capital to intervene in price trends to a certain extent. Institutions with substantial capital have advantages; they can intervene in price trends to a certain extent. Therefore, one reason I suggest everyone play Bitcoin is that the market cap and trading volume of Bitcoin mean that institutions capable of intervening in its price hardly exist.
Some small market cap cryptocurrencies may have half of the holdings controlled by the market makers. In such cases, there is no fairness at all. There are also people who like to watch news released by the media, such as trying to predict the rise and fall of Ethereum based on whether it can pass the ETF. These news can convey good or bad news, but it is useless. Because the price is still determined by the traders; if traders don’t feel good and do not engage in actual trading, then it’s useless no matter how much good news there is. Many people have suffered losses in this regard, so many prefer to short without actually shorting and to go long without actually going long.
The trap of market analysis is that what you can see is always what others want you to see; what you see is what you want to see. Whether it rises or falls, you can find some reasonable explanation from past news. It seems logical, but is actually extremely foolish. I have interacted with many analysts; in reality, they do not participate in trading; they are only responsible for creating content for trading institutions for payment, or they gain traffic and followers on social media and then make money by selling high-priced strategy memberships. When you understand that anyone's viewpoint is unrelated to the price, you basically possess the second point of the mindset: wisdom.
Nine things to avoid after achieving financial freedom in the cryptocurrency world.
First, do not let those around you know that you are trading cryptocurrencies; there are many reasons for this, and those who understand will naturally understand.
Second, do not let others know how much money you have made; do not share profit charts or asset charts to avoid unnecessary trouble.
Third, do not post about your wealthy lifestyle on social media; apart from your close relatives, no one wishes you well, and showing off can easily invite jealousy.
Fourth, after acquiring significant wealth, maintain distance from people you originally knew. Many crypto big shots, after achieving financial freedom during the bull markets of 2013, 2017, or 2021, did the first thing: resign, and never returned to work. The second thing was to delete as many of their old acquaintances as possible.
Fifth, do not get involved with gambling and drugs; gambling can destroy a person psychologically, while drugs can destroy you physically.
Sixth, do not insult others, emphasize harmony, and do not let anger affect your financial luck. Stay away from toxic people who drain your energy; if you encounter disagreements, simply block or delete them. Spending any extra time on them is a waste.
Seventh, do not actively do good deeds, do not pity anyone, let go of the desire to help others, and respect others' destinies. Just focus on yourself and let the rest happen naturally.
Eighth, do not invest recklessly in areas you are unfamiliar with; one cannot earn money beyond their understanding. Ninth, absolutely do not engage in physical entrepreneurship unless you do it for fun and not for profit. Given the current economic environment, physical entrepreneurship is extremely risky. I am currently preparing to ambush a project that will surge in the short term; doubling your investment is not a problem. Friends interested in spot trading but lacking direction can like and comment for free sharing.
