Decision Traps: How to Maintain Clear Thinking in the Crypto Market

In the crypto market, investors often face three major psychological challenges: the fear of "missing the last opportunity", the uncertainty regarding the duration of a bull market, and the pressure from others' outstanding performance. The combination of these three factors can severely impact investors' judgment, leading to a series of poor decisions.

Common Consequences

• Distraction: Blindly following every trend and ignoring core trading opportunities.
• Overly Pessimistic: Losing confidence due to market uncertainty, unable to hold assets for the long term or completely exit the market.
• Lack of conviction: Without in-depth research, it is difficult to remain steadfast amid market fluctuations.
• Missing Strategy: Exiting too early due to the fear of the market ending, thus missing out on greater profits.

Coping Strategies

1. Focus on Core Areas

   • Focus on specific directions or hot topics within one or two ecosystems.
   • Make a choice between on-chain trading and secondary market trading.
   • Determine the most suitable investment direction based on your own conditions and the market environment.

2. Clarify the operation method

   • Distinguish the essential differences between investment, trading, and speculation.
   • Use a simple framework to help assess and formulate corresponding strategies.

3. Develop a clear plan

   • Determine the market capitalization range for entry.
   • Set up batch profit-taking rules.
   • Estimated asset target price and timeframe.
   • Clearly define stop-loss conditions, which can be based on fundamentals, technicals, or changes in the macro environment.

4. Self-awareness

   • Identify personal weaknesses: experience, skills, psychological biases, capital management, etc.
   • Avoid areas of weakness and focus on leveraging strengths.

5. Continuous Improvement

   • Reflect and analyze after each transaction.
   • Improve the win rate through experience accumulation and increase the position size at the right time.
   • Keep learning and progressing, avoid long-term stagnation.

6. Seek Collaboration

   • Collaborate with reliable partners to complement each other's shortcomings.
   • High-quality trading opportunities often stem from teamwork.
   • Quality over quantity: Choose partners who have a comparable or higher level in the areas you care about.
   • Expand Horizons: Establish small circles in different fields to gain broader market insights.

By implementing these strategies, investors can maintain a clear mindset in the complex and ever-changing crypto market, making more rational and effective decisions. Remember, successful investing requires not only market insight but also self-awareness and the ability to engage in continuous learning.