With the attention gained by the Bitcoin ecosystem at the end of 2023, along with the expectation of the Bitcoin spot ETF passing in 2024, the Bitcoin halving event, and the Federal Reserve’s release of positive monetary policy signals, it is widely believed that a major bull market will accompany the new year. This article will share some investment experiences in the cryptocurrency market, hoping to help investors achieve satisfactory returns in the future. This article is sourced from the author 0XKYLE.
Article, compiled, organized, and written by Deep Tide.
(Prior Summary:
Rich Dad’s investment advice: Bitcoin and gold are the best choices, stocks and bonds will face the biggest crash in history.
)
(Background Supplement:
Will meme coins be the best target in 2023?
)
Table of Contents
Trading
On-chain
Psychology
Life Advice
This article mainly introduces the author’s 50 lessons learned in the cryptocurrency market in 2023, hoping that these lessons will be helpful to readers in the bull market of 2024.
Before explaining the 50 lessons in detail, the author first explains a viewpoint he most agrees with: to get rid of the bear market pattern and leave room for the new investment pattern of the bull market.
He believes that the cryptocurrency bull market is highly reflexive. Although the market has recently shown some fluctuations, it is not meaningful to wait actively for a pullback before buying. Trying to time the top has little significance. Although the author himself is bullish in the market, he has also made such mistakes in the past few weeks.
Below, we will detail the lessons learned by the author in the cryptocurrency world in 2023. These experiences are not only about trading but also about integrating knowledge and action in life.
Trading
1. Patience is a position.
2. Do not trade your profits and losses.
3. Bulls continue to go long, while bears reduce their positions. In an attention-driven market, assets that attract capital are strong indicators and have strong reflexivity. On the contrary, poorly performing assets have lower attention and are likely to continue to perform weakly.
4. Examine alt/BTC and alt/ETH charts in technical analysis.
5. Trading should be process-driven – write down the steps to take and repeat them.
6. Usually, your life is guided by emotions. Trading, on the contrary, cannot be driven by emotions, such as reducing positions because you feel bad or adding positions because you feel good.
7. Most of your profits will come from a few good trades in a month/year, but you have to pay attention to the market for a long time to seize these opportunities. You cannot exit now and expect to come back to complete a great trade.
8. Slow and steady – there is no need to rush, there will be opportunities tomorrow and the year after.
9. Apply the framework I often use in cryptocurrency trading, which has been mentioned in previous articles.
10. In a bear market, focus on income and users because valuations return to normal levels, and important indicators are based on fundamentals.
11. In a bull market, focus on growth and speculation because important indicators are more reflexive, such as narratives/founders/flywheels.
12. Pay attention to trading.
13. Checking the price of long-term positions every day may seem insignificant, but it is actually a bad behavior that exposes you to the daily fluctuations of the market and leads you to subconsciously reevaluate your investment.
14. Your trading advantage is closely related to your personality and your goals in life. Understand yourself and find out what type of trader you are.
15. When you know what type of trader you are, do not try to become better in other areas. Instead, continue to hone your style. You won’t see Warren Buffett trying to become better at algorithmic trading.
16. Do not trade out of boredom, as this influence is significant.
17. Use leverage to go long in times of public fear, hold spot long when the public uses leverage, and exit the market when the public is euphoric.
18. In a bull market, you consider “the more you earn, the better,” but you should consider “the less you lose, the better” because the market will do a lot for you.
19. Trading and investing are constantly evolving – the coin you went long on an hour ago is no longer the same coin now; that’s why you have to constantly plan different scenarios and strategies.
20. Your investment portfolio is like a battleship – determine the trend, take core positions; make corresponding adjustments based on market conditions; if there is volatility, allocate to flexible positions. Changing the main position takes too much time and capital.
21. You must have an exit process because your emotions won’t do it for you.
22. Price targets as exit points are terrible because they have arbitrary possibilities – SOL at 60? 80? 120? 150? You cannot decide when to sell based on price.
On-chain
23. Always test your trades.
24. For emerging projects, what you need to focus on is people – they control all the attention in the market. Positive teams and strong founders equal narrators who can tell stories, which means more market attention.
25. Crypto Twitter (X) is always late to the market, and it is usually unwise to follow suit when you see the entire Twitter promoting something.
26. Crypto Twitter is also very toxic and time-consuming. Minimize exposure as much as possible and consider using TweetDeck for research purposes.
27. In a bear market, everything should have a negative expected value because many projects will not survive. But in a bull market, you must have a positive mindset because they will bring greater profits.
28. Never chase beta (second-best options), it is better to go long on leaders.
29. Narrative rotation is a game of short-term outperformance and long-term underperformance.
30. Position size is important. Your altcoin holdings may have increased 10 times, but if your position is only 0.1%, on the other hand, a large position may have increased 2 times, but even if your position is only 50%, you’ll earn more than the altcoin.
31. Cryptocurrencies easily distract investors. Knowing how to announce events and milestones is a strategic driver, and you should always bet on it because it means a more powerful token.
32. For low-cap altcoins, you always want to exit when the attention decreases.
33. Most people fall into the trap of small/medium-cap coins, convincing themselves that they are investing for the long term once the project cools down, expecting the market cap of the project to continue to rise. I hope you don’t deceive yourself.
Psychology
34. Do not envy others, take them as your inspiration. You cannot spend other people’s money, and they cannot spend yours. The only standard is yourself.
35. FOMO is a killer of emotions. When you feel FOMO, deal with it properly.
36. Laziness is a sin, and it greatly affects your investment (lazy to do research/try new protocols/think deeply).
37. The four main things every great trader must recognize and overcome are making mistakes, losing money, FOMO, and missing out on opportunities to make money.
38. The fear of being wrong comes from the self – to heal it, realize that your life is not just about trading. So what if you made a mistake? It’s not everything, your friends, family, and even yourself don’t care if you made a wrong trade once.
39. The fear of losing money comes from not fully accepting the risk. Accept that the market has uncertain outcomes.
40. Avoiding losses is impossible. Losses in trading are like spending income to buy vegetables in a restaurant. It’s the cost of doing business, and it doesn’t matter at all.
41. If you cannot control emotions, learn to manage them and turn them into your advantage. When you feel excited, take it as a selling indicator (and vice versa).
42. Stop trying to impose your will on the market and do not hold any expectations for it.
Life Advice
43. Never say no, but say yes sparingly. If you say yes, it must be something that pushes you forward or adds value.
44. Consistent “okay” is much better than occasional “great.” Most work just shows up every day, even if you haven’t done much.
45. What guides you to happiness is the pursuit of goals, not the goals themselves. As they say, “If you’re in this journey, then you’re already successful.”
46. Fear is in your mind. Why aren’t children afraid of insects or things we are afraid of? The answer is: we are born clean but taught to fear certain things. Conversely, we can be taught not to fear those things. It’s a matter of perspective.
47. Do not compare yourself to others. Instead of comparing, figure out if you truly enjoy what you are doing or if it’s just for social status (prestigious job, etc.).
48. Research shows that social interaction contributes to happiness.
49. There won’t be a day when you suddenly wake up and have the motivation to do the XXX task. Now is the best time to do the things you are afraid of.
50. Life is simple but not easy.
Hopefully, the above lessons will bring some help to your investment, trading, and life in 2024.