No matter what investment you make, including how you do things, principles are important! The most basic investment principle in the cryptocurrency world is not to lose your capital. The second principle is to keep the first principle in mind and remind yourself all the time! Don’t lose money, don’t lose money!
The logic and value beliefs of currency selection
First, look at the logic behind many people buying coins. Most people first look at how much a certain coin has risen, then look for relevant news, and go to the community to ask the so-called "coin circle leeks". Then they will find a support for themselves and find out the reason for the continued rise. At this time, various news will only feedback that the coin will continue to rise, and then they will rush in. After buying, they will pay attention to the trend of the coin and choose to sell it for money. They are also afraid of selling too early and getting a swollen thigh, or if they sell it, they will simply buy it back and wait for an opportunity to sell it for money.
If you don't sell it later, the price will fall. It's easy to find an excuse for yourself, such as you are a value investor, a believer in blockchain, not caring about short-term prices, etc. Humans have always been like this, constantly behaving rationally, and are born with the ability to behave rationally. That's what we call "self-inflicted incompetence or mistakes" to find many reasons to convince yourself. We often tell everyone to know how to stop losses and keep the principal. The previous article also talked about some of the dealer's operating methods. If you make a mistake, you may lose everything, and all the profits before.
Learn to admit that you can't do it, that you have made mistakes, truly understand your own thoughts, and admit some of your incapacities instead of denying or rejecting your mistakes.
This is actually the correct way for us to learn investment. Since we don’t even know what we want, or don’t even admit some of our bad ideas, how can we set realistic goals?
Let's analyze the logic of this idea. In fact, many times, we don't really believe in these currencies, let alone the teams behind them. This is why many people think of "taking money for safe havens", because we think cash is more reliable than currency, and we trust cash more, so we buy things we don't believe in, and then expect more people to buy them. When the price rises to a certain level, we will deal with the digital currency in our hands. That is the real reason why most people lose money.
As the saying goes, "Don't sell something you wouldn't buy yourself."
For many people, when they buy a digital currency, they don't buy it themselves like shopping. But when they buy it, they wait for the right time to sell it. Strictly speaking, they don't buy it, but resell it. It is true that many smart people have made a lot of money in this process, but a large number of people have also lost money.
Most people involved in blockchain keep saying "I believe in blockchain, I believe in a certain currency", but they are just using some air coins to exchange RMB or USD in the hands of users, which is completely different from what you call "belief". They use actions to prove that they do not believe in this currency. In fact, when they have such thoughts and actions, they are already food in this food chain.
The real secret to getting rich is to believe in value and continue to hold value, and price is one of the prices you pay. That is, we believe that an item has long-term intrinsic value, and the secret to acquiring wealth is to continue to own more of such items.
For example, we believe that a company can create more and more wealth in the long run, and the secret to our wealth is to continue to own more shares of the company, rather than reselling them. If we believe that we will continue to create value for the rest of our lives, we should not continue to sell our labor and time, but invest more time and money in self-education and development, if you don’t know where to put yourself. Then, invest the spare money in yourself. The starting point for doing this is that you believe that every dollar you invest in yourself now will be returned ten times or a hundred times in the future!
Make money, learn from the bulls. I hope you can accumulate the necessary knowledge before the next bull market comes. As long as you have enough patience to wait for the prey to come in the currency circle, you can find more and better prey.
2. Seize the principal and take the opportunity to profit
People are wandering in the cryptocurrency circle, not knowing whether they will be cut. Investment must have risks, but high risks are bound to be accompanied by high returns. Do you want to have a better cryptocurrency trading? Please keep in mind the following basic principles.
1. Keep a stable mentality and protect your capital
Buffett has a famous saying: Three principles of investment: First, avoid risks as much as possible and protect your principal; second, avoid risks as much as possible and protect your principal; third, firmly remember the first and second points.
He also said: Stop loss is more important than profit. At any time, stop loss is the first priority, and profit is the second. Graham also said: The first thing to do when investing is to protect the principal, and the second thing to do is to refer to the first point. It can be seen how important it is to protect the principal!
2. Look patiently, not blindly
Investment, especially in the currency circle, is a test of people's psychological endurance. Everyone must be calm and not be too impulsive. For example, when you see a currency soaring, don't go all in without thinking, as it is easy to get stuck. Don't chase high prices easily. Others see the stock market plummeting, and immediately panic, sell in a panic, and finally leave the market at a loss. This is the legendary "birth of leeks"! Friends in the currency circle must make decisions after calm analysis. Always remember to keep the principal and not lose profits.
Just like a wolf waiting for its prey to appear, we must learn to wait for good cryptocurrencies and good opportunities, and not always be favored by the public. We must think independently.
Be patient when entering the market. Everyone should hold on patiently. Don't worry about whether you will be stopped out. Since you have chosen to enter the market, don't have any doubts. Be patient when buying. Don't think that you will definitely make money, let alone get rich tomorrow. Buy, hold, be patient, etc.
3. Rational judgment and value choice
The development of blockchain has now reached the stage of practical application, so when choosing a token, you must pay attention to whether the token has a practical application scenario, whether it is a real entity or a concept coin.
We have the priority to choose Bitcoin. In the field of digital currency, Bitcoin BTC is still the industry leader and the ancestor of digital currency. As countries around the world gradually recognize and approve the legal transactions of Bitcoin, its position in the field of digital currency is unshakable.
The next ten major currencies are BCH, ETH, LTC, ETC, BSV, etc. The dealer should remember that the grapevine is not well-informed, so don't spend a lot of money to play, it is easy to be trapped, unless you are a short-term trader!
4. Determine the investment method that suits you
The most traditional way of financial management is bank savings, which is a way of financial management that guarantees returns. To establish an investment method that suits you, you must first sort out the common investment products, which currently mainly include: cash investment products, debt investment products, equity investment products, commodity investment products, etc.
So, I can’t tell which category cryptocurrency investment falls into. Anyway, in the currency circle, short-term investment is speculation and is more suitable for those with strong technical analysis skills. For long-term investment, although the short-term returns may not be very high, the later-term returns will still be considerable.
5. Diversify your investments to reduce risk
Don't put all your eggs in one basket, but don't put too many in one basket either. If you invest your funds in the same place, you will inevitably face increased risks. Once you make a mistake, you will suffer heavy losses. However, it should also be noted that if your investments are too dispersed, you will inevitably reduce your profit margins and increase management costs.
There are two ways to diversify investment risk:
First, diversify your investments across various investment projects, allocate them in a reasonable proportion, and don't invest in all of them.
Second, even if everyone has invested in a project, they must learn to control their positions and not put all their money into it.
The ultimate way to control risk is to research the investment products and understand their internal rules. The deeper your understanding before investing, the smaller the risk after investing, the greater the return, and the less time and energy you will spend on it.
Summary: Investment refers to the act of carefully analyzing and studying in the hope of achieving capital preservation and satisfactory returns. Anything that is losing money must be sold; anything that is profitable must be retained.
It is not difficult to make good asset allocation or choose to invest in digital currency projects, but it is difficult to grasp them. Because the temptation of the currency circle is too great, the coins you bought remain unchanged. When other coins grow wildly, you can easily become unbearable and sell other coins in a hurry, but you may miss the good opportunity. With it, it is the biggest highlight of blockchain. Generally speaking, when most people are optimistic about the currency market, they should sell. If most people have a bad view of the currency market, they should buy it to get better returns.
The views in this article are for reference only and do not constitute investment advice. The cryptocurrency market is volatile, so investment needs to be rational.
