Follow the trend, don't go short in the bull market
In recent days, there has been a big news in the circle that the high-level executives of a well-known company in the circle have not only damaged assets but also damaged the company’s reputation because of shorting Bitcoin.
Because of the cooperation with relevant state departments, this company has temporarily preserved some of the bitcoins collected from illegal platforms for the state. The relevant person in charge of the company couldn't stand the temptation of interest in the process of saving these bitcoins, and came up with the idea of using this asset to make profits through trading operations, so he began to short bitcoins all the way from the end of last year.
The operator's idea is simple: if the price rises too much, it will fall. So he often sells short when he thinks that Bitcoin "has risen too much". But the operation along the way not only failed to make a profit, but also caused him to lose more and more of his principal, which led to increasing pressure later on. In order to fill the ever-growing hole, he used higher and higher leverage , From a dozen times, to dozens of times to hundreds of times, and finally because it is really impossible to repay the country's assets, it is revealed.
Telling you this example today is not to discuss the specific people and companies involved in the incident, but to use this example to emphasize a very basic but always forgotten law: don’t go against the wind and go against the trend.
In the investment market, if we want to obtain rich returns, in many cases, our own ability plays only a small part. Going with the trend and facing the wind is the fundamental to seize the big wind and big opportunities.
What does it mean to follow the trend and face the wind? The first thing is to clarify the main trend of the market and judge the general direction of the market's next development. This is true in both the stock market and the digital currency market, in my experience without exception.
When I mention my investment in A shares in the article, I always say that I believe in the long-term potential of our country's economic development, so I have always been optimistic about the long-term bull market of A shares as always. This is the basis for me to firmly buy A-share index funds.
The same is true for investing in digital currency. I am optimistic about its long-term development in the future, and believe that it will enter the human stage brilliantly, so I am firmly involved in this field.
Why do I repeatedly emphasize that everyone should make a fixed investment in a bear market with sluggish market conditions? It is because I believe that the bull market will definitely come, and the coming bull market will definitely bring rich returns to all persistent investors.
We waited for more than two years from 2018 to 2020, and finally waited until the end of 2020 when Bitcoin broke through the previous high, bringing the entire market into a bull market. The next thing we have to do is to wait patiently, wait for the market to continue to go higher, and wait for an opportunity for the market to give us a rich fruit for our persistence in the past few years.
How can we short the market during this period? How can you go against the wind? If you must go retrograde, the result of waiting is only "those who go along will prosper, and those who go against will perish."
Although there will be twists and turns in this trend, there will be callbacks, but I always feel that these twists and turns and callbacks are not opportunities for investors to sell short, but opportunities for the trend to rest, in order to make the trend more violent. Wanting to take advantage of this short-term pullback to short the market is playing tricks, and in the end, it may range from "picking up sesame seeds and losing watermelon", or at worst, it will be ruthlessly swallowed by the market.
In this trend, even the poorest investors, as long as they can understand the general direction, do not go against the trend, and do not short the market, they can rely on the market to enjoy their food.
Therefore, each of our investors should take such incidents as a warning, and must not go against the general trend of the market, especially when the market trend is very obvious, do not go against the wind.
