Reflections on the Realization of Digital Currency Investment
In yesterday's article, I shared with you my approach to investing in digital currency: generally buying in a bear market, and then selling when the bull market is close to its peak.
This approach is accompanied by risks, the biggest risk of which is to have a general judgment on the trend of the bull market, and this judgment cannot deviate too far from the real situation.
In order to make a more correct judgment on the general bull market, we need to judge the basic driving force of each round of bull market and the key factors that may change the direction of the bull market.
Taking this round of bull market as an example, my basic judgment is that institutional promotion + US release of water is the fundamental driving force, and among these two factors, US release of water is the core. This is why I pay close attention to the US financial and fiscal policies. As long as there is no fundamental error in the judgment on this point, then we will not make a fundamental error in the subsequent direction of the bull market.
At present, the water release policy in the United States has not changed, so the logic of the second half of the bull market has not changed, so in this case, we might as well try to boldly continue into the second half with chips, and do not sell easily during this process.
Basically, in the past bull markets and the investment market in general, the growth rate of large-cap stocks and blue-chip stocks in bull markets is often much smaller than that of small-cap stocks. That being the case, then we might as well let go of small-cap stocks and let it run as much as possible in the bull market. As long as the position is well controlled and the risks are well controlled, the worst case is that the invested funds will return to zero but not It will seriously affect our overall income, but if a miracle happens, we can get unexpected income with a small fortune.
This idea is also suitable for the digital currency market.
Going back to last year, when I bought Matic, it was clear that Bitcoin and Ethereum were blue chips and Matic was small cap. Therefore, since we have already bought Matic, a small-cap stock, we might as well be mentally prepared when we buy it, and try to let it run to the middle and late stages of the bull market to see how it turns out. At most, this part of the invested funds will be returned to zero, but since Bitcoin and Ethereum account for the majority and the bottom of the position, even if this part is lost, it will not hurt the bones.
Not only did I do this for Matic, but I was also mentally prepared for other small currencies I bought at that time, and I also did it this way.
Of course, there is still a fundamental risk here, which I have repeatedly mentioned in previous articles: that is, if my judgment on the second half of this bull market is wrong, then the entire set of methods I mentioned above will be wrong. What to do in this situation?
The uniqueness of the digital currency market is that I think its space far exceeds any traditional investment market, so I believe that its future is extremely bright, so even if this risk is really encountered, I believe that after Bitcoin is halved again in 4 years , we can still see miracles, and the miracles at that time will be better than today, so it is completely worthwhile to continue to endure for 4 years and carry chips into the future.
If you still want to ask, why do I believe that we will see a greater miracle in 4 years? Then my answer is faith.
I will only use this method in the digital currency market, but for other traditional investment markets, I will be very cautious, and I will conservatively set a profit target, and realize it when the target is reached.
For digital currency, a subversive thing that is rarely encountered once in a lifetime, it is worth taking the risk to try boldly.
Of course, this method is not applicable to everyone? Certainly not, everyone has different preferences for risks, and naturally their attitudes towards risks will also be different. Therefore, we can formulate a set of methods that are comfortable and convenient for us to use according to our own risk preferences.
No matter what we do, our goal is the same: to obtain the maximum benefit as possible within the risk we can bear.
Obviously, it is a pity to sell a target like Matic too early. Through reflection on this case, we can improve and improve our own monetization ideas (Statement: The current price of Matic has increased by hundreds of times, so At present, the risk of entry is not small. I bought it last year, so the cost is very low. Here is an example of matic, not recommending everyone to buy it). In this way, when we encounter similar species in the future, we will no longer let ourselves leave such regrets.
