Author: 1912212.eth, Foresight News
This bull market is finally what you and I wish for. After waiting for half a year since the market went down in March this year, the market finally ushered in a big explosion. The Federal Reserve cut interest rates, Trump was elected, and the SEC chairman is about to resign. The entire market trading sentiment is high and the market sentiment is strong. On December 5, Bitcoin even broke through the $100,000 mark for the first time. The market generally believes that the bull market peak may appear in the first half of next year.
However, a better market does not mean that every transaction will make money. As the saying goes, a good buyer is only an apprentice, and a good seller is a master.
The author uses the lessons learned from past failures in two currencies to analyze the mistakes made in trading, so that novices can avoid them.
Be cautious about new coins at the end of the bull market and don’t expect too much return
In the second half of 2021, the market was already at the end of the bull market. DYDX attracted much attention due to its huge airdrop and leading position in the derivatives track. At that time, the author bought it at around $10, and it doubled in just one week. The market was boiling, and it kept going up. Then I thought it would go up, but the market peaked in early November, and the return of the new currency was not satisfactory. The market began to fall wildly all the way, and finally because of holding on, I missed the best time to sell, and I had to sell it at around $2.
After this failure, I was unwilling to give up and concluded that the probability of DYDX falling below 1 was small. Then, when the market rebounded in mid-2023, I kept buying spot goods. With the positive news of dYdX V4, the market really came back and DYDX finally broke through 4 US dollars. It was November 2023, which was also the stage when the market began to rise. As a result, I thought DYDX was going to start a stage of upward trend. The interesting result was that it fell to half of its peak at the beginning of 2024, and finally left the market with 1/3 of the highest floating profit.
Reflecting on it afterwards, there were big problems with the targets chosen in the past. First of all, the team's CEO acted as if the token price didn't matter, and even resigned to pursue his "ideals". Although there were upgraded token economics, it still couldn't stop the continuous selling pressure from VCs and mining. The speed of new coins being added has also been slow and there has been no heat, causing its coin price to remain silent since June 2022.
Secondly, at the end of the bull market, you should not have too high expectations for the return of new coins. In the last cycle, the only loss was the new coin DYDX bought at the end of the bull market. On the contrary, the early coins such as DOT and NEAR were more likely to be held and obtained good returns in retrospect.
Waiting for the wind is sometimes harder than chasing it
When I was screening CoinList projects and VC lineups at the beginning of 2024, I selected the RWA token ONDO, with an average cost of about $0.3, and a heavy position. ONDO has always been one of the HOLD positions. After several swings, the number of coins decreased by tens of thousands, and I made a painful decision not to swing. However, the subsequent operations became the worst heavy position operation of the author in recent years.
In the meme coin wave some time ago, countless meme coins took advantage of the trend, but ONDO in my hands did not move at all. In addition, ONDO has never been listed on Binance since it was listed on Binance as a contract in early 2024, resulting in limited gains every time the RWA sector rises, which is quite disappointing.
This constant torment finally turned into hesitation. According to this trend, the final return may not be as high as the meme coin, so I changed my position into three parts, namely BONK, FLOKI and ZK.
The reason for choosing ZK is that Ethereum has clearly gained momentum, OP and ARB have skyrocketed, and ZK looks promising. This argument was later proven to be correct, but the timing of the meme's entry was extremely bad.
Who would have thought that as soon as the positions were changed, the music of the meme stopped abruptly. Except for ZK, the positions that were changed began to fall continuously. The most painful thing is that ONDO took off strongly just one week after it was shipped at around $0.99, reaching a high of around $1.95.
At the beginning of a new bull market, those with heavy positions missed out on a 100% increase in profits, and this feeling had a profound impact on one's mentality.
Subsequent reflections showed that one's mentality was too impetuous. When heavy positions did not rise for a long time, and other currencies rose wildly, one would easily become shaken. The market sectors rotated very quickly, and funds flowed from memes to L1, DeFi, and RWA at a very fast speed.
Many choices are made in a split second, and these decisions are often subtly influenced by past experiences.
The long-term rotation of memes made me doubt the return of VC coins, which led to an unbalanced mentality and missed huge profits. It can be regarded as a punishment for my impetuousness.
summary
There are several key points to note in cyclical fluctuations:
First, try not to buy new coins at the end of a bull market, or even if you buy them, don’t expect too much in return. The market cycle is very important. Once the market starts to turn bearish, if you run slowly, your profits will be greatly reduced.
Second, don’t switch positions to chase hot spots easily during sector rotation. In a bull market, a hot spot suddenly becomes popular, with many calls on Twitter and market sentiment, but your position remains unchanged for a long time. When you are ready to switch positions, once the market suddenly changes direction, you may be easily trapped. When you need concentration, you need the ability and courage to eliminate noise.
Third, when making a deal, you must first convince yourself what is the reason that really impresses you? Is this reason simple and direct and easy to impress others when you tell it to others? If many conditions are not met, then the target may not be so suitable at the beginning.
The planning of trading is also very important. What stage of the bull market is the market in now? If it is just the beginning, then after selling all now, are there better targets that can outperform the current positions? Why is now a good time to sell? If the reason is too random and you just look at the KOL's shouting orders without your own thinking, it is easy to be swept up by the K-line chart, and chasing hot coins will be locked up at high points and affect your mentality.
Everyone in the market has different aesthetic tastes, and their capital size and risk preferences also vary greatly. Other people’s choices may not be truly suitable for you.
The skills and mentality of trading are always being honed. Finally, even if you don’t sell at the top, you don’t have to worry too much, because no one can sell at the top every time.
