In yesterday’s post, I shared with you my approach to investing in digital currency liquidity: the general idea is to buy in a bear market and then wait until the bull market is near its peak to sell.
This approach comes with risks, the biggest of which is to have a general judgment of the bull market trend and not to deviate too far from the real situation.
And to make a more correct judgment of the general bull market, we need to determine the basic drivers of each bull market and the key factors that may change the direction of the bull market.
In the case of the current bull market, my basic judgment is that institutional push + U.S. water release is the fundamental driver, and of these two factors, U.S. water release is the most central. This is why I pay close attention to the U.S. financial and fiscal policy, as long as the judgment on this point is not fundamentally wrong, then we will not be fundamentally wrong about the subsequent direction of the bull market.
At the moment, it looks like the U.S. water release policy hasn’t changed, so the logic of the second half of the bull market hasn’t changed either, so in this case, we might as well try to boldly take our chips and continue into the second half, and not sell easily in the process.
Basically, in past bull markets and in the general sense of the investment market, often in bull markets large-cap and blue-chip stocks are much smaller than small-cap stocks. Since this is the case, we might as well let go of the small cap stocks and let it run wild in the bull market. As long as we control our positions and control our risk, the worst that can happen is that the money invested in this part of the market will go to zero but it will not seriously affect our overall return, but if a miracle occurs, we will be able to get an unexpected gain with a small gain.
The same idea applies to the digital currency market.
Going back to last year, when I bought Matic, it was clear that bitcoin and ethereum were blue chip stocks and Matic was a small cap stock. So now that we’ve bought Matic as a small-cap stock, we might as well be mentally prepared when we buy it and try to let it run into the mid to late stages of the bull market to see how it turns out. At best, this part of the money invested will go to zero, but with bitcoin and ethereum taking the lion’s share and weighing down the bottom of the position, this part won’t hurt even if we lose.
This is not only how I did it with Matic, but also with the other small coins I bought at the time, and I did it this way.
Of course there is a fundamental risk, which I have repeatedly mentioned in my previous articles: if I am wrong about the second half of the bull market, then the whole set of methods I mentioned earlier will be wrong. What happens in this case?
The digital currency market is unique in that I believe it has far more room to grow than any traditional investment market, so I believe it has a bright future ahead of it, so even if we do run into this risk, I believe we will still see a miracle in 4 years when bitcoin halves again, and it will be even better than today, so it’s totally worth it to continue to endure 4 years with chips into the future.
If you’re asking me what makes me believe we’ll see a bigger miracle in 4 years? Then my answer is faith.
I would only use this approach in the digital currency market, but for other traditional investment markets, I would be very cautious and would conservatively set a return target and cash out when I reach it.
It’s worth the risk to try this once-in-a-lifetime disruptive thing, digital currency.
Of course does this approach work for everyone? Definitely not. Everyone has a different appetite for risk and naturally a different attitude towards it. So we can develop a set of methods that we are comfortable using and take advantage of according to our own risk appetite.
No matter how we do it, our goal is the same: to get the most out of it as much as we can within the risk we can handle.
Obviously, it is a pity to sell too early on a subject like Matic, and by reflecting on this case we are able to improve and enhance our thinking about realizing it (Disclaimer: Matic’s current price has gone up hundreds of times, so it is not a small risk to enter at the moment, I bought it last year, so the cost is very low, here is an example of matic not recommending everyone to buy it). So that when we come across similar varieties again in the future, we will no longer let ourselves be left with such regrets.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/some-of-my-thoughts-on-investment-realizations-ii/
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