Personal Investment Strategies and Market Insights

This article discusses how to formulate personal investment strategies, achieve excess returns in the cryptocurrency market, and methods for assessing market sentiment.

Formulating Personal Investment Strategies

When formulating an investment strategy, it is necessary to consider both personal and market perspectives.

personal perspective

1. Total investable assets: Ensure that it is not restricted by loan repayment or time liquidity.
2. Investment objectives and expected returns: Choose the appropriate investment method based on the goals.
3. Risk Tolerance: Assess the maximum acceptable loss or volatility.
4. Investment time span: Consider the duration of fund usage.
5. Liquidity arrangements: Assess personal balance sheets and living expenses

market perspective

1. Market Cycle: Assess the current phase of the cycle and whether it matches your personal investment time and position.
2. Position Control: Focus on sources of risk and reasonably diversify assets.

How to Outperform BTC

Outperforming BTC mainly relies on timing and coin selection.

Coin Selection Strategy

Choosing small coins with growth potential may outperform BTC. Selection criteria include:

1. Growth metrics: Focus on TVL, the number of holding addresses, trading volume, and other indicators.
2. Profitability: Analyze protocol revenue, profit, and on-chain transactions
3. Market Attention: Consider the project's influence on public opinion.

Timing Strategy

1. Buy when the market is down, sell when the hype is high.
2. Pay attention to long-term trends, such as buying near the 200-week moving average and selling about 12-18 months after the halving.
3. Regular selling strategies often work well.

Determine Market Top

1. Quantitative analysis: Observe signs of slowing growth.
2. Reflexivity Theory: The market expectations may reach a peak when they cannot be sustained.
3. Qualitative analysis: Focus on changes in market driving factors

Market Driving Force - Crust Theory

The core driving force behind market changes is emotion, similar to the structure of the Earth:

• Core (Center): Market Sentiment
• Mantle: Project fundamentals, price performance, and short-term events
• Surface: Overall market performance

It is crucial to understand the sources and development process of market sentiment changes.

Assessing Market Sentiment

1. Pay attention to simple indicators such as the Fear and Greed Index.
2. Observe the inflow of ETF funds
3. Analyze price movements outside of trading hours
4. Observe open interest, perpetual contract premium, and funding rate

Continuously Discover New Alpha

1. Actively embrace and understand new things
2. Broaden your horizons and pay attention to assets outside the cryptocurrency space.
3. Maintain curiosity about the market and delve into the reasons behind price fluctuations.

Trader Self-Growth

Recommended reading:

• Tao Te Ching
• The Art of War
• Poor Charlie's Almanack
• "Reminiscences of a Stock Operator"
• "Financial Alchemy"

Continuously learn and enhance your understanding, applying what you have learned to trading practice.

Ultimately, finding a trading strategy that suits you and continuously improving it is key. In the growth process of a trader, the sense of personal progress often holds more significance than monetary rewards.