How to Avoid Common Mistakes in Crypto Assets Investment

In the Crypto Assets market, I have experienced some significant losses, but it is these experiences that have helped me grow into a better investor. Today, I want to share the five major mistakes I made in Crypto Assets investing and the valuable lessons I learned from them.

1. Ignoring Market Risk Signals

My huge loss on Luna stemmed from "holding bias." When you hold a large amount of a certain asset and see the price rise, it's easy to mistakenly believe this is a sign of fundamental improvement. This psychological error led me to overlook the risk signals that Luna and UST might decouple.

Lesson:

• Stay objective and do not let price fluctuations affect your judgment of the fundamentals.
• Timely identify and pay attention to market risk signals
• Do not underestimate the impact of low probability events.

2. Lack of a clear stop-loss strategy

Taking Beam as an example, I did not set an effective stop-loss strategy for it, resulting in significant losses. The price trend had already issued warning signals, but I chose to ignore them.

Suggestion:

• Set a clear stop-loss strategy for each transaction
• Combine multiple technical indicators to determine stop-loss levels.
• Long-term positions should also set stop-loss, which can be partial stop-loss.
• Use the price alert feature to get timely market information.

3. Failure to Take Profits in a Timely Manner

This may be one of the most serious mistakes I've ever made. I once held a position worth 1.7 million dollars on Lucky Coin, but ultimately failed to profit.

Reason:

• Adhered to the rule of not selling a coin within 24 hours after publicly discussing it.
• Small market cap coins have insufficient liquidity, making it difficult to quickly sell large positions.
• Too optimistic about the market, believing there is still more room for increase.

Lesson:

• Formulate and strictly implement profit strategies, such as withdrawing the initial investment when the price doubles.
• Take profits in batches to avoid missing opportunities due to liquidity issues.
• Stay rational and do not be misled by short-term price increases.

4. Position Management Mistakes

Sometimes too much money is invested in a certain coin, making it difficult to make rational decisions; sometimes there is great confidence in a certain coin, but not enough matching funds are invested.

Suggestion:

• Single coin investment should not exceed 5% of the total investment portfolio.
• Projects that are particularly favored can increase up to 10%, but caution is advised.
• With the rise in coin prices, timely adjustments to the position ratio are necessary.
• Control risks by obtaining profits in batches

5. Holding too many altcoins

In 2021, my portfolio held as many as 30-50 coins. This led to management difficulties and increased overall risk.

Improvement:

• Compress the investment portfolio to 5-10 high-confidence coins
• Conduct in-depth research on each held coin and establish a solid investment logic.
• Reduce repeated investments in multiple projects within a single industry.
• Focus on managing a small number of high-quality projects to improve investment efficiency.

Summary

Making mistakes in investing is inevitable; the key is to learn from those mistakes and avoid repeating them in future trades. Keep a record of your errors and improvement plans, and constantly remind yourself to adhere to these principles. Only by recognizing the problems can you truly solve them and become a better investor.