Investment Strategy Development and Market Insights

This article discusses how to formulate personal investment strategies, select assets, seize market opportunities, and continuously discover new investment opportunities.

Formulating Investment Strategies

When formulating investment strategies, it is necessary to consider both personal and market perspectives:

personal perspective

1. Evaluate the total amount of investable assets, ensuring it is not constrained by debt and time.
2. Clearly define investment objectives and return expectations
3. Understand your own risk preference and tolerance
4. Consider the investment time horizon
5. Plan personal liquidity needs

market perspective

1. Analyze the current market cycle stage
2. Reasonably control your position size to avoid excessive diversification.

How to Outperform Bitcoin

To outperform Bitcoin, it mainly relies on two strategies: timing and coin selection.

Selection Currency Strategy

Choose assets with the following characteristics:

1. Growth: Focus on indicators such as TVL, the number of holding addresses, and trading volume.
2. Profitability: Analyze protocol revenue and on-chain transaction data
3. Market Attention: Assessing the Public Sentiment of the Project

The method to cultivate the ability to select coins is to observe the performance of small coins relative to Bitcoin over a long period, identifying assets that perform well in different market environments.

Timing Strategy

1. Buy when the market is low and sell when the hype is high.
2. Seize trading opportunities driven by short-term events
3. Adopt a long-term allocation and regular selling strategy

Determining the Market Top

1. Observe signs of slowing growth
2. Pay attention to the theory of market reflexivity
3. Analyze whether the factors that triggered the bull market are still ongoing.

Market Power Source

Propose the "Crust Theory" to explain market changes:

1. The Core: Market sentiment is the key driving force.
2. Mantle: Project Fundamentals and Short-term Events
3. Surface: Price Performance and Market Prosperity Level

Sentiment Judgment Indicators

1. Fear and Greed Index
2. ETF Capital Flow
3. Price fluctuations outside of trading hours
4. Open Interest, Perpetual Contract Premium, and Funding Rate

Discover New Investment Opportunities

1. Actively embrace and understand new things
2. Broaden horizons and think across disciplines
3. Maintain curiosity and track the driving forces behind prices.

Trader Self-Growth

Recommended Reading:

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

Continuous learning and self-improvement are the keys to successful trading. Finding a trading strategy that suits oneself and continuously refining it, enjoying the pleasure brought by the growth process, drives traders forward more than mere monetary rewards.