Bear Market Wisdom | Cryptocurrency researcher summarizes investment rules: Only 1% of traders can get rich from day trading, do not underestimate the power of HODL

Crypto researcher Aylo shared the story of a retail investor on Twitter, who always looks for trading signals on the platform. Although he made a big profit in the early bull market, he seemed to sell everything at the bottom as he couldn't bear the psychological pressure when the market crashed. Aylo pointed out that this is a common scenario for many retail investors, so he compiled nine investment principles on Twitter, hoping to assist investors.

Original link: https://twitter.com/alpha_pls/status/1498678757011382281?s=21

Friend's Background

• Has been in the crypto field for years with limited trading experience.
• Mainly follows trading signals from crypto traders on Twitter.
• Entered the market in a big way in 2020 after the Covid crash.

Like most retail investors, Aylo's friend initially profited greatly in the market's upswing, feeling invincible.

Top Traders

Aylo finds it interesting from a psychological perspective how Twitter traders are perceived as having the ability to predict market prices, hence accumulating a large following. Here, he lists some traders he considers top-notch:

• Scalping Trader: Cantering Clark
• Scalping Trader: Cheds
• Market Cycle Analyst: Cobie

These traders have years of experience honing their skills to navigate the market, but even so, each trade still carries a certain level of risk, and they don't need to be 100% accurate to make money.

Dreadful Traders

Aylo points out that in the past 24 hours on 3/1, some top traders' analyses on his feed were completely contradicted by Bitcoin's movements. The reality is that the current market volatility makes successful trading for profit extremely challenging.

While traders often share short-term strategies, many overlook the fact that these traders also hold long-term assets, making them long-term investors by definition. Truly successful traders are often the exception, not the rule.

Aylo mentions that there are traders on Twitter who consistently lose money yet have a large following, sharing dreadful trading ideas and advice. They provide a plethora of different trading signals, covering almost all possible market trends, deceiving careless followers into believing they have a mysterious trading strategy.

Friend's Outcome

For most retail investors, distinguishing successful traders from scammers is challenging.

Aylo's friend blindly followed trading signals on Twitter, lacked risk management measures, and heavily concentrated in his portfolio. Subsequently, the panic of a bear market and bearish arguments deeply embedded in his mind led him to abandon his originally planned long-term holding strategy.

Emotionally drained, he sold all his holdings, unwilling to bear any further downside risk, only to sell at the bottom as the market quickly rebounded.

Aylo believes this is a common experience for many in the crypto space.

Boring HODLing

Twitter often highlights the 1% who successfully time the market tops and bottoms, with everyone aspiring for instant success. In contrast, HODLing and long-term investment advice seem dull, with holders often mocked for enduring significant losses.

However, Aylo points out that most retail investors find it difficult to become part of that 1% of traders:

WAGMI is a meme filled with hope and positivity, but the reality is not everyone can succeed. Focus on increasing asset value rather than attempting to retire in six months.

For the other 99% of retail investors, he lists nine investment recommendations.

Nine Investment Recommendations

1. Extend Investment Time: Most should extend as much as possible, as the crypto industry is still in its early stages, presenting the largest wealth creation opportunity in modern times over the next 10 years.

2. DYOR: Conduct extensive research to build conviction, enabling you to withstand market fluctuations.

3. Buy Low, Sell High: This is the basic rule for profit and entry, which most people fail to follow.

4. Dollar-Cost Averaging: Don't invest all at once, zoom out and amplify.

5. Delete Percentage Gains/Losses: This can help users become better long-term investors, making better decisions.

6. Never Liquidate All at Once: A bear market may seem like doomsday, but the crypto market's direction can change rapidly.

7. Don't Compare Trades with Others: The only important person is yourself, focus on increasing asset value annually, don't compare with others.

8. Don't Trade When Emotional: Avoid selling in anger or buying in euphoria, stay away from trading during emotional volatility.

9. Diversify Investments Moderately: Most people may self-destruct by going all-in on one or two tokens, but investing in too many projects may dilute profits.

Aylo concludes:

I'm not an investment guru, easily influenced by emotions and cognitive biases. I also ape into some meme coins and trading signals, but they only make up a small portion of my assets. Identifying my weaknesses is key to my increasing net worth year by year, that's my goal. Stick to a long-term strategy, and the chances of success will greatly increase.