How to Avoid Common Mistakes in Crypto Assets Investment

As a Crypto Assets investor, I have made numerous mistakes during my years of investing. These mistakes have cost me dearly, but they have also provided me with valuable experiences. Today, I want to share the five major mistakes I have made in Crypto Assets investing and the lessons I learned from them. I hope that through my sharing, you can avoid similar issues and become a better Crypto Assets investor.

1. Ignoring Market Risk Signals

During the Luna crash event, I ignored many potential warning signals because of my "position bias". When the price of UST fell to 96 cents, I should have immediately cut at least 50% of my position to mitigate risk. However, due to my optimistic attitude towards Luna, I chose to ignore these signals and ultimately paid a heavy price.

This experience made me deeply realize that even seemingly stable projects carry risks. We must remain vigilant at all times, objectively analyze market signals, rather than being swayed by our own emotions.

2. Lack of a Clear Stop-loss Strategy

Taking Beam as an example, I did not set an effective stop-loss strategy for it. Although the price trend had long sent warning signals, I ignored these signs until the price dropped significantly.

Whether it's short-term or long-term trading, setting stop losses is crucial. I recommend combining various technical indicators, such as moving averages, Relative Strength Index ( RSI ), etc., and determining key support and resistance levels on higher time frames as references for stop losses. At the same time, tools like TradingView can be used to set price alerts to stay updated on market movements.

3. Failure to realize profits in a timely manner

This may be one of the most serious mistakes I have made. Take Lucky Coin as an example; at its peak, I held approximately $1.7 million in value, but due to failing to take profits in time, all those gains eventually evaporated.

When the price of a certain coin doubles or even triples, it is wise to withdraw the initial investment. When the price drops, the market reacts very quickly, and if profits are not locked in during the rise, it may lead to regret.

4. Position Management Errors

Sometimes I invest too much money in a certain coin, making it difficult to make rational decisions. On the contrary, there are times when I have great confidence in a certain coin, but I do not match it with enough capital, missing out on greater profits.

I suggest limiting the investment in a single coin to no more than 5% of the total investment portfolio, with a maximum of 10%. As the coin price rises, adjust the position proportion in a timely manner and control risks through staggered profits.

5. Holding too many altcoins

In 2021, my portfolio held up to 30 or more coins. When the market turned, managing such a large portfolio became a nightmare.

I recommend concentrating the investment portfolio on 5 to 10 high-confidence coins. By reducing the number of holdings, you can focus more on researching and managing each coin, thereby improving the overall efficiency and returns of the investment.

Summary

Looking back at these mistakes, I realize that becoming a successful investor requires following some core principles: setting stop losses, taking profits in a timely manner, managing positions reasonably, and concentrating investments in a few high-confidence projects. By continuously learning and improving, we can navigate future market cycles with more ease.

Remember, making mistakes is inevitable, but the key is to learn from them and reduce similar mistakes in the future. I hope my experience sharing can help you go further and more steadily on the path of Crypto Assets investment.