Understanding Market Behavior and Developing Effective Trading Strategies

According to PANews, during a cryptocurrency market downturn, people often spend a lot of time and energy analyzing, trying to accurately predict the market bottom, and acting with extreme caution. However, when the market rises, everyone becomes overly confident, continuously clicking the buy button without conducting any in-depth analysis. It seems as if we become reckless, frantically chasing green buying opportunities. The driving forces behind most of our behavior in the cryptocurrency market are fear and greed. When fear dominates, the market news is filled with warnings of further crashes and calls for surrender, as if everything is heading towards doomsday. However, when greed takes control, euphoria and optimism permeate the market, and everyone becomes a confident expert, predicting new highs. One of the main reasons for this phenomenon is loss aversion in human psychology. Our pain from losses far exceeds our pleasure from gains. Moreover, as social animals, we have a strong fear of missing out (FOMO). When everyone around us is getting rich quickly, it's hard to stay out of it. The herd mentality takes over, and we follow the crowd into the market, often at the peak. In fact, predicting the market's bottom and top is a foolish thing. When market sentiment reaches extremes, the best opportunities have usually already slipped away. Ironically, the best opportunities often lie in going against the flow: buying when others are drowned in fear, and selling when greed and euphoria are rampant. The job of a trader is not to predict the market's bottom and top, but to think from the perspective of accumulation and distribution. Develop a plan based on your own analysis, don't try to find the perfect entry or exit timing, but gradually accumulate during downturns and gradually profit during rebounds. Have a strategy and stick to it, regardless of market fluctuations. Professionalism means having a plan and strictly implementing it, even when emotions are high. Discipline is resisting the impulse to deviate from the plan when FOMO strikes or the market is shrouded in fear. Repetition means continuously applying your strategy, even if it feels boring. In the end, the ability to overcome repeated failures and disappointments is the key to success. Having a plan and strictly implementing it is crucial. If your plan is to accumulate during downturns, then no matter how you feel, you buy when prices fall and sentiment is low. If your plan is to profit when you reach your target, then even if it feels like the rise might go on forever, you sell in stages during the rise. Catching the exact bottom and top may satisfy the ego, but it's not a reliable way to build long-term wealth. A better approach is to focus on executing your plan over and over again, even if it means missing some of the best days. The slow and steady approach often wins in investing. Remember, in extreme situations, the herd is usually wrong. Remember your plan, and the effort you put into making it. Discipline is the key to long-term success, and every setback is an opportunity to learn and improve. Stay rational, and best of luck with your investments!