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Most common ways to lose it all:

Becoming permanently attached to a single coin, narrative, or position

Never taking profits on anything (or always rolling those profits into other positions without ever cashing out)

Moving targets higher/lower as price moves in your favour

Buying the dip/shorting the rip with leverage and no hard stops or invalidation

Adding to losing trades without a predetermined maximum risk allocation

Overtrading your core spot/low leverage positions or trading leverage out of boredom

Not taking the hint that conditions have changed when your setups stop printing and instead continuing to trade as you were, without adapting

Chasing your all-time high PnL via revenge trading + setting arbitrary portfolio goals

Developing a God complex (from a short term win streak) that you’ll never be wrong

Adjusting your lifestyle and spending as soon as you make a few good trades + assuming you’ll always be able to make X amount of money trading (conditions change, so your extrapolation is nonsensical)

Knocking up an egirl you flew out after flexing uPnL on Hyperliquid and having to pay 50% of your liquid net worth in child support payments

- CryptoCred

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Crypto is cyclical. So far, it has been pumping and dumping in 4-year cycles.

So, when the dump begins, it dumps slowly in the beginning (topping out), then fast (down trend), then slow drag sideways/down (volatility collapse).

The volatility collapse takes more than a year in most cases and so, there are bounces between wyckoffian AR & ST levels.

Consider a scenario in future where crypto goes into a multi-year bear market longer than the previously experienced ones. Like the volatility collapse lasts for 3-5 years instead of 1-1.5.

So, in that case just blindly buying according to TA patterns would be useless. You will have to track volumes after zooming in also. Find some other ways to track smart-money like of course some names get mentioned on podcasts but also learn to track onchain. Keep track of volume bursts and put them into context.

Keep in mind also that more projects will die in a 3-5 year bear market compared to 1-1.5 year one. And so, you will need only exceptional ones like excellent pmf, ultra-large war chest, etc. Also, how would you anticipate the period of the bear market and so, for that, you will have to think about risk-reward in a different manner.

One trade idea- follow smallcap projects closely- their twitters and telegrams. These might not have a lot of eyes on them. mainly because of their not being able to absorb a decent amount of capital. But for us retail, this could mean a quick 2-4x on 4 or 5 figures. So, their announcements, launches, etc. could be good plays for quick profits because there could be a decent lag between them putting it on x or tg and people going on and buying on the orderbooks. Of course, the actual launch becomes the 'sell the event' point.

Look, I'm thinking about the future, where I will have a good amount of capital and I can allocate 10-20% for short term portfolio properly. And so, these things can then become quite useful.

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Thinking something. How when the overall stock market index falls and you expect to buy a stock and you were waiting for the market to fall and it falls. However, the stock that you wanted to buy has felt a lot lower than the index. Your entry level was 30% lower from cmp for the stock. The index has fallen 10% and the stock has reached at your entry level. However, you expect the index to fall more and stagnate for a while.

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In retrospect, betting on 2nd fork or 3rd fork (in the sense, similar projects with low mcap) is more risky than betting on pioneers.

Because forks come up when a narrative becomes successful and that likely is the period filled with euphoria and excitement.

So parking money in those lowcaps with the goal of I only need a 5x on this even if it takes me long time is ultra risky because people will forget about it later and it will die down a fast followed by a slow death. So, when you sell something and park money on such lowcaps, it's a mistake.

You are better off waiting months for better opportunities.

When bitcoin, for example, is in price discovery after breaking out from previous all time high, dips aren't as psychologically difficult to handle when the price is above the previous ath. And this makes us a bit complacent in the sense that we become less serious about looking for weaknesses and top areas as we are less bothered by dips and dips can then convert to full fledged bear markets.

Put it into grok for expanding the train of thought

Like u lose 30 kgs then gaining 5 kg feels like nothing as u feel like u will lose it easily but then slowly bcos of complacency that 5 gain turns to 10 gain then 15 then 20

Similarly in investing wen u make 500% then losing 15% of that 6x value feels like nothing but then u will slowly keep losing more if u become complacent

When u run regularly but someday don't feel like running

U eat bad for few days, gain few pounds, feel bad in mind & body and that starts a cascade where you feel lazy to wake up and go outside in the morning

But you still make an effort, get up and get outside to initiate something like a short or a slow run or even a walk

The u meet your kind of people. The early morning types. The people who run. You become part of the running/jogging tribe.

Meeting them in the morning or during your run exchanging greetings will make you feel like running again and drastically reduce the effecr of the laziness you felt earlier.

You become part of the hive mind. Monkey see, monkey do. In a way, you can't help it.

This early morning running thing is in a good context. A good type of hive mind because the effects on your health are good.

But point to note is that it's nearly impossible to not behave like your tribe unless you are very strictly conscious about it all the time ie you have second order thinking all the time, which is difficult.

Now come to trading. We get our info from social media, other people, podcasts, articles written by others, books written by others. Your source of information itself is the hive mind. However, this is a dillema. You need to get your information from hive mind but not behave like the people in it. You need second order thinking all the time even though it's ultra difficult.
You can do this by being an observer and not someone who participates in the chit/chat or useless discussions.

You need to be aware of your behavior.

Another analogy about hive mind. Kind of similar but slightly different.

The conclusion of this part is that our risk taking stamina goes up being part of the hive mind bcos we behave like the crowd and that makes us forget the individual risk management practices that we generally use. We forget those when we behave like everyone else.

I usually run solo. I run on the opposite direction of vehicles so that I can see the vehicle coming from front and manage accordingly. Roads are empty in the morning mostly and so the vehicles that are there, drive fast. So I don't trust them when they come from behind.
So, I run on the side of the road, mostly on the right side of the white non-dotted line, after the driving lanes end. And that is a safe practice.

However, when I run with someone else, I tend to run even in the middle of the road, not necessarily on the side. My mind thinks that I am safer behaving risky bcos I am with someone else. I forget the risk management strategies that I use individually. Even though the risk of getting hit by a vehicle doesn't change. When the risk level does not change my aggressiveness also shouldn't.

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Quite a good read. I think I should read this pdf once every quarter.

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