Last night, I had drinks with a few old friends from the circle and talked about recent events. One brother took a sip and said he felt anxious watching others build tall buildings while he was always a beat behind. I chuckled but didn't respond, instead recalling the people I've seen over the past few years who have managed to survive and even grow their fortunes. They all share a common trait: their methods are particularly 'practical', even seeming a bit 'clumsy'.
What wealth codes can turn stone into gold? I increasingly feel that the seemingly simplest actions are the key to closing the gap. Let me share a few of my own feelings, purely personal opinions, you can listen.
1. Learn to give up 'tail-end markets.'
The moment the market peaks is the most tempting and the most dangerous. The downward adjustment after a rapid rise can sometimes be a handover, so don’t scare yourself. But be especially cautious of one situation: after a sharp drop, if the rebound is soft and lacks strength, that kind of rebound is like a feint, often creating the illusion that 'it can't drop any further.' If you get itchy and jump in at this point, you are mostly just supporting retreating capital. Not making the last cent means you don't want to take the last bite of the thorny meat.
2. Prices can be deceptive, but 'breathing' cannot.
The candlestick chart is its heartbeat, while trading volume is its breath. A sudden surge in volume at a high level does not necessarily mean an immediate end; it could also be the last frenzy before a peak. However, if at the peak area, the price is still moving slightly while the volume has already started to decline, it's like a person having a heartbeat but no longer breathing—how long can that last? Volume is the real deal, much more honest than price patterns.
3. The bottom is 'tempered' out, not 'guessed' out.
After a brutal drop, a sudden big bullish candle can easily excite people, making them think, 'It's over!'. But my experience is that this is often the first bait. The real bottom area rarely goes up in a V-shape; it looks more like a piece of red-hot iron that needs to be tempered repeatedly. Funds will test and grind back and forth until most people no longer believe it, and only then does the bottom slowly emerge. Waiting for another confirmation is much safer than rushing in impulsively.
4. Understand the 'human drama' behind candlesticks.
Every candlestick chart depicts not the price, but the greed and fear of the people at that moment. When pushing up, it's the frantic buying out of fear of missing out; when crashing down, it's the panic of running late. Therefore, when looking at charts, don't just focus on their appearance; think, 'What was the mood of the people when this line was drawn?' Combined with the previously mentioned 'breathing' (trading volume), you can understand whether the current situation is just a gust of emotional wind or if there is significant capital quietly positioning itself.
5. Your greatest skill is 'resisting the urge to act.'
In this place, the most terrifying losses often come not from misreading the direction, but from feeling worse about seeing others make money while you lose. Once the rhythm is disrupted and the mindset collapses, operations become distorted. Being able to watch the show while in a flat position when the direction is unclear, and decisively pushing chips when signals are clear, is something everyone understands, but only a rare few can achieve. Sometimes, doing nothing is the best operation.
I digress, let’s get back. I firmly believe that in this industry, surviving long enough is the greatest miracle. All the methods that seem the 'dumbest' or slowest are precisely the guardrails that help you avoid deep pits. Wealth is never determined by a certain code or a sudden piece of news; it comes from your calm observation, independent judgment, and the ability to maintain distance from the crowd's emotions.
I am analyst Lao Chen, continuously sharing my market observations and thoughts. Points and strategies may become outdated, but the upgrade of cognition never does. The real 'code' has always been held in your own continuously evolving mind.
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