Original Title: "EP29: A Trader's Growth Insights"
Original Source: Mint Ventures
Host: Alex, Research Partner at Mint Ventures
Guest: Colin, Freelance Trader and On-chain Data Researcher
Hello everyone, welcome to WEB3 Mint To Be initiated by Mint Ventures. Here, we continuously question and deeply think, clarifying facts, exploring realities, and seeking consensus in the WEB3 world. We aim to clarify the logic behind hot topics, provide insights that penetrate the events themselves, and introduce diverse perspectives.
Disclaimer: The content discussed in this podcast does not represent the views of the institutions of the guests, and the projects mentioned do not constitute any investment advice.
Path to Professional Formation and Current Investment Types
Alex: In this episode, we have invited Colin, who has been on our show before. Last time, he shared his insights and methodologies on on-chain data analysis, which received a great response. Today, we invite him again to discuss a broader topic—trading. The reason I wanted to invite Colin back is that I have been following his account, and his trading range is quite extensive, covering both US stocks and crypto.
Recently, he has had several impressive trades, such as going short on BTC around 90,000 to 100,000 before a significant drop in Bitcoin, and he reduced his position early. He also sold US stocks in Q4 of last year and made purchases during the recent panic lows. Colin has been sharing his views on trading through social media, and I find them quite insightful. So today, we invite him to share with everyone again. For those who are listening to our show for the first time, let’s have Colin introduce himself.
Colin: Hello everyone, my name is Colin. I run a Twitter account called Mr. Beig. I’m very happy to be invited back to the show to share my views. I am currently a full-time trader. My two areas of expertise are, first, on-chain data analysis, which helps me make judgments about the long-term cycles of BTC. The second area I am good at is technical analysis, which is quite complex, and I have been optimizing my system. I’m glad to be here again to share my thoughts with everyone.
Alex: Welcome, Colin. You just mentioned on-chain data analysis; everyone can check out the previous podcast we recorded with Colin, where he shared some excellent insights. In that episode, he mentioned his views on this cycle, which have proven to be accurate so far. Now, let’s get into today’s main topic. You mentioned that you are currently a full-time trader; did you start in finance, or did you gradually transition into this role?
Colin: This question is quite interesting. I should emphasize that I am just an old retail investor who has benefited from a significant portion of the era's dividends. If it weren't for the pandemic and the subsequent massive monetary easing in 2020, the outcome today would likely be completely different. So, I am just a case of survivor bias.
Did I start in finance? No. But I studied in a business school during college. At that time, I was exposed to some very basic financial knowledge from textbooks. However, college doesn’t teach you how to trade stocks or cryptocurrencies. Initially, I didn’t have much money; my savings were probably less than 10,000 USD. Due to some family issues, my relationship with my family was quite poor. At that time, I was still a student with only one goal: to achieve financial independence quickly and leave that environment. I took some basic finance courses in college, so at least I knew what kinds of markets existed and the general logic behind them. I learned something very important at that time: I realized that doubling your performance in the financial market is a very difficult task. For example, Warren Buffett, the stock god, has an average annual return of only about 20% over approximately 60 years. To double my money in a year, which means 100%, is extremely challenging. I recognized this situation back then. So, with a few thousand USD in savings, if I didn’t work, I would run out of money in a few months.
My thought was: if I could double this few thousand USD, I would only earn a few thousand USD. In this case, my goal was very clear: to get a job and find various kinds of work I could do. My grades were decent, so my main source of income at that time was tutoring, which is essentially in the tutoring industry. I taught in tutoring centers or worked as a private tutor for individual students. At one point, I had 11 tutoring sessions a week, all teaching math. During that time, I also worked at a convenience store and took on some small part-time jobs, like handing out flyers on the street or doing administrative work at tutoring centers. But later, I tried to focus more on tutoring because the hourly rate for tutoring was significantly higher.
Saving money also involves what is called increasing income and cutting expenses. During that time, my life was quite boring. I reduced all entertainment expenses to almost zero, spending money only on necessary items like telecom fees and food. I used to have a heavy smoking habit, and aside from food and essential living expenses, most of my remaining money went to buying cigarettes, while everything else was saved as principal. I would cut my sleeping time in half or even more to study. At that time, I didn’t know anything, so I needed to spend a lot of time learning anything I could. Eventually, I saved up a relatively large principal, and I thought that if I used this principal to trade in the market, the money I earned might help me achieve my goals more easily. This was what I considered the most critical transitional point at that time.
As for investment types, looking towards 2025, it is definitely Bitcoin, followed by Ethereum. Regarding US stocks, as Alex mentioned, I don’t really consider it trading; it’s more like index investing. Index investing is quite simple; it’s a passive investment strategy. I aim for the market's returns, which means I’m capturing Beta, and I don’t particularly want to extract too much Alpha from the US stock market. The biggest difference between the US stock market and crypto is that the former is too efficient and has a very large scale. For this reason, it is very difficult to extract Alpha from the US stock market. Therefore, I focus more on capturing Alpha in crypto. The US stock part is essentially index investing. In Q4 of last year to Q1 of this year, there was a special operation in liquidating my US stock positions; such opportunities occur only once every few years and have a low success rate. This time, I was lucky to avoid it. For index investing, the best strategy is to buy and hold.
Returning to the crypto part, in 2025, I actually haven’t been looking at altcoins much. In 2024, when the market was better, I spent a lot of time looking at altcoins. At that time, I would look at projects, trends, and sectors. I remember at the beginning of the year, the Restaking sector was quite hot, and there was a project called EtherFi that launched on Binance around February or March 2024. The effect of launching new coins was very good; they would rise immediately after listing. I would spend some time researching these projects, and if I found a new coin, I would buy it as soon as it opened. I couldn’t do angel round investments, so I would buy as soon as it opened in the secondary market. At that time, there was a lot of money in the market, and everyone was eager to buy these things. But the outcome later was not good; altcoins all went bearish. So that was more like a wave. I think in the short to medium term, I probably won’t look at altcoins again; I might wait until Bitcoin confirms a bottom again, and it has to be a cyclical bottom, not a temporary one, before I pay attention to altcoins. If Bitcoin has a slight rebound, altcoins will naturally follow, but I don’t want to chase those short-term gains; I want to pursue something with higher certainty. So for 2025, in crypto, I mainly still focus on Bitcoin. Ethereum also has some special trading strategies, but the triggering frequency is very low, so I’m still waiting.
Elements of a Mature Trader's Trading Framework
Alex: Understood. You’ve explained it very thoroughly. Colin just mentioned that he started learning about investment and business knowledge in school from 2020 and gradually transitioned to a full-time trader over at least four to five years. During these four to five years, in the stage of preparing capital, his labor density was very high. In your opinion, what should a mature trader's trading framework include? For example, investment philosophy, professional knowledge, psychological mindset, etc., what key elements should it contain?
Colin: Okay, I can’t say how correct my answer is, but from my personal experience, the most important framework so far, I would divide it into three parts, which might be different from what most people think.
The first framework, whether it’s people around me or those who ask me on Twitter or Telegram, the first thing I tell them is that once you enter this market, you must do one thing well: goal management. You need to be very clear about why you are coming to this market. I think everyone comes to the market with a clear purpose: to make money, but that’s not enough. The next question is, how much do you want to earn? I always ask others this question. Many people say, of course, the more, the better. However, if this idea is limited to just that, it can lead to some small issues in your operations. For example, let’s say your goal today is to earn as much as possible, and I tell you that you need to turn 10 USD into 10 million USD in a week. It sounds great, but obviously, to achieve this goal, you would need to multiply your money by 1 million times in a week, which means you shouldn’t be in this financial market. I wouldn’t say this goal is wrong; I respect every goal, but this goal cannot be achieved in the financial market, or the probability is just too low. Although it sounds a bit funny, if you really want to achieve this goal, the only way is to buy a lottery ticket; you shouldn’t be buying Bitcoin or Ethereum, or even on-chain, you wouldn’t be able to multiply a shitcoin by 1 million times in a week. This is goal management; if you don’t know how much profit you are targeting and which market to achieve that goal in, then in your operations, you might think, if there’s an opportunity in Bitcoin, you’ll play around with it; if there’s an opportunity on-chain, you’ll play around with that; or if you see some arbitrage or launchpad, you want to try everything. But you don’t even know where your goal is, and instead, you will miss out on many things you should really focus on. Everyone wants to make money quickly; usually, what I hear around me is that they want to quickly multiply their principal with a small amount of capital.
In fact, there is a problem that arises: the higher the expected return you have today, the lower the win rate of your trading strategy is likely to be. In this process, you will continuously face failures, and many people feel that their mindset is negatively affected. Why is this happening? Am I really that bad? Why can’t I win no matter what I do? But this is a very normal situation because if you are aiming for very high profits, you must accept the reality of a low win rate. This is why many people do not plan their initial goals properly, leading to many frustrations during execution. Therefore, I believe the first framework must be what is called goal management. There is actually a fairly clear goal, which is that in almost all trading in the world, we generally have a basic goal: to beat the market. For example, if you are a US stock trader, your goal might be to outperform the S&P 500, which is the market, or what we often refer to as Beta. If you are in the crypto space, you might need to outperform Bitcoin's performance. Suppose Bitcoin rises a certain amount in 2024; if your operations do not outperform simply holding Bitcoin, we would say you might as well just hold Beta to achieve a decent return. This is a broad and common goal.
The second framework, in my opinion, is mindset, and I won’t touch on the technical aspects; I think the technical side comes last. Many people are easily influenced by their mindset during operations. For example, there is a famous German stock god named Kostolany, who is on par with Buffett, just from a different era. He once said something that I think is very insightful. He said that the process of speculating in the market is not 2+2=4, but rather 2+2=5-1. 5-1 is actually the same as 4, but he emphasizes 5-1 instead of 4. What he means is that even if you are very skilled in the market and you are right every time you look, the market will not allow you to operate and execute smoothly all the time. For instance, if you want to go long on Bitcoin, it might slowly wash you out before it surges, and by then, your position might have already been liquidated.
Even if you are correct in your analysis, the market always finds a way to make you uncomfortable while holding your position, which is the concept of 5-1. So it goes to 5 first and then subtracts 1, resulting in 2+2=4. This has a significant impact on mindset. According to a psychological concept, human nature inherently dislikes uncertainty. In this market, everything about trading is uncertain because if trading in this market were certain, those who find that certainty would become the richest, possibly surpassing Elon Musk. Therefore, everything is uncertain. Since everything is uncertain, it means that trading itself is very contrary to human nature. To overcome this process, you essentially have to overcome your own inner nature. For those interested in this aspect, you can refer to the field of behavioral finance, which is taught in business schools at any university. The content is quite simple, mainly introducing the concept of why people behave irrationally in financial markets. I personally believe that if you cannot overcome the emotional impacts, your decision-making is likely to deviate. Even if your trading system is very profitable, it can still be disrupted or destroyed by your emotions.
The third trading framework, which I think is quite important, is your own trading system. I actually place this third because it’s about how you make money. Some people are very good at project research, some excel in technical analysis, and others are skilled at high-frequency arbitrage. I personally believe that regardless of whether you are a full-time trader or not, you should have your own trading logic or trading system. Here, I can share an interesting example I heard before. A reader messaged me, saying that he thinks investing is a very professional matter, and professional matters should be left to professionals. So his approach is quite interesting; he refers to the big influencers and bloggers on every platform with many followers, reviews all their decisions, and then sees whether the final direction is bearish or bullish, and he makes his decision based on that. He asked me if this was correct, and my answer is very simple: I absolutely do not agree.
First, I cannot know how capable every influencer on the table is, including myself and anyone with millions of followers. Second, even if they are very capable, if you do not understand their trading logic and simply follow their operations, when you make money, you won’t know if it’s due to luck or if they are genuinely skilled. If you lose money, you also won’t know if it’s because they performed poorly or if it was just bad luck. This creates a problem: you cannot review your own operations; you won’t know if you made money today whether you can replicate it next time. You also won’t know what can be avoided next time when you lose money. I think this is a serious issue. Investing is indeed a professional matter, but if you want to achieve long-term profitability in this market, you must become that professional person yourself, rather than following a bunch of professionals. Because if you follow too many, the noise will be overwhelming, and your mind will definitely explode.
These are the three frameworks that I consider important: trading system, mindset, and goal management.
Alex: Understood. Let’s discuss goal management a bit more. I understand that goal management includes two aspects: first, I need to be clear about the financial return I hope to achieve within a certain range, and after clarifying this, I can look for matching investment markets. For example, as you just mentioned, even a strong investment master like Buffett only achieves an annualized return of about 20%. If I hope for an annualized return of 100%, then I shouldn’t go to the US stock market, where even Buffett can only achieve an annualized return of 20%, but should look for emerging investment fields like Bitcoin, etc. If my mindset is that I want to minimize drawdowns and prefer lower volatility, but I’m okay with an annualized return of 10%, then looking at the US stock market might be achievable, and I would invest there. Is that a correct understanding?**
Colin: Yes, you need to first clearly understand the range of what you can achieve. For US stocks, simply investing in the beta of US stocks over the past few decades has yielded an average return of about 10% per year. Buffett’s is 20%; he has averaged beating the US stock market over 60 years, which is why he is called the stock god. If I’m not that capable, simply buying the beta of US stocks has yielded an average annualized return of about 10% over the past few decades. However, if your goal is 100%, it’s unlikely that you can achieve that by buying US stock beta, so you need to look for other markets. There is also a very important concept here: you need to be rational in your planning; you cannot assume yourself to be a trading genius. An annualized return of 200,000% is basically impossible.
I believe there are certainly geniuses, but the odds of betting on yourself being a genius are too low, similar to the concept of buying a lottery ticket. I personally prefer to make more rational judgments. For example, regarding Bitcoin, let’s look at the annualized returns from 2021 to 2024. If we look at the price from the peak of 69,000 to the current price, the return is actually quite poor because you are looking at a range from 69,000 to about 80,000 now, which doesn’t look good in terms of annualized returns. So, we can extend the time frame; you can compare it with Bitcoin. Regardless, you must rationally set a goal. Once you know what the goal is, you can then formulate your strategy and choose your market. This way, you will have direction, rather than trying to earn from everything. Usually, if you try to earn from everything, you end up earning nothing; this is some of my own biases.
Investment Framework Sharing
Alex: Okay, combining what we just discussed about goal setting, mindset management, etc., can you share your overall trading investment framework and what it currently looks like?**
Colin: Sure, my part is actually quite simple. My total assets are divided into two parts: one is investment, and the other is trading. The investment part is the US stocks mentioned earlier, which has a very low frequency; operations like topping out happen only once every few years, and I don’t know when the next one will be. For trading, I mainly allocate funds to the crypto market, focusing on Bitcoin and some other coins, rather than US stocks. In the crypto space, I personally divide my funds into two parts: one for spot trading and the other for contracts. There is also a small portion of funds for some more complex operations, but that’s a bit complicated, so I won’t mention it for now.
The spot trading part has a larger position, and its trading decision trigger frequency is not high; it mainly involves bottom fishing and topping out. The decision-making process here is quite simple. If you have listened to our previous episode, it’s mainly using on-chain data as the primary basis, with macro market conditions as a supplement. If there’s a signal, I will assess whether to start bottom fishing or topping out in batches, which is quite straightforward. It sounds simple, but in practice, there is quite a bit of analysis and data involved in the judgment. The second part is contracts; I allocate less capital to contracts because contracts can increase the utilization rate of funds through leverage. There are mainly two functions for contracts: the first is to operate on small-level swing opportunities, where I use pure technical analysis to trade. Just last week, I shared a live operation on Twitter, where I was scoring K, and this part is purely technical analysis.
The second function, as I mentioned earlier, is that technical analysis helps me refine the final entry points. This part is not like swing trading; for example, at the beginning of 2024, when the altcoin market was doing quite well, I mentioned that I would do some research. At that time, I looked at a project called PYTH, which is an oracle project, and I thought it was quite good, so I used the line chart to help me find the entry point I wanted. Sometimes, I find a project that I researched and found to be excellent, but it has already skyrocketed. If I think it will rise but don’t want to chase the high directly because it might pull back immediately, I will use the technical analysis framework to plan for entry points with a good risk-reward ratio. If there isn’t one, then I’ll just miss it. I won’t let my funds bear too much risk because this type of short to medium-term operation, if you force it into a long-term hold, can significantly harm the efficiency of fund utilization.
As for how to improve to the current stage, this question is quite interesting. I am still improving; as long as I see something that I think can be useful, logical, and can help optimize my trading system, I will use it. The most obvious example currently is Bitcoin. Each cycle of Bitcoin behaves quite uniquely, but this cycle is a bit different. If I were to simply look for commonalities based on the double tops of 2021, the peak of 2017, or even the top of 2013, and apply them to 2025, it would be very easy to run into problems. In this cycle, Bitcoin has accumulated a significant amount of chips at the bottom, which has not happened before. At such times, I need to conduct a thorough investigation and research on this special phenomenon, combined with my own analysis; otherwise, I would be confused, thinking that it has never happened before, and I would panic in this cycle.
So I think this is a process of optimizing the system. In the process of studying these new phenomena, I learn new things or look up other people's opinions or views, which is a process of improvement. At the very beginning, of course, I knew nothing; I was like a blank sheet of paper. So at the start, I tried to learn as much as possible and did not reject learning or any particular school of thought. When I was just starting out, I noticed a situation where different schools of thought would belittle each other: School A would say School B is useless, and School B would say School C is useless. Try not to reference these opinions and avoid biases. My suggestion is to listen to everything first, then combine it with your own thoughts to verify whether these things are effective. Don’t be rigid in your thinking; don’t simply use historical induction to judge the merits of a method. You should use deductive reasoning to confirm whether something is logical, and then gradually filter out concepts that are not applicable to this market, leaving behind the more refined parts.
Common Traits of Excellent Traders
Alex: Understood. Based on your trading experience over the past four to five years, and I believe you have also observed the thoughts and practices of many other traders, do you think good traders are born, or can an ordinary person become a decent trader through later development? In your observations, what common traits or abilities do excellent traders possess? Which abilities require later cultivation?
Colin: I wouldn’t dare to directly define the quality of certain traders because I don’t think I have that qualification; I am still learning myself. As for my personal bias, I believe no one is born to be a trader. My view is that in this market, not to mention controlling it, just being able to adapt to this market means you have already surpassed most people. This market is truly contrary to human nature; basically, every easily occurring event, including volatility and some strange market manipulations, are things you wouldn’t typically see in real life or that the average person wouldn’t notice. If you can adapt to these phenomena, you have already outperformed many others.
So I don’t really think anyone is born a good trader because the market itself is quite ruthless, and our society’s usual education is generally harmonious, which creates a bit of a conflict. It’s not that the market is a very evil place, but the various events within it can make it difficult for newcomers to adapt. As for whether it’s innate or acquired, I personally believe that most abilities can be trained later, and even if you have some innate advantages, you still need a period of later practice. For example, I mentioned mindset in the second part of my trading framework. I know some very special friends who are particularly unique because they are very insensitive to emotions; they don’t really express joy, anger, sorrow, or happiness. I’m not sure if this is innate, but if it is, I think they would have a significant advantage in trading because if you want to achieve stable profits in this market, if you are easily swayed by emotions, I think it would not be suitable for you to trade directly in the market. This can be trained, but if you enter the market without proper training, I think it would be quite dangerous.
Regarding innate qualities, I personally believe that if you want to achieve stable profits in the market, you need to possess several important personality traits: the first is humility, the second is rationality, and the third is discipline. The aspect of humility may differ from what most people think; we are not talking about being humble in dealing with people, but rather being humble towards the market. You must have a reverence for this market. If someone tells me they feel they have mastered this market, I can guarantee they absolutely do not understand what they are doing. Because no one can control the market; the market is always right, and it can always produce unexpected movements or events, which is why there is the concept of black swans. We must remain humble towards the market. Under this premise, every time you make a profit, you should think about whether you made money due to luck, whether you were just in the right place at the right time, or whether you are genuinely skilled. When you lose money, you need to reflect; you cannot blame the market or the people around you, or say you had bad luck; this is actually not right. When you lose money, you should remain humble and think about whether there are ways to avoid making the same mistakes next time.
The second trait I think is rationality, which I believe is the most important. Everyone comes to the market to make money, so every time we make a decision, we should aim for this goal, trying to approach it from an objective and rational perspective, avoiding emotional trading. Because once you lose your rationality, it’s easy to become a type of person known as a gambler, and the market may turn into your casino, where you come to vent your emotions. I once heard an interesting example: an amateur trader who was a regular office worker opened a position before work and lost money, which led him to make some unusual trades throughout the day. For instance, he was supposed to take an Uber to work, but that day he rode a bike instead, thinking about the loss all day, and when he got home at night, he thought he had to open another position because he lost money in the morning. From the second position he opened, his purpose had already deviated; he shouldn’t have wanted to make up for the morning’s loss with the evening’s trade. Each of your trades is independent, and your only goal is to make money. If you let the emotions around you or other factors influence you, at that point, you have already treated the market like a casino; you just want to satisfy your unwillingness to lose and vent your gambling desires. This is very detrimental to achieving your goal of making money.
The third trait is discipline. Without discipline, if you do not stick to certain things, even if I give you a very powerful and profitable trading system, you might still mess it up due to your own actions and end up losing money. The three points I just mentioned can all be trained. The first is humility, which is about adjusting your mindset; the second is to maintain rationality; and the third is discipline. To simplify further, they can all be combined into the second point, which is rationality. Because as long as you are rational enough, you will understand that the market cannot be controlled, and you will remain humble. As long as you are rational enough, you will know that if you operate without discipline, you will inevitably face some losses later on.
Alex: Understood. One point you repeatedly mentioned is that with every operation, whether successful or not, we need to reflect and summarize, extracting the good aspects from the last operation with correct attribution and applying them to future operations. Do you write daily trading reviews or trading notes? I see some people have this habit, and I’m not sure if such a habit is a good approach. Or how do you think this habit can be more helpful for trading?
Colin: This is quite interesting. In the early days, I tried to write down the details of every trade. I think this is a rather unique way of learning, and I believe this method has some degree of usefulness. I don’t do this now, not that I completely stopped, but I record some more special parts. For example, if I see certain specific patterns or observe certain phenomena, I will note them down. Sometimes my memory isn’t very good, so I write them down and look at them the next day, and then again the day after. I review those things I recorded daily and verify them. These things may not be part of my trading decision-making process; they serve as an additional observation list.
I will observe whether these things will be validated by the market later on. If they are, I will research them further; if not, if this observation was successful this time, successful the next time, and failed the third time, I might say that this thing was just a matter of luck in the first two instances. So I will record some more special situations, but I won’t write them as trading records; it’s just noting down some special things. I did keep a trading diary in the early days, but later I got too lazy to continue. Currently, many things have already been internalized in my mind, and I don’t have too many complex operations. This practice of writing a trading diary might only happen when developing new strategies or researching new areas; I don’t do it much anymore. However, I don’t deny that this practice is useful because it does seem to help those who are unclear about their direction to record their current thoughts and operations. It can be used for post-analysis, and I think that function is still valid.
Three Memorable Trading Experiences
Alex: Alright. Since you officially entered the trading career, can you share three of your most memorable trading experiences and what you learned from them?
Colin: This question has been asked by many people. Since I entered the market, every time someone asks this question, the experience that comes to mind is the same one because the image is too vivid. The first one was when I was still working part-time, doing various odd jobs to save money. I mentioned earlier that I would compress my sleep time to learn some things. In this process, I would take a very small amount of capital to the market to validate some ideas, train my market sense, and test the waters to see if my methods were correct. At that time, I basically knew nothing; I only had a very basic understanding, truly just a pure novice mindset. I distinctly remember my capital was 2000 USDT, which I put into a contract account to trade Bitcoin contracts. As a result, in two weeks, I turned 2000 USDT into 6000 USDT, tripling my investment. I knew that even the stock god Buffett only achieved a 20% performance in a year, and I had achieved a 200% performance in just two weeks. At that time, I felt on top of the world, thinking to myself, how could making money be this easy? I heard people around me say that when you make money, you should remember to reward yourself, so I bought a black jacket online for about 20 USDT to treat myself.
However, just two days after I bought it, I lost the 6000 USDT, leaving me with only 1700 USDT, which was even less than my initial capital. I made just one trade, and my 6000 USDT turned into 1700 USDT, showing that I didn’t even know what risk control was at that time. I manually closed that position and stared at the screen for about five minutes, my mind racing with thoughts about what I was doing and why my money was gone; I felt completely overwhelmed. Ironically, the jacket I ordered hadn’t even arrived at my house yet, and my money was already gone, so I didn’t even get to reward myself. That jacket is still hanging in my closet. That trade taught me the most important lesson: before you make any trade, you must absolutely, absolutely not remove your stop-loss order.
If you have that thought, then don’t trade. At that time, I had set a stop-loss order, and as it approached the stop-loss level, I removed the stop-loss order and moved it back a bit. When it got close again, I removed it again and moved it back a bit more. I just didn’t want to admit defeat, and as a result, I kept losing more. That position could have only lost about two to three hundred USDT, but I stubbornly lost 4300 USDT, which was extremely painful; I remember that number very clearly. So since that time until today, I have never removed a stop-loss order again because the impression was too deep; I felt like a clown, not knowing what I was doing.
The second experience I want to share is a more positive one. There was a time when I was studying a new area of knowledge, which was technical analysis. During that time, I would also take some small funds to the market to validate whether my views were correct. One day, I looked at two assets: OP and DAR. I drew the predicted lines on Trading View to show my friend my views on these two assets and explained why I thought that way. At that time, the drawing assumed a drop to A, then a rise to B, and then a drop to C. Remarkably, within about a week, this was validated. That was the first time I felt a great sense of achievement from this learning because I was learning something new. The price followed the line I drew, and even the timing matched. The timing was just a random guess, but it perfectly followed my drawn line: first dropping to A, then rising to B, and then dropping to C, all three segments were exactly the same.
I was very happy and went to show off to my friend, saying, "Look, what I learned is really useful." At that time, I had already moved beyond beginner trading for a while, and my mindset was more stable. Besides being happy, I started to think about why I could predict this trend in advance. I began to review and look for more different assets, whether Bitcoin or altcoins, to see if there were replicable patterns in their historical charts. Here, I want to emphasize that prediction is actually not important. Our trading decisions should not base themselves on predictions. Prediction is prediction, and decision-making is decision-making. You can predict, but you cannot incorporate that prediction into your decision-making process. You can make a prediction after making a decision; if you are right, you can be happy, and if you are wrong, just let it go. You cannot let a prediction influence your decision-making process. This is a major taboo because the market cannot be predicted.
The third experience I want to talk about should be from 2024, which was the single trade where I lost the most money. I actually shared a bit about this on Twitter before, and today I will finish telling the story. In October 2023, I had already bought a considerable amount of Bitcoin. My judgment was that a bull market was about to start, even though the market sentiment was still quite low at that time. I had an idea to go long on the ETH to BTC exchange rate, and the method was to use spot trading. I exchanged a portion of my Bitcoin for ETH to run a grid strategy, generating some profits during this consolidation process, and then hold it long-term. It was somewhat like replacing my pure holding of BTC. Holding Bitcoin means you are eating BETA, but I wanted to gain some alpha through Ethereum. At that time, I set the grid to run, and when I opened the position, I held more ETH, about a 7 to 3 ratio. If both coins rose, and my judgment on the bull and bear market was correct, I could benefit from the appreciation of the spot.
If ETH rose more than BTC, I could also benefit from the BTC's coin-based gains. Looking back at this strategy now, of course, I know what the outcome was, but from October 2023 to June 2024, this strategy was profitable. I managed to capture the range of the consolidation quite accurately; it was oscillating within a fairly large range. At that time, there was also hype around the approval of Ethereum ETFs, and I might have been a bit overly optimistic, not paying enough attention to the so-called extreme risks. Later, on August 5, 2024, the entire crypto market and the US stock market crashed dramatically. Bitcoin plunged to 49,000, and Ethereum, even more so, I remember it dropped to 2,100. The most notable thing that day was that Ethereum's drop was far greater than Bitcoin's, so the exchange rate plummeted directly. The unrealized loss on my account was terrifying because my average price was not that low, even though the grid profits helped lower my average price. So at that time, it was quite miserable. When I opened the position at the end of 2023, the average exchange rate was about 0.052. I had made some fluctuations in the exchange rate and, combined with the grid profits, the final average was about 0.045. From August 5 onwards, it was a nightmare, all the way until Trump was elected, and this exchange rate fell to 0.03. The loss from just the exchange rate was already over 30%, which was extremely painful.
In simple terms, I had no intention of stopping my losses at that time because I was waiting for another wave of a big rise. Later, it did rise; Trump took office, and the exchange rate rebounded to about 0.04, at which point I exited all positions at a loss. From 0.045 to 0.04, I lost about 10%, but my position was quite heavy, so this was indeed painful. The lost portion was not only the Bitcoin spot but also the significant opportunity cost I incurred later. Because Bitcoin lost value, but Bitcoin would still rise, so I missed out on the subsequent opportunity costs, which hurt my performance last year.
Looking back at this trade, I believe I learned some new things: in this crypto world, you really cannot trust any asset other than Bitcoin. At that time, I viewed Bitcoin and Ethereum as assets of the same level, but now it seems that they are completely different. Moreover, as of today, it seems the exchange rate has already dropped below 0.018. My exit price was 0.04, and now it has halved to 0.018, which is quite scary. On a more optimistic note, I sold my Ethereum spot at the peak in December last year when the price was 4,000. This is something to find solace in amidst the suffering.
Three Pieces of Advice for My Past Self
Alex: Alright, these three cases are very interesting, with both successes and lessons to reflect on, allowing for different experiences and teachings to be distilled. If you could have a time machine and go back to the year you started learning to trade and entered the trading market, what three pieces of advice would you give your past self, ensuring that your past self would listen? But it cannot be specific investment advice about what to buy.
Colin: Okay. The first piece of advice I would definitely give myself is to be selective with learning resources.** At that time, I bought quite a few books, many of which were not valuable. I believe every book might have some value, but those books were indeed not well-accepted by the market, containing flaws and erroneous concepts. But I didn’t know that at the time; I didn’t ask anyone or check online. After spending time reading and verifying, I found that these things seemed not very useful, wasting a lot of my time.
I believe most theories have value, but the premise is that they must be correct and accepted by the market. Some things, like purely using historical induction, can easily lead to problems in this market. This is the first piece of advice I want to give my past self: don’t read strange books; ask some professionals to tell you which books are worth reading. From my current perspective, if someone asks, I usually say to read textbooks, at least to understand the entire operational logic of the financial market first. The so-called textbooks are the ones used in finance-related courses in university business schools; those books are truly more valuable and substantive.
The second piece of advice I would give myself is to always remember to set stop-losses and never remove stop-loss orders. The reason is the first trading experience I shared earlier; I can still see that jacket to this day, and every time I see it, I think of it. You must never remove the stop-loss orders you set for yourself; they should always be there. No matter what happens, because this can save your life. If you are unwilling to do this and hold onto your positions, what might have only been a 2% loss could turn into a 10% loss, which is a very serious consequence. Although Alex just mentioned that if my past self could listen, I think it’s really hard for someone to truly understand just by being told once. I knew I should set stop-losses and had set them, but I just couldn’t do it; I was too unwilling to accept the loss. So I think experiencing this once leaves a much deeper impression. There’s a saying I heard before that resonates well: people can be taught a hundred times and still won’t understand, but experiencing it once might make them understand. This is a case in my life.
The third piece of advice has a bit of a story. I want to say to remember the original intention of entering the market and not to let it affect the most important people around you. In this episode, I’ve mentioned many times that everyone enters the market to make money. So what is the purpose of making money? It is to improve the quality of our lives, to be able to eat better, wear better, and use better things. Since that’s the case, making money itself is not your ultimate goal; it is a means to optimize your quality of life. If in this process, you let the pursuit of money affect your family or your partner, or even impact your own physical and mental well-being, then you have already strayed from your original intention for entering this market. I personally fell into this pit during my trading learning process. At that time, I was overly focused and a bit extreme, wanting to achieve results in the market too quickly, which led me to become indifferent to someone important in my life and vent some emotions on them, resulting in the end of that relationship.
What I want to convey is that although losing money or encountering uncertainties and setbacks can be painful, no matter what, you should remember that you entered this market to improve your life. Making money is a means, and once your means interferes with your ultimate goal, I think that approach needs to be stopped. If I had the chance to go back to those days, I would tell myself not to do such foolish things. You came in to make money, but making money is to help yourself live a better life, so you can lend a helping hand when those around you are in difficulty, rather than being unable to help. I believe this advice is the most important.
How to View the Current US Stock Market and BTC Trends
Alex: Alright, for our last question today, let’s be more specific. Last time we discussed market views in the Chain Data Analysis program, you were still bearish. I remember Bitcoin's price was quite high at that time, over 90,000, and later we saw Bitcoin drop to a low of 74,000, leading many to believe that this bull market had ended and we had entered a bear market. Now we are still in a boundary zone between bull and bear, and we don’t know what stage the market is currently in. Regarding the current market, including BTC, and the recent volatility in the US stock market, what are your views on the current state of the US stock and BTC markets? What key trading actions have occurred recently?
Colin: Let’s start with the US stock market. I wouldn’t say it’s simple, but at least in my framework, it’s easier to judge. Trump is a president with a lot of emotions and actions. He has caused significant turmoil not only in the financial market but also in the global situation. The recent volatility in the US stock market has been quite exaggerated. This week has been relatively calm; although there was a drop yesterday, the market conditions in the previous two to three weeks were quite terrifying. You might not see such a situation even after spending years in the US stock market. Personally, I am not too pessimistic about the US stock market.
My view is as follows: tariffs have clearly had some impact on the economy. Currently, the most challenging issue for the Federal Reserve is stagflation; inflation remains quite stubborn, making it difficult for them to lower interest rates. This issue will gradually be transmitted to inflation as the economy cools down. Once inflation is alleviated, they can gradually resume the process of lowering interest rates. Therefore, I believe that although the market's volatility may be very large in the short term, as long as there are no extreme risks or black swan events, I remain optimistic about the long-term outlook for the US stock market. If you open the S&P chart, whether on a monthly or weekly basis, it shows a steady upward trend at a 45-degree angle. So I think that no matter how big the crisis, it should be able to withstand it. However, in the short term, whether for short-term or medium-term trading, the difficulty is quite high. I am not fully focused on trading US stocks, so I don’t want to say too much to avoid overstepping.
Bitcoin is a bit special. As Alex just mentioned about the transition between bull and bear markets, when I was escaping the peak, I retreated in batches, leaving the last 20% of my position. This 20% was withdrawn because it broke below an on-chain data point called the average cost of short-term holders. That day's number was 92,000, and once it broke below, it quickly fell. This line, as of two days ago, was around 92,400, still near that area.
I personally believe this line is key to whether Bitcoin can see another significant rise. Although it has risen from 74,000 and 75,000 to now around 87,000 and 88,000, which is quite a large increase, I believe that if Bitcoin is to reach a higher position today, the average cost of short-term holders will be a very important dividing line. The principle is simple: a large part of the market's fluctuations, whether up or down, comes from the trading of these short-term holders. Once the price rises to their average cost, it is possible for those who are trapped to choose to sell, potentially leading to a wave of selling pressure that needs to be worried about.
The second line is a piece of data I haven't shared before; it's called TMMP (True Market Mean Price), which is another indicator in the Coin Time Price system I mentioned earlier. I may not be able to explain this data in detail here, but I can briefly mention one of its characteristics. Its characteristic is that historically, the time Bitcoin's price has spent above this line versus below it is almost one-to-one, so this line serves as a relatively slow but effective dividing line between bull and bear markets. Currently, this line's price is around 67,000, if I remember correctly.
When I was analyzing and making decisions to escape the peak, I did not refer to this line because relying solely on it might be a bit too slow. But now, if the price continues to oscillate, this line may become a very important true dividing line between bull and bear markets. Since this bull market began, this line has not been broken; it has been rising since it was above 60,000, and it has not fallen to that low since. Another point worth noting is the current chip situation of Bitcoin. About two to three months ago, the chips trapped in the range of 87,000 to 110,000 were approximately 4.5 million. After several months of digestion, a large portion of these chips has now shifted to a new range. This range is now about 81,000 to 85,000, with about one to two million chips having been transferred.
From an optimistic perspective, Bitcoin being able to hold so many chips in this range without falling indicates that a lot of capital still has consensus on the 81,000 to 85,000 range, and they are willing to buy in this range. However, there is also another risk to note: the chips we just mentioned are from the trapped chips above around 93,000. Their losses and sell-offs also represent selling pressure. Their selling indicates that their mindset is no longer as firm as before. Therefore, if they accelerate their selling and the market's capital cannot absorb this selling pressure, the price may further decline.
Currently, the number of chips above 93,000 is about 2.9 million, according to my report data from the day before yesterday. I think this is a relatively neutral interpretation. But at least in the 81,000 to 85,000 range, there should be a noticeable stickiness in the short term. Once the price rises, it may be absorbed back; if the price falls, unless it falls very quickly and significantly, the price may still slowly rise back to the 81,000 to 85,000 range. So the central axis of the current price game for Bitcoin may be around 81,000 to 85,000.
Of course, the price may directly break below, but if it does not encounter greater negative news after breaking, we can expect the price to slowly rise again. Currently, the price is around 88,000, and this 88,000 position must bear the selling pressure from profit-taking in the 81,000 to 85,000 range. Because all of the 81,000 to 85,000 range comes from short-term holders, we cannot know how many of these chips will turn into diamond hands and become long-term holders. But these chips are currently all short-term holders, so once the price rises, these people will want to take profits. Profit-taking means selling, so they may push the price back down to the 81,000 to 85,000 range.
I personally believe that breaking below 81,000 and breaking above 93,000 are both scenarios where I lean slightly bearish. Because from a cyclical perspective—I'm not referring to a four-year cycle, but simply the transition between Bitcoin's bull and bear markets—if my judgment about the peak was correct, this is likely the highest peak of this cycle. However, it does not prevent it from forming a double top like in 2021; it is somewhat similar now, but there is not enough evidence and data to support my view. If my previous judgment about the peak is correct, I am still leaning slightly bearish, and I am currently in a cash position. I may wait until the price drops near the bull-bear dividing line TMMP, where there happens to be a chip accumulation area. Once it reaches that point, I may start considering whether to gradually buy the dip or wait for a lower position.
Alex: Understood. You just mentioned that the point where you would consider buying is around the 60,000 price range of the bull-bear dividing line. Additionally, the average price of short-term holders around 93,000 and 92,000 is also a significant resistance. So if the price moves up from 88,000 and successfully breaks through 93,000 and 92,000, I understand that you would also increase your position in line with the trend, right?
Colin: It’s possible, but this part may involve using contract funds; my spot position may still remain short. Because looking at the data, I personally judge that it’s not that easy to break through there. There are too many trapped chips above, and it coincides with our average cost of short-term holders, so I may really need to wait for a confirmation period after the breakout, for example, standing above for a week or three to five days without a significant downturn, and then I will decide whether to enter a long position through contracts based on technical analysis.
Alex: Alright, today’s discussion with Colin has been very rich. We not only talked about his growth as a trader but also delved into some of his core insights and practical experiences during the trading process, including his framework for understanding the market and his operational logic in different market environments. Whether it’s the emotional fluctuations in the US stock market or the changes in Bitcoin’s chip structure, I believe everyone can gain a lot of inspiration from this. Thank you very much, Colin, for joining us again today and bringing us so many deep thoughts and wonderful content. I hope we can have the opportunity to invite you back to the show in the future to continue discussing the market and strategies. Thank you.
Colin: You’re too kind, thank you.
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
