Relying on TG or X for trade entry may be effective at first, but in the long run, it can lead to negative returns.
Author: Game
Compiled by: Deep Tide TechFlow
Incorrect Position Sizing: Equal allocation of positions in trading without regard to risk differences, and over-investing in derivatives to compensate for missed gains. Always remember that risk-adjusted returns in the secondary market will decrease—be aggressive at the beginning of a rotation, but gradually reduce risk as the cycle matures.
Failure to Adjust Timely: Sticking to past strategies without adjusting to changes in liquidity. When funds shift to other areas, do not take risks in small caps on-chain.
Copying Others' Trades: Relying on Telegram or X for trade entry may be effective at first, but in the long run, it can lead to negative returns. A lack of conviction may result in premature exits or holding too long. Stick to trades based on your own analysis and reassess based on that, not just on price changes.
Chasing Gains and Cutting Losses: Rushing into high-risk investments after suffering losses and lowering the risk curve to compensate can lead to irrational decisions and a skewed mindset.
Exiting Too Early: Selling profitable investments too soon, thinking they won't continue to rise. New trends lack relative valuation (unlike, for example, when a large number of L1/L2s are launched), so they should be held longer to avoid rushing out after recent gains.
Ignoring Risk/Reward Analysis: Failing to conduct risk/reward analysis before entry. Set realistic targets (e.g., 2x, 10x, 20x) and adopt psychological stop-loss and take-profit strategies. If the risk/reward is not attractive enough or the entry timing is late, forgo the trade, as there will be other opportunities. I typically avoid participating in on-chain trades with expected returns below 2.5x.
Single Entry and Exit Strategy: Going all in or all out at once limits flexibility. Positions should be built gradually, and profits should be taken in batches. Quick full entries are suitable for new news or new tokens, but in other cases, one should enter slowly and exit gradually. Generally, after achieving 2x returns, I will reclaim my initial capital unless it is early in a strong market. If market trends change, I will exit quickly—unless it is an obvious scam, I avoid panic selling during downturns.
Distraction: Failing to keep up with real-time discussions on Twitter and group chats. In frequently rotating markets, the best returns often come early—be proactive, stay focused, and seize opportunities quickly. Aim to profit as much as possible at the start of a trend, then take a break. Work like a lion, not like a cow.
Over-Focusing on a Single Asset: Continuing to stick with a particular derivative or secondary trade after the market focus and liquidity have shifted. Even if it initially seems good, if it is not a leader in the field and market trends have changed, do not cling to trying to time it. Stay flexible and adjust strategies to follow market flows.
Lack of Proper Tools and Systems: Rushing into trades without adequate preparation can slow execution, increase costs, and create obstacles in basic operations like purchasing channels or quick bridging. Prepare everything in advance so that you can quickly enter the market and execute trades without hesitation when needed.
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