How to Develop Investment Strategies and Outperform the Market

In the field of investment, developing appropriate strategies and consistently achieving returns that outperform the market is a goal pursued by many. This article will explore how to formulate personal investment strategies, how to select assets, and how to seize market timing.

Formulating a Personal Investment Strategy

When formulating an investment strategy, it is necessary to consider both personal and market perspectives.

From a personal perspective, consider the following points:

1. Total Investable Assets
2. Investment Objectives and Expected Returns
3. Risk Preference and Tolerance
4. Investment Period
5. Liquidity Demand

From a market perspective, attention needs to be paid to:

1. Market Cycle
2. Position Control

Investors should develop investment strategies that suit their own circumstances and the market environment.

How to Choose Quality Assets

To outperform the market, the key lies in selecting quality assets and seizing market timing. When choosing assets, you can consider the following aspects:

1. Growth: Pay attention to the project's core metrics, such as TVL, number of users, trading volume, etc.
2. Profitability: Analyze protocol revenue and on-chain transaction conditions.
3. Market Attention: Pay attention to the project's public opinion performance.

You can train the ability to select assets by long-term monitoring of their performance relative to Bitcoin. High-quality assets typically outperform Bitcoin during market uptrends and decline less during downturns.

Seize Market Opportunities

Market timing is an important means to improve investment returns. You can consider the following aspects:

1. Buy when market sentiment is low, and sell when the market is overheated.
2. Pay attention to the impact of major events on the market.
3. Use a strategy of long-term Auto-Invest and regular selling.

Methods to Identify Market Tops:

1. Quantitative Analysis: Pay attention to signs of slowing growth.
2. Reflexivity Theory: Market expectations may reach a peak when they cannot be sustained.
3. Qualitative Analysis: Focus on whether the driving factors for the market's rise have changed.

Sources of Market Dynamics

The core driving force of market changes is emotion. Market dynamics can be understood through the "Crust Theory":

• The core: Market sentiment is the starting point of energy.
• Mantle: Project fundamentals, price performance, and short-term events.
• Surface: Overall market performance.

Market sentiment can be judged in the following ways:

1. Observe indicators such as the Fear and Greed Index.
2. Pay attention to fund flows, such as ETF inflow situations.
3. Analyze trading data, such as position size, perpetual contract premiums, and funding rates.

Continuously discover new investment opportunities

To continuously discover new investment opportunities, you can:

1. Actively accept and understand new things.
2. Broaden your horizons and pay attention to fields outside the cryptocurrency space.
3. Maintain curiosity and trace back to analyze the reasons behind price fluctuations.

Trader's Self-Growth

Traders should continuously learn and improve themselves. Recommended books include "Tao Te Ching", "The Art of War", "Poor Charlie's Almanack", "Reminiscences of a Stock Operator", and "Financial Alchemy".

Continuous learning and enhancing cognition will be reflected in trading. Understanding oneself and the world allows for insight into market truths and achieving long-term stable returns.

Finally, what matters is not only beating the market but also finding a trading strategy that suits you, and experiencing the joy of growth through continuous practice and improvement. This feeling of ongoing progress is the core motivation that drives traders forward.