The secret to earning 4 million in a bear market in 7 months Ignore the noise and align knowledge with action.

The Key to Making 4 Million in a Bear Market Tune Out the Noise and Act on Knowledge

Original Title: “How I Made Four Million in a Bear Market for 7 Months”

Author: Nakahashimi

This year, I did four very correct things.

First, the day after Silicon Valley Bank declared bankruptcy, I went long on Bitcoin and automatically exited with a take-profit a month later.

• A Detailed Explanation of the Improved Version of YFI Token Economics Can Yearn Win the Turnover Battle?
• Is Bitcoin Spot ETF on the horizon? BlackRock and Grayscale bring good news, with the crypto market rising first as a sign of respect.
• TON Storage and Arweave Comparison

Second, in late June, I noticed that the correction was almost over, so I started going long on Bitcoin. When I realized that the price couldn’t reach my desired exit point, I exited just before panic selling.

Third, in late June, I began my research on macro liquidity and confirmed that the widely circulated “monetary tightening” was a false proposition. I then calmly started my vacation because I wanted to wait for the short-term frenzy to subside before fully embracing the market.

Fourth, I returned to the market in late August, comparing the relationship between the Bitcoin bull run cycle in 2021 and the progress of the futures ETF application. I also developed my token tracking list and investment plan, and then waited for the entry signal. In early September, I went long on Bitcoin.

Of course, my investment plan also includes many other tokens. Some are duds, some are short-lived, and some still have a promising future. But I don’t plan on talking about them because I don’t want to sound like a signal operator.

Now, while waiting for the exit signal, I’m planning to do some other things. I’m still flipping through those trading bibles that I never tire of reading. I really enjoy the narrative style of my favorite investment masters, so I thought, why not try my hand at writing something similar and let everyone get to know me? I believe I’m someone worth knowing.

What I really want to document is how I have been improving myself through trading. Although I believe these experiences will never disappear from my world, I have this urge to share and share right now. I hope that one day, my discoveries will also be helpful to others, just like the help I received from the trading masters I idolize.

Of course, I will be very cautious to prevent sharing from turning into preaching.

Normally, I don’t disclose what I’m doing to others. I’m also not very talkative in social situations. Most of the time, I listen to what people have to say first, and then based on their perspectives and positions, I decide whether I should be honest. From past experiences, as soon as I’m honest, I’m seen as a charlatan, a self-centered egoist, a self-proclaimed MLM kingpin, or a religious fanatic who betrays Marxist philosophy in favor of pseudo-science.

I spent some time figuring out why my sincerity would turn into offense.

This leads me to the first thing I want to say: people often treat the viewpoints they receive as sacred and inviolable dogmas. These viewpoints are often picked up on the roadside, but people defend their current knowledge as if they were defending their lives.

I went through this stage myself, and at that time I often reflected on why I would subconsciously get into an argument for no reason and uncontrollably try to refute the other person.

From this, I discovered the deep-rooted desire to “prove oneself right” in my heart. Proving oneself right means proving oneself superior and more enlightened than others.

The clash of viewpoints may seem like a pursuit of truth, but it is actually a pursuit of cheap self-satisfaction and superiority. This behavior also causes the greatest harm to individuals. Pursuing truth will never make a person become irritable, irascible, critical of others, or aggressive. It is only when one’s beliefs are challenged and their self-perception is damaged that these negative effects occur. (The nature of seeking expanded ideas is even more extreme than capital.)

And I realized that self-perception is the least necessary thing for me, especially when I am involved in the market. It is more important to do things right than to “prove oneself right”. Pursuing self-perception makes people stubborn, causing them to entirely view and treat things and others according to their own wishes and beliefs, and to completely perceive the market based on their own desires and beliefs.

But the market will never move according to an individual’s will.

I began to learn to clearly distinguish between the inertia of my own and others’ thinking and what is a fact. I especially examine the source of every idea, cognition, and conclusion. And I learned to act based on factual truth, not on popular beliefs, my own thinking inertia, or subjective desires.

I slowly dismantled the walls in my own thinking, and the market began to appear in front of me in a very simple image. This description may be a bit exaggerated, but I often feel that I can resonate with its breath and heartbeat.

Now, I need to review the reasons why, when almost everyone was bearish and waiting for the “final crash,” I bet on an upward trend.

Actually, it’s very simple. I only looked at three indicators: macro liquidity, the relationship between the 2021 ETF application process and the Bitcoin price cycle, and the trend chart of Bitcoin.

In July, I wrote an article that analyzed the reduction in global central bank, especially the Federal Reserve’s, monetary liquidity due to rate hikes and balance sheet shrinkage.

The conclusion is that after several months of frequent and substantial rate hikes, the total money supply in the United States is still near its peak, the money supply in the Eurozone even returning to its highest level in a decade. Additionally, the scale of the Federal Reserve’s balance sheet reduction is minuscule compared to its massive asset holdings of $8 trillion, as well as the trillions of dollars in new U.S. Treasury bonds issued by the Department of the Treasury.

The total liquidity in the cryptocurrency market is currently much higher than the liquidity at the same price level in 2020.

I have debunked the proposition of liquidity tightening and found relatively reasonable explanations for the rise in the European and American stock markets and the cryptocurrency market in the first half of the year.

Later, I studied whether ETFs really have an impact on the cryptocurrency market. Although it was only a rough comparison, I found some interesting things – in 2021, Bitcoin had three vertical stretches, corresponding to institutions collectively applying for Bitcoin futures ETF, news of ETF approval spreading, and ProShares ETF landing on the NYSE (Bitcoin price surged that month).

Finally, I observed the long-term trend of Bitcoin’s price and volume data, which told me that it is currently in an uptrend. Then, I discovered in the short-term trend chart that despite frequent downward tests, Bitcoin’s short-term support levels continued to rise and the actual supply kept shrinking. Based on experience, this is usually the behavior of market makers shaking out weak hands. So I started amassing long positions in Bitcoin, and when I noticed that my positions were making steady but small profits and that it was easier for the price to go up than to go down, I increased my positions and leverage, going all-in on the long side.

If there’s one more thing to add, it’s that I firmly believe that wealth stays on the unexpected side for most people, or more precisely, failure resides in the commonly accepted wisdom (original quote from Wall Street Ghost).

The quieter the market has been in the past two months, and the less people discuss and pay attention to it, the more convinced I am that opportunities are coming.

It’s not that I love going against the crowd, but after a long period of introspection, I can easily recognize those concepts, common sense, or worldly norms that are of no benefit to people’s pursuit of a better life, or the ideas that everyone loves. People often treat certain concepts as an unchangeable reality.

For example, people love to use bull market and bear market to describe the market, but in reality, bulls and bears are definitions, perspectives, and opinions, not facts. Such definitions tend to lead people to believe that the market will continue to operate in a “bull market” or “bear market” manner for a very long period of time, but in fact, in the so-called “bear market,” I often find many good investment opportunities.

This is the wonder of it all, to perceive the beliefs you hold as true, to examine your beliefs, and once your beliefs change, our options become more abundant.

My journey of growth hasn’t been smooth, nor happy. But I’m glad I found my current self.

I have learned a lot about how to face the difficulties of life and interpret the market.

One is to always maintain a sense of order in life (making goals an aid when necessary).

I was in a daze from October 2021 until the whole year of 2022, so the most wrong investments and market operations in my life happened during that time. I was hit one after another, thinking my life would never get better again, but one day, at five in the morning, I inexplicably got out of bed and did a 60-minute HIIT workout.

After sweating profusely and reaching my peak heart rate, I turned on some music, stretched and relaxed, took a hot shower, and applied a thick body lotion. I made myself a cup of coffee and sat at my desk to start working on tasks I had been procrastinating for two weeks.

At that moment, all the gloom disappeared, and my good mood told me that I was ready to face any difficulties and hardships.

Since then, I have understood that what traps people are emotions and feelings, never the things themselves. Now, I have maintained this order in my life for a whole year, and my life has never been as relaxed, enjoyable, and happy as it is now.

Another is to never stop learning in the pursuit of goals.

When I mastered the basic knowledge of economics, learned technical analysis, and various thoughts, theories, strategies, and risk management methods in trading, I realized that this market is filled with many people who occupy professional positions and play professional roles but are not professional at all. They generally lack common sense when participating in the market, but this knowledge is extremely important. Without them, we cannot understand every signal in the market or think like the main players.

At the same time, I realized that most goals can start with asking the right questions, and most problems can be solved through learning, practicing, and adjusting goals based on feedback. Of course, this cycle is useful for trading and learning English. I don’t know if it works in other fields, but I’m also ready to experiment with things I’m not good at.

Lastly, learn to understand your own mind, understand the origins of thinking inertia and desires, and never be trapped by them.

Anyone who has deeply studied trading will understand that the biggest enemy of any trader is definitely not the market or the market makers, but himself. More precisely, it’s the trader’s personal thinking activities, emotions, and feelings.

Inspired by fantasy, disturbed by fear, driven by impulse, hindered by inertia. Mistakes are also born from this.

But it seems that I only feel this way occasionally when I first started trading.

Trading is my training ground. It helped me find my greed, my fear, my complacency, all my deeply ingrained beliefs and desires, and then I removed them one by one. Interestingly, after quieting my thinking activity, I became a very calm person emotionally. This gave me a great advantage in participating in the secondary market. I don’t understand how it happened, but I learned to do the right thing at the right time.

Being able to turn four million in a bear market when everyone else is pessimistic is thanks to understanding my own brain.

Of course, four million is a small number for many people. Compared to the money I made in the market in 2020 and 2021 when I was naive and ignorant, it is insignificant in terms of performance. But compared to back then, I prefer the money I made this time because it validated certain things for me. The market is a laboratory, it proved that my conjecture can be elevated to a rule, and I now have a completely valid set of principles.

In the raging bull market of 2020, I didn’t know how I made so much money. I often worried that if I left certain environments or sources of information, I would no longer be able to profit.

But this time, I am very clear about the methodology I employed to leverage the world with a small amount of capital.

I know the reason behind every decision I make, and I know how I found those reasons. More importantly, if I need to make any future decisions, I know exactly where to find the reasons.

This means that I can learn anything I want with them, achieve every goal I set, and overcome every future low point.

I could completely lose these four million in a future investment, or even all my savings, but I have gained something more important than profit.

We will continue to update Blocking; if you have any questions or suggestions, please contact us!