Dialogue with senior traders: How do you view the current US stocks and Bitcoin?

Moderator: Alex, Research Partner at Mint Ventures

Guest: Colin, Free Trader on-chain data researcher

Hello everyone, welcome to WEB3 Mint To Be initiated by Mint Ventures. Here, we continue to ask questions and think deeply, clarify facts, explore reality, and find consensus in the WEB3 world. We clarify the logic behind hot topics, provide insights that penetrate the events themselves, and introduce multiple perspectives.

Career paths and current investment types

Alex: We have invited Colin again in this episode. Last time, he shared his experience and methodology on chain data analysis with us, which received a very good response. Today, we invited him again, and this time we talked about a bigger topic - trading. The reason why I want to invite Colin again is that I have been following his account. The range of his trading is actually quite wide, including US stocks and cryptocurrencies.

He has made several very interesting moves recently. For example, he started to short BTC at 90,000 to 100,000 before Bitcoin fell sharply, and reduced his position very early. He also sold US stocks in Q4 last year, and bought at the panic low a while ago. Colin has also been sharing his views on trading on his own media, and I have always found it quite rewarding. So today we invite him to come and talk to you again. Maybe some of you are listening to our show for the first time, please let Colin introduce himself to everyone.

Colin: Hello everyone, my name is Colin. I run a Twitter account called Mr. Berg. I am very happy to be invited to the show again today to share my views with you. I am currently a full-time trader. The two areas I am best at are the analysis of on-chain data, which mainly helps me make judgments on the large cycle stage of BTC. The second area I am better at is technical analysis, which is more complicated, and I have been optimizing my system. I am very happy to be on this show and share my views with you again.

Alex: Welcome Colin. Just now Colin talked about on-chain data analysis. You can watch the podcast we recorded with Colin before, which has some very exciting sharing. In that podcast, he mentioned his views on this cycle, which has been confirmed so far. So let's get to the point of today. Just now you mentioned that you are currently a full-time trader. Did you start working in finance from the beginning? Or did you gradually transition to this state?

Colin: This question is actually quite interesting. I may want to emphasize first that I am just an old investor who has reaped a large part of the dividends of this era. If there had not been the epidemic in 2020 and the subsequent large-scale flooding, the outcome today might have been completely different. So I am just a case of survivor bias.

Did you start out in finance? No. But I studied business at university. I learned some very basic financial knowledge from textbooks. But universities don’t teach you how to trade stocks or cryptocurrencies. At the beginning, I didn’t have much money, and my savings were probably less than 10,000 U. At that time, due to some family factors, my relationship with my family was quite bad. I was still a student at the time, and I had only one goal, which was to become financially independent as soon as possible and leave that environment. I learned some relatively simple financial knowledge in university, at least I knew what kind of market there was and what kind of logic these things were. One very important thing I learned at that time was that I knew it was very difficult to double my performance in the financial market. Take Warren Buffett, the stock god, for example. His average annual return rate for about 60 consecutive years was only 20%. I wanted to double it in one year, which is 100%, which was very, very difficult. I was aware of this situation at the time. So I only had a few thousand U in savings at the time. If I didn’t work, I would have gone all in a few months.

My idea is: if I double these thousands of U, I will only earn a few thousand U. In this case, my goal is very clear, which is to go directly to work and find all kinds of jobs that can be done. My grades were pretty good before, so the main source of income at that time was tutoring, which is actually the cram school industry. This includes teaching in cram schools or tutoring a single student. At the most, I took 11 tutoring jobs in a week, all teaching mathematics. At the same time, I also worked in a convenience store and took some small part-time jobs, such as handing out flyers on the road, doing administrative work in cram schools, or working as a tutor. But later I tried to switch to tutoring as much as possible. As long as I could get tutoring, I would turn down other scattered jobs because the hourly wage for tutoring is really high.

In fact, there is another aspect of saving money, which is the so-called income and expenditure reduction. Regarding the expenditure reduction part, I was quite bored during that period. I reduced all my entertainment expenses to almost zero, and spent money on some necessary items, such as telecommunications fees and meals. I used to be a heavy smoker, and apart from meals and some necessary living expenses, the remaining money was almost all used to buy cigarettes, and the rest was all saved in the principal. I would reduce my sleeping time at night by half or even more and use it for studying. Because I didn't know anything at that time, I needed to spend a lot of time to learn anything I could. Later, I saved a relatively large principal, and I felt that if I used this principal to operate in the market, the money I earned might make it easier to achieve my goals. This was what I thought was the most critical transition point at the time.

As for investment products, in 2025, it is definitely Bitcoin, followed by Ethereum. As for the U.S. stock market, Alex just mentioned that I am not really trading, but more like doing index investment. The so-called index investment is actually quite simple, it is a passive investment strategy. I aim for the return of the market, that is, to eat Beta, and I don’t particularly want to get too much Alpha from the U.S. stock market. Because the biggest difference between the U.S. stock market and Crypto is that it is too efficient and has a very large volume. For this reason, it is very difficult for me to get Alpha in the U.S. stock market. So I will focus more on hunting for Alpha on Crypto. The U.S. stock market is actually doing index investment. From Q4 last year to Q1 this year, there was a special operation to liquidate the U.S. stock position. This opportunity only comes once every few years, and the winning rate is very low. This time I was lucky and avoided it. For index investment, the best strategy is to buy and leave it alone.

Back to the Crypto part, I didn't really look at altcoins in 2025. The market was relatively good in 2024, and I spent a lot of time looking at altcoins. At that time, I would look at projects, hot spots, and tracks. I remember that at the beginning of the year, the Restaking track was quite popular. At that time, there was an EtherFi that was launched on Binance in February or March 2024. At that time, the effect of listing new coins was very good, and it kept rising as soon as it was launched. At that time, I would spend some time to research these projects. If I found that a coin was going to be listed, I would buy it as soon as it opened. I couldn't do angel round investment, so I bought it as soon as the secondary market opened. At that time, there was a lot of money in the market, and everyone was happy to buy these things. But the ending was not good later, and the altcoins all went bearish. So at that time it was more like a wave. I think I shouldn't go back to look at altcoins in the short and medium term. I may have to wait for Bitcoin to confirm the bottom again, and it is a cyclical bottom, not a staged bottom, before I will pay attention to altcoins. If Bitcoin rebounds slightly, altcoins will certainly follow, but I don’t want to buy those with shorter term, I want to buy those with higher certainty. So for 2025, in Crypto, I mainly look at Bitcoin. Ethereum also has some special trading strategies, but the trigger frequency is very low, so I am still waiting.

Elements of a mature trader's trading framework

Alex: I see. You have explained it very completely just now. Colin just said that he started to learn some investment and business knowledge in school in 2020, and then gradually transitioned to a full-time trader, which took at least four or five years. During these four or five years, his labor intensity was very high in the stage of preparing the capital. In your opinion, what should a mature trader's trading framework include? For example, what key elements should be included in investment philosophy, professional knowledge, psychological mentality, etc.?

Colin: Okay, I dare not say how correct my answer is, but based on my personal experience, the most important framework so far is, and I would divide it into three parts. These three parts may be different from what most people think.

The first framework, whether it is people around me or people on Twitter or Telegram who ask me, the first thing I will tell them is that as long as you enter this market, you must do one thing well, that is, goal management. You must know very clearly why you come to this market. I think everyone comes to the market for a very clear purpose, which is to make money, but this is actually not enough. The next question is how much money do you want to make? I always ask people this question. Many people will say, of course the more the better. But if this idea is really limited to this, it will actually cause some small problems in your own operations. For example, suppose your goal today is to make as much money as possible, then I tell you that you have to double 10 U to 10 million U within a week. It sounds great, but obviously if you want to achieve this goal, you have to double it 1 million times within a week, and you shouldn't come to this financial market. I won't say that there is a problem with this goal. I will respect every goal, but your goal cannot be achieved in the financial market, or the probability is too low. Although it sounds a little funny, if you really want to achieve this goal, the only way is to buy lottery tickets. You should not buy Bitcoin or Ethereum, and you should not go to the chain. Even the local dog on the chain is unlikely to double 1 million times in a week. This is goal management. If you don’t know how much profit you have locked in today and which market to go to to achieve this goal, then you will want to play with Bitcoin if there is an opportunity, play with the chain if there is an opportunity, or you will see some arbitrage or launchpad, and want to play with everything. But you don’t know where your goal is at all, and you will miss a lot of things you should really focus on. Everyone wants to make money quickly. This is usually what I hear around me. They want to quickly double the principal with a small amount of funds.

In fact, there will be a problem. The higher the expected reward you get today, the lower the winning rate of your trading strategy will be. You will keep failing in this process, and many people will feel that their mentality is damaged. 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 thing, because the profit you are aiming for is very high, so you actually have to bear this low winning rate. This is why many people do not plan well in the initial goal setting, which leads to many setbacks in the subsequent execution. So I think the first framework must be the so-called goal management. There is actually a very clear goal here, which is broad. Basically, we normally have a basic goal for trading in this world, which is to beat the market. Suppose you are a US stock trader, then the goal you beat may be the S&P 500, that is, the market, which is what we often call Beta. If you are in the cryptocurrency circle, you may have to beat the performance of Bitcoin. Suppose how much Bitcoin has risen in 2024, if your operation does not outperform simply holding Bitcoin, we will say that you might as well hold Beta directly and get a good return. This is a broad and popular goal.

As for the second framework, I personally think it must be mentality, and it will not be related to the technical level. I think the technical level is the last. Because many people are easily affected by their mentality in operation. For example, there is a German stock god named Kostolany. He is a person of the same level as Buffett, but in a different era. He once said something, which I think is very good. He said that the process of speculation in the market is not 2+2=4, but 2+2=5-1. 5-1 is actually the same as 4, but he emphasized that it is 5-1 instead of 4. What he meant is that even if you are very good in the market today and you are right every time, this market will not always let you operate and execute smoothly. Suppose you want to go long on Bitcoin today, it may be slowly washing the market there, and it will soar when you are washed out, then your orders may have been washed out.

Even if you are right in this process, the market will always make you uncomfortable while holding a position. This is the concept of 5-1. So it will first reach 5 and then subtract 1 before it becomes 2+2=4. This thing actually has a great impact on the mentality. According to a concept in psychology, human nature is inherently disgusted with so-called uncertainty. Trading itself is uncertain in this market, because if trading in this market is certain, then the person who finds this certainty will become the richest man, and may surpass Elon Musk, so everything is uncertain. Since everything is uncertain, it means that trading itself is very against human nature. If you want to overcome this process today, it is equivalent to overcoming your inner human nature. Those who are interested in this part can look up the so-called behavioral finance subject, which is taught in any university business school. The content is quite simple, mainly introducing a concept: why do people behave irrationally in the financial market. I personally think that if you cannot overcome the influence of emotions today, your decision-making is actually very easy to be biased. Even if your trading system is very profitable, it will actually be disturbed and destroyed by your emotions.

As for the third trading framework, I think the more important thing is your own trading system. I would put this in the third place, which is how you make money. Some people are good at doing project research, some are good at technical analysis, and some are good at doing some high-frequency arbitrage. I personally think that no matter whether you are a full-time trader today or not, you should have your own trading logic, or your own trading system. Here I can share with you an interesting example I heard before. A reader sent me a private message and told me that he thinks investment is a very professional thing, and professional things should be left to professionals. So his approach is very interesting. He will refer to the big guys and bloggers with a lot of fans on each platform, read all their decisions, and then see whether the final direction is short or long, and then he will make this decision. He asked me if this was right, and my answer was very simple, that is, I absolutely do not agree.

The first is that I have no way of knowing whether every blogger on the market, including me and anyone with millions of followers, is really good or not. The second is that even if he is very good, if you don’t know his trading logic and simply follow his operation, when you make money, you won’t know whether you are lucky or he is really good. If you lose money, you won’t know whether he did a bad job or was unlucky. This will cause a problem, that is, you have no way to review your own operations. You have no way of knowing whether I can copy the profit I made today next time. You also have no way of knowing what can be avoided next time when you lose money. I think this is a more serious problem. It is true that investment itself is a professional thing, but if you want to make a long-term profit in this market today, you must make yourself a professional, rather than follow a lot of professionals. Because if you follow them, there will be too much noise, and your head will definitely explode.

The above are the three frameworks that I think are more important: trading system, mentality and goal management.

Alex: I see. Let's discuss goal management a little more. I understand that goal management includes two steps. First, I need to know what range of financial returns I hope to get. After clarifying this, I can find a matching investment market. For example, you just said that a very strong investment master like Buffett only has an annualized return of 20%. Suppose I hope that the annualized return rate is 100%, then at this time I should not go to the US stock market, where even Buffett can only achieve an annualized return of 20%, to achieve this return, but should look for what you just said may be a relatively emerging investment field, such as Bitcoin, etc. If my mentality is that I hope my drawdown is less, I hope that the volatility is smaller, but I am OK with an annualized return of 10%, then I think that the US stock market may be achievable, and I will go to the US stock market to make such an investment. Can I understand it this way?

Colin: Yes, you must first clearly know the scope of your ability. Take the US stock market for example. The average return of simply investing in the beta of the US stock market in the past few decades is about 10% per year. Buffett's is 20%. He has beaten the US stock market on average for 60 years, so he is called the stock god. If I am not that good, the annualized average return of simply buying the beta of the US stock market, at least in the past few decades, is about 10%. But if your goal today is 100%, it is unlikely to be achieved by buying the beta of the US stock market, so you have to look for other markets. There is another more important concept here, that is, you must be rational in your formulation, and you cannot assume that you are a trading genius. I want an annualized return of 200,000%, which is basically impossible.

I believe that there must be geniuses, but the probability of us betting that we are geniuses is too low, which is actually similar to the concept of buying lottery tickets. I personally prefer to make some more rational judgments. For example, let's take Bitcoin. Let's see what the annualized return of Bitcoin is in the four years from 2021 to 2024. Assuming that we look at the price from the peak of 69,000 to the current price, its rate of return is actually quite bad, because you are in the range of about 80,000 from 69,000 to the current price, so the annualized rate of return is not good. So in fact, we can look at it over a longer period of time, and you can compare it with Bitcoin. In any case, you must set a goal rationally. After knowing what the goal is, you can formulate your own strategy and choose your own market. This way, you will have a direction instead of wanting to make money from everything. If you want to make money from everything, you usually make nothing. This is some of my own prejudices.

Investment framework sharing

Alex: Okay, then based on the goal setting, mentality management, etc. just mentioned, can you share your personal overall trading investment framework and what the current situation is like?

Colin: Well, my part is actually quite simple. My total assets are divided into two parts, one for investment and the other for trading. Investment is the part of the US stock mentioned above. The frequency is really low. Operations like escaping the top really only occur once every few years, and I don’t know when the next time will be. For trading, I mainly allocate funds to the Crypto market, focusing on Bitcoin and some other currencies, but not in US stocks. In Crypto, I personally divide the funds into two parts, one for spot and the other for contracts. In fact, there is a small part of the funds that will do some more fancy operations, but that is more complicated and the position is not large, so I won’t mention it for now.

The spot position is relatively large, and its main trading decision-making frequency is not high, mainly to do bottom-fishing and top-selling. The decision-making of this part is actually quite simple. If you have heard what we talked about in the last issue, it is actually based on the on-chain data as the main basis, and the macro market conditions as the auxiliary. If the signal jumps in this part, I will make a judgment and decide whether to start bottom-fishing or top-selling in batches. It is relatively direct. It sounds simple, but in fact, there are more analysis and data in the judgment. The second part is the contract. I have less capital allocation in the contract part, because the contract can increase the utilization rate of funds through leverage. There are two main parts of the contract part. The first part is to operate some small-scale band opportunities. I will use pure technical analysis to make orders. It happened that last week, I shared a real-time operation on Twitter, and I scored K on it. This part is pure technical analysis.

The second function is as I just mentioned, technical analysis can help me refine the final entry point. This part is not like a swing operation, but like the beginning of 2024, when the cottage market was actually pretty good. I just mentioned that I would do some research. At that time, I saw a project called PYTH, which is an oracle. I think this project is pretty good, so I used the line chart to help me find the entry position I want. Sometimes I see a project that I find really great after researching it, but it has already risen to the sky. Suppose I think it will rise, but I don’t want to chase it directly because it may pull back immediately. At this time, I will use the framework of technical analysis to help me plan the points with a profit and loss ratio of OK. If not, I will miss it. I won’t let my funds take too much risk, because this kind of operation that is more inclined to short-term and medium-term, if you force it to the long term, it will actually have a great impact on the efficiency of fund application.

How to improve to the current stage, this question is actually quite interesting. I am still improving it. As long as I see something that I think is useful, logical, and can help me optimize my trading system, I will use it. The most obvious case at present is Bitcoin. In fact, Bitcoin runs very special in each cycle, but this round is a little different. If I simply look for their common points based on the double top in 2021, the top in 2017, or even in 2013, and then apply it to 2025, it will be easy to get into trouble. For example, in this cycle, Bitcoin has accumulated a lot of chips at the bottom, which has never happened. At this time, I have to do a multi-party investigation and research on this special phenomenon, and then combine it with my own analysis, otherwise I will say inexplicably that it has never happened before, and I will panic this time.

So I think this is a process of optimizing the system. In the process of studying these new phenomena, I will learn some new things, or check other people's opinions or views. This is a process of improvement. Of course, I don't know anything at the beginning, just a blank sheet of paper, so at the beginning, try to learn everything, don't reject learning, don't reject any school. Because when I first learned, I saw the situation of scholars looking down on each other. School A said that school B was useless, and school B said that school C was useless. Try not to refer to these opinions and don't be biased. My suggestion is to listen to everything first, and then combine your own thinking to verify whether these things are effective. Don't stick to the old ways, and don't simply use historical induction to judge the quality of a set of methods. You should use deduction to confirm whether this thing is logical, and then use this method to slowly filter out some concepts that are not very applicable to this market, leaving some more essential parts.

Common traits of great traders

Alex: I understand. Based on your own experience in trading for four or five years, and I believe you have also observed the ideas and practices of many other traders, do you think good traders are born or can an ordinary person become a good trader through acquired growth? In your observation, what are the common characteristics of excellent traders in terms of personality or ability? Which abilities need to be cultivated?

Colin: I don’t dare to directly define whether some traders are good or bad, because I don’t think I have the qualifications, and I am still learning. As for my personal bias, I don’t think anyone is born to be a trader. Because my opinion is that in this market, let alone control, as long as you can adapt to this market, you have actually won over most people. Because this market is really against human nature. Basically, every event that is easy to happen, including volatility, including some strange market manipulation, these things are rarely seen in real life, or in other words, ordinary people will not see them. If you want to adapt to this phenomenon, you have actually won over many people.

So I don't think that some people are born to be good traders, because the market itself is quite evil. Our society usually educates people in a peaceful way, so there is actually a little conflict. It's not that the market is a very evil place, but the various events in it will make people who just enter the market not so adaptable. As for the question of whether it is innate or acquired, I personally think that most abilities can be trained through acquired training. Even if you have some innate advantages, you still need to go through a period of acquired training. For example, I just mentioned mentality in the second part of the trading framework. I know some very special friends around me. They are special because they are not sensitive to emotions. They don't have the so-called joy, anger, sorrow, or happiness, or they almost don't show it. I'm not sure whether this is innate. If it is, I think they will have a good advantage in trading, because if you want to make stable profits in this market today, if you are easily carried away by emotions, I think it is not suitable for you to trade directly in the market. This thing can be trained, but if you come in directly without perfect training today, I think it will be a very dangerous thing.

As for the endowment, I personally think that if you want to make stable profits in the market today, you must have at least a few very important personality traits: the first is humility, the second is rationality, and the third is discipline. The humility part may be different from what most people think. We should not be humble about how we behave, but we should be very humble to the market, that is, you should respect the market. If someone tells me today that he thinks he has already controlled the market, then I can assure you that he absolutely does not know what he is doing. Because no one can control the market, the market is always right, it can always take some unexpected trends, or some unexpected events, so there are so-called black swans. We must be humble to the market. Under this premise, every time you make money, you have to think about whether I made money by luck, whether I made money just by chance, or whether I made money because I am really good. When you lose money, you have to reflect on it. You can't blame the market or the people around you, or say that you are unlucky today. This is actually not right. When you lose money, you should remain humble and think about whether there is any way you can avoid making the same mistake next time.

The second thing I think is rationality, which I think is the most important. Everyone comes to the market to make money, so every time we make a decision, we must start from this goal, try to start from an objective and rational perspective, and don't trade emotionally. Because once you lose your rationality, it is easy to become a certain type of person, called a gambler, and this market may become your casino, and you come here to vent your emotions. I have heard of a very interesting example before, that is, an amateur trader is an office worker. He opened an order before going to work and lost money, which led to him doing some operations that were different from usual during the whole day of work. For example, he was supposed to take Uber to work, but he rode a bike to work today, thinking about this all day, and then went home in the evening and thought that it was not possible, and he must open another order today, because he lost money in the morning, so he opened another order in the evening. From the second order he opened, his purpose has deviated. He should not want to make back the money in the evening because he lost money in the morning. Each of your transactions is independent, and your only goal is to make money. If you take the emotions around you or some other factors into account and affect yourself, then you have already treated the market as a casino, and you just want to satisfy your unwillingness and your desire to gamble to vent this emotion. This is actually very detrimental to our goal of making money.

The third is discipline. Without discipline, if you don't stick to certain things, even if I give you a very powerful and profitable trading system today, you may still mess up your operation and end up losing money. The three points I just mentioned can all be trained. The first is humility, which is to adjust your mentality; the second is to stay rational; the third is discipline. To put it simply, they can all be combined into the second point, which is rationality. Because as long as you are rational enough, you will know that the market cannot be controlled, and you will stay humble. As long as you are rational enough, you will know that if you operate without discipline, you will definitely face some losses in the later stage.

Alex: I see. Just now you mentioned a point repeatedly, that is, every time we operate, whether it is successful or failed, we must reflect and summarize, extract the good points of the last time in the correct attribution method, and apply them to the subsequent operations. Do you write daily trading reviews or trading notes? Because I see that some people have such a habit, I don’t know if such a habit is a good way? Or how do you think this habit may be more helpful for trading?

Colin: This is quite interesting. In fact, in the early days, I tried to write down the details of every transaction. I think this is a very special way of learning, and I believe that this method must be useful to some extent. I don’t do this now, but it’s not that I don’t do it at all, but I record some more special parts. For example, if I see some specific patterns today, or observe some specific phenomena, I will write it down. Because sometimes my memory is not very good, I will write it down, look at it the next day, and look at it the next day. I look at what I wrote down every day and verify it. These things may not be part of my trading decision-making, it will be an additional observation list.

I will observe whether these things will be confirmed by the market in the later stage. If so, I will study them further; if not, if the observation is successful this time, the next time, and the third time fails, I may say that this thing may just be lucky in the first two times and succeed by chance. So I will record some special situations, and will not write them as transaction records. I just record some special things. I did the so-called trading diary in the early days, but I was too lazy to do it later. At present, many things have been internalized to the present, and there will not be too many complicated operations. This practice of writing a trading diary may only be done when developing new strategies or researching new fields. It is not done often. But I don’t deny that this practice is useful, because it sounds like it can really help some people who are not clear about their direction to record their current thoughts and operations. It can be used for post-event review, and I think this function still exists.

Three impressive trading experiences

Alex: OK. Since you officially entered the trading career, can you share three of your most impressive trading experiences and what you learned from them?

Colin: Many people have asked me this question. Since I entered the market, every time someone asks me this question, I think of the same experience, because the picture is so impressive. The first one is that I was still working at that time, doing all kinds of odd jobs to save money. I just mentioned that I would reduce my sleep time to learn something. In this process, I would use a small amount of capital to verify some ideas in the market, to train my sense of the market, to test the water temperature, and to see if my approach was right. At that time, I basically knew nothing, just a few very basic things, and I was really a pure leek mentality. At that time, I had a very deep impression of my capital, which was 2000U. I put it into the contract account to play Bitcoin contracts. As a result, I turned 2000U into 6000U in two weeks, which tripled. I know that the performance of Warren Buffett, the stock god, is only 20% a year, and I achieved 200% performance in two weeks. At that time, I was super arrogant, and I was thinking how this money could be so easy to make. At that time, I heard people around me say that if you make money, you should remember to give back to yourself, so I bought a black jacket online, which cost about 20 U, and wanted to reward myself.

As a result, within two days after I bought it, I lost 6000U and only had 1700U left, which was less than my original principal. I only made one operation and opened a contract, and 6000U became 1700U. It can be seen that I didn’t even know what risk control was at that time. I closed that order manually and looked at the screen for about 5 minutes. My mind was full of what I was doing and why my money was gone. I was completely down. What’s more funny is that the coat I ordered has not been delivered to my home yet, and my money is gone. I didn’t reward myself at all. The coat is still hanging in my closet. The most important lesson I learned from that transaction is that every time you make a transaction, before placing an order, you must never remove the stop loss order.

If you have this thought, then don't trade. My situation at the time was that I had set up a stop loss order first. When it was about to reach the stop loss, I removed the stop loss order and moved it back a little bit. As a result, it was about to reach the stop loss again, so I removed it again and moved it back a little bit. I just didn't want to admit defeat, and the loss kept increasing. The order might have only lost about 200 or 300 U, but I lost 4300 U. It was very painful. I really remember this number very clearly. So from that time until today, I have never removed the stop loss order again, because it was really too impressive. I felt like a clown and didn't know what I was doing.

The second thing I want to talk about is a better one. I was studying a new field of technical analysis for a while. At that time, I would also take some small funds to the market to verify whether my views were correct. One day, I looked at two targets, OP and DAR. I drew the predicted lines on Trading View based on my views on these two targets and showed them to my friend, and told him why it was like this. At that time, the method of drawing was to assume that it would fall to A, then rise to B, and then fall to C. As a result, it was verified within about a week. That was the first time I got a great sense of accomplishment from this study, because I was learning something new. The subsequent price was close to the line I drew, and even the time was right. The time was still a random guess, but it was running completely close to the line I drew, first falling to A, then rising to B, and then falling to C. The three sections were exactly the same.

I was very happy to show off to my friends: You see, what I learned is really useful. At that time, I had been away from primary trading for a while, and my mentality was relatively stable. In addition to being happy, I would think about why I could predict this trend in advance. I would review the market, and then find more different Bitcoins and small coins to see if there is anything I can copy from their historical line charts. I still want to emphasize here that predictions are not important. Our trading decisions should not actually include predictions in the basis of decision-making. Predictions are predictions, and decisions are decisions. You can predict, but you cannot put predictions into decisions. You can make your own predictions after making a decision. If you are right, you can be very happy, and if you are wrong, forget it. You cannot use the results of the predictions to participate in your decision-making process because of the predictions. This is a taboo, because the market cannot be predicted.

The third one I want to talk about is 2024, which is the order that caused me the most losses. In fact, I have shared a little bit on Twitter before, and I will finish it today. In October 2023, I had already bought a lot of Bitcoin. My judgment is that the bull market is about to start, although the market sentiment is still very depressed at that time. I have an idea to go long on the exchange rate of ETH to BTC. The method is to use spot, that is, I will exchange part of the Bitcoin spot in my hand for ETH, let it run the grid, brush some profits in this oscillation process, and then hold it for a long time. It's a bit like replacing my position of holding BTC alone. Because holding Bitcoin means eating BETA, but I want to eat some alpha through Ethereum. At that time, let the grid brush like this. When I opened the order, I held more ETH, about 7 to 3. If both coins rose at that time, and my judgment on the bull and bear was correct, I could eat the increase in spot.

If ETH rises more than BTC, I can also get the currency-based income of BTC. If you look back at this strategy now, of course you know what the outcome will be, but from October 2023 to June 2024, this strategy is profitable. I caught the amplitude of the fluctuation fairly accurately, and it fluctuated sideways in a fairly large range. At that time, there was hype about the passage of the Ethereum ETF. I may have been a little overly optimistic and didn't pay much attention to the so-called extreme risks. Later on August 5, 2024, the entire Crypto and US stocks plummeted. Bitcoin plunged to 49,000, and Ethereum was even more so. I remember it plunged to 2,100. The most special thing about that day was that the decline of Ethereum was much greater than that of Bitcoin, so the exchange rate plummeted directly at that time. The floating loss on my account was terrible, because my average price was not actually that low, even if the grid income helped me lower the average price, so it was actually quite miserable at that time. When I opened a position at the end of 2023, the average exchange rate was about 0.052. I did some exchange rate fluctuations in the middle, and with the grid income, the final average price was about 0.045. It was a nightmare from August 5th. All the way until Trump was elected, the exchange rate fell all the way to 0.03. The loss in the exchange rate alone was more than 30%, which was very painful.

Simply put, I didn’t intend to stop loss at that time, because I was waiting for another big rise. Later, it really rose, Trump took office, and the exchange rate rebounded to about 0.04, so I took all the losses and exited. From 0.045 to 0.04, I lost about 10%, but my position was very heavy, so this part was actually quite painful. In addition to the loss of Bitcoin spot, the opportunity cost of my subsequent losses was also quite large. Because Bitcoin lost, but Bitcoin will rise, so I didn’t eat the subsequent opportunity cost, which hurt my performance last year.

Looking back at this transaction, I think I have learned something new, that is, in this crypto world, you really can't trust any asset other than Bitcoin. At that time, I regarded Bitcoin and Ethereum as assets of the same level, but now it seems that they are completely different. And as of today, it seems that the exchange rate has fallen below 0.018. My factory price was 0.04, and now it has been halved to 0.018, which is quite scary. What is more optimistic is that my Ethereum spot was sold at the top in December last year, and I sold all of it when the price was 4,000. This is a piece that is worth finding joy in the midst of suffering.

Three suggestions for my former self

Alex: OK, these three cases are very interesting. Some are well done, and some are worth reflecting on. They can all extract different experiences and lessons. If you could make a time machine and go back to the year when you started learning trading and entered the trading market, you could give yourself three suggestions at that time, and you could basically guarantee that you would listen carefully at that time. What kind of advice would you give yourself at that time? But it can't be a specific investment advice on which one to buy.

Colin: OK. The first piece of advice is that I would tell myself to be careful in choosing learning resources. I bought a lot of books at that time, and there were quite a few worthless books. I think every book may have value, but those books are not really accepted by the market, and they contain some flaws and wrong concepts. But I didn’t know at the time, I didn’t ask anyone, and I didn’t check online. After reading and taking the time to verify, I found that these things didn’t seem to be very useful, wasting a lot of my time.

I believe that most theories are valuable, but the premise is that they must be correct and accepted by the market. Some things, such as the simple historical induction method, are very likely to go wrong in this market. This is the first advice I want to give myself at that time. Don't read some strange books anymore. Ask some professionals and let them tell you what kind of books are worth reading. If someone asks me now, I usually say to read textbooks, at least to understand the entire operating logic of the financial market first. The so-called textbooks are the books used in the finance-related departments of the business school of the university. Those books are the truly valuable and most practical books.

As for the second suggestion, I would probably tell myself to remember to stop loss and not to remove the stop loss order. The reason is that I just shared the first trading experience. I can still see the coat at that time. Every time I see it, I think of it. Never remove the stop loss order you set in advance. Always keep it there. No matter what happens, because this thing can save your life. If you are not willing to do this thing today, if you hold the order, you may lose 10% instead of 2%. This is a very serious consequence. Although Alex just said that if I listened to it at that time, I think it is really difficult for people to really listen to it once. At that time, I also knew that I had to stop loss and set a stop loss order, but I just couldn't do it. I was really unwilling. So I think if you experience this kind of thing once, the impression will be many times deeper. There is a saying that I heard before and thought it was quite good, that is, people will not understand it even if they teach it 100 times, but people may understand it once when it is taught by things. This incident is a case in point.

The third suggestion has a story. I want to say that you should remember your original intention of entering the market and not affect the most important people around you. I have said many times in this episode that everyone enters the market for the purpose of making money. So what is the purpose of making money? It is to improve the quality of our lives, to eat better, to wear better, and to use better things. In this case, making money itself is not your ultimate goal, but a means to optimize your quality of life. If in this process, you affect your family or your significant other, or even your own body and mind in order to make money, you have actually deviated from your original intention of entering this market. I actually stepped on this pit when I was learning trading. At that time, because I was too focused, a little too extreme, and wanted to achieve results in this market as soon as possible, I was indifferent to a more important person around me and vented some emotions to him, and the subsequent relationship ended.

What I want to say is that although losing money or encountering some uncertainty and setbacks will make you very painful, no matter what, you still have to remember that you entered this market to improve your life. Making money is a means, and once your means interfere with the ultimate goal, I think this practice needs to be stopped. If I have the opportunity to go back to those years, I will tell myself not to do such stupid things. You come in to make money, but making money is to help yourself live a better life. When people around you are in trouble, you can lend a hand instead of being helpless. I think this advice should be the most important.

How to view the current US stock and BTC market

Alex: Okay, let's be more specific about our last question today. Last time, we talked about our views on the market in the data analysis program on the exchange chain. You were still bearish at that time. I remember that the price of Bitcoin was still quite high at that time, it should be more than 90,000. Later, we know that Bitcoin fell to 74,000 at its lowest. At one point, many people thought that this bull market was over and had entered a bear market. Now it is still in the boundary between bull and bear, and we don't know what stage the market is in now. For the current market, including BTC, and the recent US stock market, there are also very large fluctuations. What are your current views on the market conditions of the US stock market and BTC? What are the more critical trading actions recently?

Colin: Let's talk about the US stock market first. I wouldn't say the US stock market is simple, but at least it's easier to judge in my system. Trump is a president with a lot of emotions and actions. He has caused a lot of turmoil not only in the financial market, but also in the global situation. The recent volatility of the US stock market is really exaggerated. In fact, this week has been okay. Although it fell yesterday, the market in the first two or three weeks was quite scary. You may not see this situation even if you stay in the US stock market for a few years. I personally will not be too pessimistic about the US stock market.

My view is this: tariffs obviously have some impact on the economy. The most difficult problem for the Fed at present is stagflation. Inflation is still very stubborn, which makes it difficult for them to cut interest rates. This problem will be transmitted to inflation as the economy gradually cools down. Once inflation is alleviated, they can gradually continue to cut interest rates. So I think that although the volatility of this market may be very large in the short term, as long as there are no extreme risks or black swans, I am still very optimistic about the long-term future of the US stock market. The US stock market is to open the S&P line chart, open the monthly line chart, and the weekly line chart, and it will go up 45 degrees all the way. So I think no matter how big the crisis is, it should be able to survive. But in the short term, whether it is short-term trading or medium-term trading, it is very difficult. I am not completely focused on trading in the US stock market, so I don’t want to talk too much, which may be a problem of showing off one’s skills before an expert.

Bitcoin is quite special. Alex just mentioned the bull-bear conversion. When I was trying to escape the top, I withdrew in batches, and I kept the last 20% of my position. When I withdrew this 20% position, it fell below a data on the chain called the average cost of short-term holders. The number on that day was 92,000, and after it fell below it, it fell very fast. The data of this line as of two days ago was about 92,400, still around that level.

I personally think that this line is the key to whether Bitcoin can have another wave of relatively large increases. Although it has risen from 74,000 and 75,000 to the current 87,000 and 88,000, the range is still quite large, but I personally think 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 very simple, because most of the fluctuations or ups and downs in the market are actually largely due to the transactions of these short-term holders. Once the price rises to their average cost, there may be a so-called unwinding, and those locked-in chips may choose to sell at this time, which may usher in a wave of selling pressure that needs to be worried about.

The second line is data that I haven't shared before. It's called TMMP (True Market Mean Price), which is another indicator in the Coin Time Price system mentioned earlier. This data may not be explained in detail here, but I can briefly talk about its characteristics. Its characteristic is that historically, the time when the price of Bitcoin is above this line is almost one-to-one with the time when it is below this line, so this line will be a relatively slow but quite effective bull-bear dividing line. The current price of this line is about 67,000, if I remember correctly.

When I was analyzing and making decisions to escape the top, I would not refer to this line, because if I escaped based on this line alone, it might be a bit too slow. But now if the price continues to fluctuate, this line may become a very important bull-bear real dividing line. Because since the rise of this round of bull market to today, this line will not be broken, that is, it has been rising all the way from more than 60,000, and it has not fallen so low yet. The remaining more noteworthy is the current chip situation of Bitcoin. About two or three months ago, there were about 4.5 million chips locked in the range of 87,000 to 110,000. After digesting these months, a large part of the chips have been transferred to a new range. Now this range is about 81,000 to 85,000, and about one or two million chips have been transferred.

From an optimistic point of view, Bitcoin can take on so many chips in this range without falling or being smashed, which means that many funds still have a consensus on the range of 81,000 to 85,000, and they are willing to buy in this range. But at the same time, there is another risk that needs to be paid attention to, that is, we just mentioned that these chips are locked in from above about 93,000, and they sell at a loss, which is also a selling pressure. If they sell, it means that their mentality is no longer as firm as before. So once they accelerate the selling, if the funds in the market are no longer able to take on this selling pressure, the price may fall further.

At present, the number of chips above 93,000 is about 2.9 million, according to my weekly 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 relatively obvious stickiness in the short term. Once the price rises, it may be sucked back; once the price falls, if it does not fall very quickly and very sharply, the price may still slowly rise back to the 81,000 to 85,000 range. Therefore, the current central axis of the Bitcoin price game may be the position of 81,000 to 85,000.

Of course, the price may drop directly, but if there is no greater negative news after the drop, we can expect the price to rise slowly. At the same time, the current price is about 88,000, and this 88,000 position must bear the selling pressure from the profit-taking in the range of 81,000 to 85,000 just mentioned. Because 81,000 to 85,000 are all taken over by short-term holders, how many of them will become diamond hands and long-term holders, we have no way of knowing now. But these chips are short-term holders after all, so once the price goes up, these people will want to take profits. Profit-taking is selling, so they may sell the price back to the range of 81,000 to 85,000.

I personally think that if it falls below 81,000 or rises above 93,000, I am still a little bearish. Because if we look at it from a cyclical perspective - I don't mean a four-year cycle, but simply the bull-bear conversion of Bitcoin, if my judgment on the top was correct, this is probably the biggest top of this cycle. But it does not prevent it from running a double top like in 2021. It is a little bit similar at present, but there is not enough evidence and data to support my point of view. If my previous judgment on the top was correct, I am actually more bearish. I am currently in a short position. It may take until the price falls to the vicinity of the bull-bear dividing line TMMP, where there happens to be a chip accumulation area. If it reaches there, I may start to consider whether to buy the bottom in batches or wait for a lower position.

Alex: I see. You just said that the next point you will go to take delivery of the stocks is the price range of more than 60,000, which is the bull-bear dividing line. Another thing you just mentioned is that the average price of 93,000 and 92,000 for short-term holding chips is also a big resistance. If it goes up from 88,000 and breaks through 93,000 and 92,000 relatively smoothly, I understand that you will also increase your position on the right side, right?

Colin: It is possible, but this part may use the funds of the contract, and the spot position may still be short. Because looking at the data, I personally think that it is not so easy to break through. There are too many locked-in chips above, and it just overlaps with our average cost of short-term holders. So I personally may really wait for a period of time to confirm the breakthrough, such as standing above for a week, or three or five days, if there is no obvious decline, and finally combine the judgment of technical analysis to decide whether to enter the market through the contract position to make a long order.

Alex: Well, today's communication with Colin was really rich. Not only did we talk about his growth as a trader, but we also discussed in depth some of his core cognition and practical experience in the trading process, including his framework understanding of the market and the operation logic under different market environments. Whether it is the emotional fluctuations of the US stock market or the changes in the structure of Bitcoin chips, I believe everyone can get a lot of inspiration from it. Thank you very much Colin for being a guest again today and bringing us so much in-depth thinking and wonderful content. I hope that in the future I will have the opportunity to invite you to the show again to continue to talk about the market and strategies. Thank you.

Colin: You’re welcome. Thanks.