[This lesson in one sentence]: Every penny you lose is precisely transferred to someone with a more complete system than yours.
Let me ask you three questions first.
Don't answer me. Answer yourself.
The first question:
Why did you buy a coin last time?
A. I saw someone say it's going to rise.
B. It feels like it has dropped a lot; it should rebound.
C. A friend sent a message in the group.
D. I analyzed the fundamentals and on-chain data, and I have a complete logic.
The second question:
Why did you sell a coin last time?
A. It dropped too painfully, better get out.
B. It has risen quite a bit, afraid of a pullback, so I left.
C. Someone in the group said it's going to drop.
D. Reached the preset target price or stop-loss position, execute as planned.
The third question:
For every coin you currently hold, can you clearly state—under what conditions would you sell it?
If all three answers are D,
You do not need to watch this series.
If any question is not D,
What I’m about to say may be the most important few thousand words you read this year.
1. There are three types of people in the market.
It’s not the rough division of "institution" and "retail".
They are people with three different cognitive systems.
First type: feeling-driven.
Their decision-making sources: news, feelings, others' opinions, the "shape" of candlesticks.
Their core logic: "I think it will rise."
Among retail investors in the global crypto market, this type accounts for about 78%.
They contribute the vast majority of liquidity in the market—
And contributed to the vast majority of losses.
The second type: tool dependents.
They learned technical analysis.
Will look at moving averages, MACD, RSI, Bollinger Bands.
Their core logic: "Indicators show oversold, it should rebound."
This type accounts for about 19%.
They have an extra layer of protection compared to the first type—but this layer of protection is made of paper.
The reason is simple:
Indicators that everyone can see do not constitute an advantage.
When 10 million people simultaneously see "MACD golden cross",
Market-making algorithms already know where these 10 million people will buy—
Then sell to them precisely at that position.
This is called indicator trap.
It's not that the indicators are useless. It's that your way of using them is itself a predatory behavior.
The third type: system executors.
Their decision-making sources:
Complete entry logic + clear stop-loss position + on-chain data verification + sentiment reversal confirmation.
Their core logic is not "feeling", but:
"When conditions X, Y, and Z are simultaneously met, I buy at price A, set the stop-loss at B, and target C."
This type accounts for: no more than 3%.
Guess where the wealth in the crypto world will eventually flow?
2. Why "working harder" does not work.
I've seen many people work hard to lose money.
Watch the market every morning at 6 o'clock.
Subscribed to 20 news sources.
Joined 30 analysis groups.
Made dense notes.
Then still lose money.
Because their direction of effort is sinking deeper into a wrong system.
Using a metaphor:
You want to go from Beijing to Shanghai.
You are walking hard to the west.
The faster you walk, the farther you are from your goal.
This is not a question of effort. It is a question of direction.
What's more cruel is:
The more information, sometimes the faster you lose.
Why?
Because information creates an illusion of "I know more than others."
Illusions make you increase your position.
The larger the position, the more you lose when you are wrong.
There is a rule in the crypto circle:
The heaviest position is often built on the strongest confidence.
The strongest confidence often appears at the most dangerous top.
This is not a coincidence. This is the market's harvesting mechanism.
3. A number that made me think thoroughly.
At the end of the 2022 bear market, I made a statistic.
I exported all my trading records from the past 18 months,
and analyzed them one by one.
Finally, I came up with a number that made me sit in my chair for a long time:
In my profitable trades, the average holding period is 11 days.
In my losing trades, the average holding period is 47 days.
What did you read?
Let me translate:
When making money, I ran too fast.
When losing money, I stubbornly held on.
This is not my personal problem.
This is the default setting of the human brain—
Psychology calls it loss aversion:
The pain of loss is 2.5 times the pleasure of equal profit.
So we instinctively:
Quickly lock in profits (fear of loss).
Refuse to acknowledge losses (refuse pain).
This brain mechanism is fatal in the trading market.
Because the correct posture of the market is against human nature:
Let profits run, quickly cut losses.
4. What is the system?
I have said many times "system".
You may think this is a lofty term.
It is not.
The system only means one thing:
In your most emotionally stable moments, decide in advance:
Under what circumstances to buy, under what circumstances to sell, how much to use each time.
Then under any circumstances, no matter how you feel, execute it.
That's it.
There is no mystery.
But doing this requires breaking through the instincts left by 200,000 years of evolution in your brain.
This is why 3% of people succeed and 97% do not.
5. What does this system look like?
In the next 107 lessons, I will break down each layer.
But today, let me show you the skeleton first: When I face a trade, I ask myself five questions:
First layer: liquidity:
Is the money in the market currently flowing in or out?
Is the macro dollar environment tightening or easing?
Second layer: structure:
At what position is the price in history?
Is there a significant cost concentration here?
Third layer: intention:
What are the big players on-chain doing?
Are they building positions or unloading?
Fourth layer: emotion:
Where is the market sentiment now at its extreme?
Is the public greedy or fearful?
Fifth layer: narrative:
What story is the market telling?
At which stage of the lifecycle is this story?
Only when these five layers give the same directional signal—
I only consider entering. 6. An uncomfortable truth.
I must tell you something you may not want to hear.
This 108 lessons will not make you profit next week.
It's a cognitive system that requires time to internalize.
After completing Lesson 10, you will begin to understand some signals you couldn't understand before.
After completing Lesson 30, you will begin to notice that the quality of your decision-making is quietly improving.
After completing Lesson 60, you will find that you are no longer driven by the emotions of the market.
After completing Lesson 108—
I cannot guarantee you will definitely make money.
What I guarantee is:
You will have a decision-making framework that is more complete than 90% of participants in the market.
The rest depends on your execution.
Seven, before we start, do one thing.
Today, I will give you an assignment.
Not complicated.
Open Etherscan or Blockchain.com.
Randomly enter the contract address of the coin you hold.
Take a look at the top 10 wallets holding positions.
Take a look at where the largest transfers have gone in the last 7 days.
You don’t need to understand anything.
Just—
Feel it, every movement of money in the market can be seen.
This feeling is the starting point of this system.
This is Lesson 0.
It's not technology; it's a reset of cognition.
Lesson 1: What is the market—an ever-running human juice extractor.
Tomorrow at the same time.
—— Old matrix
Tools for this lesson:
Etherscan (Ethereum on-chain query): etherscan.io
Blockchain.com (Bitcoin on-chain query): blockchain.com/explorer
CryptoQuant (exchange inflow and outflow): cryptoquant.com
All free. Open it and just look. After a while, you will understand.
Question in the comments:
For the heaviest coin you currently hold—can you clearly state, under what conditions would you sell it?
Type it out. Even if it's just one sentence.
This exercise is worth more than reading this article.
$BTC Do not follow the fluctuations.