Host: Alex, Research Partner at Mint Ventures

Guest: Colin, Freelance Trader and On-chain Data Researcher

Hello everyone, welcome to WEB3 Mint To Be initiated by Mint Ventures. Here, we continuously question and deeply think, clarifying facts, exploring realities, and seeking consensus in the WEB3 world. We aim to clarify the logic behind hot topics, provide insights that penetrate the events themselves, and introduce diverse perspectives.

Career Path and Current Investment Types

Alex: In this episode, we have invited Colin, who has been on our show before. Last time, he shared his insights and methodologies on on-chain data analysis, which received a great response. Today, we invite him again to discuss a broader topic—trading. The reason I wanted to invite Colin back is that I have been following his account, and his trading range is quite extensive, covering US stocks and crypto.

Recently, he has had several impressive trades. For example, before the significant drop in Bitcoin, he started shorting BTC at around 90,000 to 100,000, reducing his position early. He also sold US stocks in Q4 of last year and made purchases during the recent panic lows. Colin has been sharing his views on trading through social media, and I have found them quite insightful. So today, we invite him again to chat with everyone. For those who are listening to our show for the first time, let’s have Colin introduce himself.

Colin: Hello everyone, I’m Colin. I run a Twitter account called Mr. Beig. I’m very happy to be invited back to the show to share my views. I am currently a full-time trader. My two areas of expertise are, first, on-chain data analysis, which helps me judge the long-term phases of BTC. The second area I’m good at is technical analysis, which is quite complex, and I have been optimizing my system. I’m glad to be here again to share my thoughts.

Alex: Welcome, Colin. You just mentioned on-chain data analysis; everyone can check out the previous podcast we recorded with Colin, where he shared some excellent insights. In that episode, he mentioned his views on this cycle, which have proven to be accurate so far. Now, let’s get into today’s main topic. You mentioned that you are currently a full-time trader. Did you start in finance, or did you gradually transition into this role?

Colin: This question is quite interesting. I should emphasize that I’m just an old retail investor who has benefited from a significant portion of the era's dividends. If it weren’t for the pandemic and the subsequent massive monetary easing in 2020, the outcome today would likely be completely different. So, I’m just a case of survivor bias.

Did I start in finance? No. But I studied in a business school during college. At that time, I was exposed to some very basic financial knowledge from textbooks. However, college doesn’t teach you how to trade stocks or cryptocurrencies. Initially, I didn’t have much money; my savings were probably less than 10,000 USD. Due to some family issues, my relationship with my family was quite poor. At that time, I was still a student with one goal: to achieve financial independence quickly and leave that environment. I took some basic finance courses in college, so at least I knew what kinds of markets existed and the general logic behind them. I learned something very important back then: I realized that doubling your performance in financial markets is a very difficult task. For example, Warren Buffett, the stock god, has an average annual return of only about 20% over approximately 60 years. To double my money in a year, which means achieving 100%, is extremely challenging. I recognized this situation at that time. So, with a few thousand USD in savings, if I didn’t work, I would run out of money in a few months.

My thought was: if I could double this few thousand USD, I would only make a few thousand USD. In this case, my goal was clear: to get a job and find various work opportunities. I used to do quite well in school, so my main source of income at that time was tutoring, which is essentially in the tutoring industry. This included teaching in tutoring centers or being a private tutor for individual students. At one point, I had 11 tutoring sessions a week, all teaching math. During the same period, I also worked at a convenience store and took on some small part-time jobs, like handing out flyers on the street or doing administrative work at tutoring centers. But later, I tried to focus more on tutoring because the hourly rate for tutoring was significantly higher.

Actually, saving money also involves what is called increasing income and cutting expenses. During that time, I lived quite a boring life. I reduced all entertainment expenses to almost zero, spending money only on necessary items, such as telecommunications fees and food. I used to have a heavy smoking habit, and aside from food and essential living expenses, most of the remaining money went to buying cigarettes, while everything else was saved as capital. I would cut my sleeping time in half or even more to study. At that time, I didn’t know anything, so I needed to spend a lot of time learning anything I could. Eventually, I saved up a significant amount of capital, and I thought that if I used this capital to trade in the market, the money I earned might help me achieve my goals more easily. This was what I considered the most critical transitional point at that time.

As for investment types, looking towards 2025, it is definitely Bitcoin, followed by Ethereum. Regarding US stocks, as Alex mentioned, I don’t really consider it trading; it’s more like index investing. Index investing is quite simple; it’s a passive investment strategy. I aim for the market’s returns, which means capturing Beta, and I don’t particularly aim to extract too much Alpha from the US stock market. The biggest difference between the US stock market and crypto is that the former is very efficient and has a massive scale. For this reason, it is very difficult to extract Alpha from the US stock market. Therefore, I focus more on seeking Alpha in crypto. The US stock portion is essentially index investing. In Q4 of last year to Q1 of this year, there was a special operation in liquidating my US stock positions, which is an opportunity that occurs only once every few years and has a low success rate. This time, I was lucky to avoid it. For index investing, the best strategy is to buy and hold.

Returning to crypto, in 2025, I actually haven’t been looking at altcoins much. In 2024, when the market was better, I spent a lot of time looking at altcoins. I was examining projects, trends, and sectors. I remember at the beginning of the year, the Restaking sector was quite hot, and there was a project called EtherFi that launched on Binance around February or March 2024. At that time, the effect of launching new coins was very good; they would rise immediately upon launch. I would spend some time researching these projects, and if I found out a coin was launching, I would buy it as soon as it opened. I couldn’t do angel round investments, so I would buy as soon as it opened on the secondary market. At that time, there was a lot of money in the market, and everyone was eager to buy these things. But the outcome later was not good; altcoins all went bearish. So, it felt like a wave at that time. I think in the short to medium term, I probably won’t look at altcoins again; I might wait until Bitcoin confirms a bottom again, and it has to be a cyclical bottom, not a temporary one, before I pay attention to altcoins. If Bitcoin has a slight rebound, altcoins will naturally follow, but I don’t want to chase those short-term gains; I want to pursue something with higher certainty. So, for 2025, in the crypto space, I mainly still focus on Bitcoin. Ethereum also has some special trading strategies, but the triggering frequency is very low, so I’m still waiting.

Key Elements of a Mature Trader's Trading Framework

Alex: Understood. You’ve explained it very thoroughly. Colin just mentioned that he started learning about investment and business knowledge in school from 2020 and gradually transitioned to a full-time trader over at least four to five years. During these four to five years, in the phase of preparing capital, his labor density was very high. In your view, what should a mature trader's trading framework include? For example, investment philosophy, professional knowledge, psychological mindset, etc., what key elements should it encompass?

Colin: Okay, I can’t say how correct my answer is, but based on my personal experience, the most important framework so far can be divided into three parts, which may differ from what most people think.

The first framework, whether it’s people around me or those who ask me on Twitter or Telegram, the first thing I tell them is that once you enter this market, you must do one thing well: goal management. You need to be very clear about why you are coming to this market. I think everyone comes to the market with a clear purpose: to make money, but that’s not enough. The next question is, how much do you want to earn? I always ask others this question. Many people say, of course, the more, the better. However, if this idea is limited to just that, it can lead to some small issues in your operations. For example, let’s say your goal today is to earn as much as possible, and I tell you that you need to turn 10 USD into 10 million USD within a week. It sounds amazing, but obviously, to achieve this goal, you would need to multiply your money by 1 million times in a week, which means you shouldn’t be in this financial market. I won’t say there’s anything wrong with that goal; I respect every goal, but that goal cannot be achieved in the financial market, or the probability is just too low. Although it sounds a bit funny, if you really want to achieve that goal, the only way is to buy a lottery ticket; you shouldn’t be buying Bitcoin or Ethereum, and you shouldn’t be on-chain; even the on-chain shitcoins are unlikely to multiply by 1 million times in a week. This is goal management. If you don’t know what your targeted profit is and which market to achieve that goal in, then in your operations, you might think, “If there’s an opportunity in Bitcoin, I’ll play with it; if there’s an opportunity on-chain, I’ll play with that; or if I see some arbitrage or launchpad, I want to try everything.” But you don’t even know where your goal is, which will cause you to miss out on many things you should really focus on. Everyone wants to make money quickly; usually, what I hear around me is that they want to quickly multiply their capital with a small amount of money.

Actually, a problem arises: the higher your expected return today, the lower the win rate of your trading strategy is typically. In this process, you will keep failing, and many people will feel that their mindset is damaged. Why is that? Am I really that bad? Why can’t I win no matter what I do? But this is a very normal thing because if you are aiming for very high profits, you must bear the situation of low win rates. This is why many people fail to plan their initial goals properly, leading to many setbacks during execution later on. So, I believe the first framework must be what is called goal management. There is actually a fairly clear goal, which is broadly the most basic goal in trading worldwide: to beat the market. If you are a US stock trader, your goal might be to beat the S&P 500, which is the market, or what we often refer to as Beta. If you are in the crypto space, you might need to outperform Bitcoin’s performance. If Bitcoin rises by a certain amount in 2024, and your operations do not outperform simply holding Bitcoin, we would say you might as well just hold Beta to achieve a decent return. This is a broad, common goal.

The second framework, in my opinion, is definitely mindset, and I won't touch on the technical aspects; I believe the technical side comes last. Many people are easily influenced by their mindset during trading. For example, there is a famous German stock god named Kostolany, who is on par with Buffett, just from a different era. He once said something that I think is very insightful. He said that the process of speculating in the market is not 2+2=4, but rather 2+2=5-1. While 5-1 is also equal to 4, he emphasized 5-1 instead of 4. What he meant is that even if you are very skilled in the market and you are right every time you look, the market will not allow you to operate and execute smoothly all the time. For instance, if you want to go long on Bitcoin, it might slowly wash you out before it surges, and by then, your position might have already been liquidated.

Even if you are correct in your analysis, the market always finds a way to make you uncomfortable during your holding period, which is the concept of 5-1. So it goes to 5 first and then subtracts 1, resulting in 2+2=4. This has a significant impact on mindset. According to a psychological concept, human nature inherently dislikes uncertainty. Every aspect of trading in this market is uncertain because if trading in this market were certain, those who find that certainty would become the richest, possibly surpassing Elon Musk. Therefore, everything is uncertain. Since everything is uncertain, it means that trading itself is very contrary to human nature. To overcome this process, you essentially have to overcome your own human instincts. For those interested in this aspect, you can look into the field of behavioral finance, which is taught in business schools at any university. The content is quite simple; it mainly introduces the concept of why people behave irrationally in financial markets. I personally believe that if you cannot overcome the emotional impacts, your decision-making is likely to deviate. Even if your trading system is very profitable, it can still be disrupted or destroyed by your emotions.

The third trading framework I consider important is your own trading system. I actually place this third, which is about how you make money. Some people are very good at project research, some excel in technical analysis, and others are skilled at high-frequency arbitrage. I believe that regardless of whether you are a full-time trader, you should have your own trading logic or trading system. I can share an interesting example I heard before. A reader messaged me, saying that he thinks investing is a very professional matter and should be left to professionals. So his approach is quite interesting; he refers to the big names and influencers on every platform with many followers, reviews all their decisions, and then checks whether the final direction is bearish or bullish, and he follows that decision. He asked me if this was correct, and my answer was simple: I absolutely do not agree.

First, I cannot know how capable every influencer on the platform is, including myself and anyone with a million followers. Second, even if they are very capable, if you do not understand their trading logic and simply follow their operations, when you make money, you won’t know if it’s due to luck or if they are genuinely skilled. If you lose money, you also won’t know if it’s because they performed poorly or if it was just bad luck. This creates a problem: you cannot review your own operations; you won’t know if you made money today whether you can replicate it next time. You also won’t be able to identify what could be avoided next time when you lose money. I think this is a serious issue. Investing is indeed a professional matter, but if you want to achieve long-term profitability in this market, you must become that professional person rather than just following a bunch of professionals. Because if you follow too many, the noise will be overwhelming, and your mind will explode.

These are the three frameworks I consider important: trading system, mindset, and goal management.

Alex: Understood. Let’s explore goal management a bit more. I understand that goal management includes two aspects: first, I need to be clear about the range of financial returns I hope to achieve, and after clarifying this, I can look for matching investment markets. For example, as you just mentioned, even a strong investment master like Buffett only achieves an annualized return of about 20%. If I hope for an annualized return of 100%, then I shouldn’t be looking to achieve this return in the US stock market, where even Buffett can only achieve 20%, but rather seek out emerging investment fields like Bitcoin, etc. If my mindset is that I want to minimize drawdowns and prefer lower volatility, but I’m okay with an annualized return of 10%, then looking at the US stock market might be achievable, and I would invest there. Is that a correct understanding?

Colin: Yes, you need to first clearly understand the range of what you can achieve. For US stocks, the average return from simply investing in US stock beta over the past few decades is about 10% per year. Buffett achieves 20%, and he has beaten the US stock market over an average of 60 years, which is why he is called the stock god. If I’m not that capable, then simply buying US stock beta, at least over the past few decades, has averaged around 10% annually. However, if your goal is 100%, then buying US stock beta is unlikely to achieve that, so you need to look for other markets. There’s also an important concept here: you need to be rational in your planning; you cannot assume yourself to be a trading genius. An annualized return of 200,000% is basically impossible.

I believe there are certainly geniuses out there, but the odds of betting on yourself being a genius are too low, similar to the concept of buying a lottery ticket. I personally prefer to make more rational judgments. For example, looking at Bitcoin, let’s consider the annualized returns from 2021 to 2024. If we look at the peak of 69,000 to the current price, the return is actually quite poor because you are looking at a range from 69,000 to around 80,000 now, which doesn’t look good on an annualized basis. So, we can extend the time frame; you can compare it with Bitcoin. Regardless, you must rationally set a goal. Once you know what the goal is, you can then formulate your strategy and select your market. This way, you will have direction, rather than trying to earn from everything. Trying to earn from everything usually results in earning nothing, which is a bias of mine.

Investment Framework Sharing

Alex: Alright, combining what we just discussed about goal setting, mindset management, etc., can you share your overall trading investment framework and what it currently looks like?

Colin: Sure, my part is actually quite simple. My total assets are divided into two parts: one for investment and one for trading. The investment part is the US stock portion mentioned earlier, which has a very low frequency; operations like topping out happen only once every few years, and I don’t know when the next one will be. For trading, I mainly allocate funds to the crypto market, focusing on Bitcoin and some other coins, rather than US stocks. In the crypto space, I personally divide my funds into two parts: one for spot trading and one for contracts. There’s also a small portion of funds for some more complex operations, but that’s a bit complicated, so I won’t mention it for now.

The spot trading portion has a larger position, and its trading decision trigger frequency is not high; it mainly involves bottom fishing and topping out. The decision-making process here is quite simple. If you’ve listened to our previous episode, it’s mainly using on-chain data as the primary basis, with macro market conditions as a supplement. If there’s a signal, I will assess whether to start bottom fishing in batches or to start topping out in batches, which is quite direct. It sounds simple, but in practice, there’s a lot of analysis and data involved in the judgment. The second part is contracts; I allocate less capital to contracts because they can increase the utilization rate of funds through leverage. There are mainly two functions for contracts: the first is to operate on small-level swing opportunities, where I use pure technical analysis to trade. Just last week, I shared a live operation on Twitter where I was scoring K, which is purely technical analysis.

The second function, as I mentioned earlier, is that technical analysis helps me refine the final entry points. This part is not like swing trading; for example, at the beginning of 2024, when the altcoin market was doing quite well, I mentioned that I would do some research. I looked at a project called PYTH, which is an oracle project, and I thought it was quite good, so I used the line chart to help me find the entry point I wanted. Sometimes I find a project that I researched and discovered is really great, but it has already skyrocketed. If I think it will rise but don’t want to chase the high directly because it might pull back immediately, I will use the technical analysis framework to plan for entry points with a good risk-reward ratio. If there’s no opportunity, I’ll just miss it. I won’t let my funds bear too much risk because this type of short to medium-term operation can significantly harm the efficiency of fund utilization if you force it into a long-term hold.

As for how to improve to the current stage, this question is quite interesting. I am still in the process of improvement; as long as I see something I think is usable, logical, and can help optimize my trading system, I will use it. The most obvious example currently is Bitcoin. Each cycle of Bitcoin behaves quite uniquely, but this cycle has been a bit different. If I were to simply look for commonalities based on the double tops of 2021, the peak of 2017, or even back to 2013, and apply them to 2025, it would be easy to make mistakes. In this cycle, Bitcoin has accumulated a significant amount of chips at the bottom, which has not happened before. At such times, I need to conduct a thorough investigation and study of this special phenomenon, combined with my own analysis; otherwise, I would be confused, thinking that it has never happened before, and I would panic in this cycle.

So I think this is a process of optimizing the system. In researching these new phenomena, I learn new things or look up other people’s opinions or views, which is part of the improvement process. At the very beginning, of course, I knew nothing; I was a blank slate, so in the beginning, I tried to learn everything and not reject learning or any school of thought. When I was just starting, I saw situations where scholars looked down on each other, with School A saying School B was useless, and School B saying School C was useless. Try not to reference these opinions and avoid biases. My advice is to listen to everything first, then combine your own thoughts to verify whether these things are effective. Don’t be rigid in your thinking; don’t simply use historical induction to judge the quality of a method. You should use deductive reasoning to confirm whether something is logical, and then gradually filter out concepts that are not applicable to this market, leaving behind the more refined parts.

Common Traits of Excellent Traders

Alex: Understood. Based on your trading experience over the past four to five years, and I believe you have also observed the thoughts and practices of many other traders, do you think good traders are born, or can an ordinary person become a good trader through later development? In your observations, what common traits do excellent traders possess in terms of personality or abilities? Which abilities require later cultivation?

Colin: I don't dare to directly define the quality of certain traders because I don't think I have that qualification; I am still learning myself. As for my personal bias, I believe that no one is born to be a trader. My view is that in this market, not to mention controlling it, just being able to adapt to it already puts you ahead of most people. This market is truly contrary to human nature; basically, every easily occurring event, including volatility and some strange market manipulations, are things you wouldn't typically see in real life or that the average person wouldn't notice. If you can adapt to these phenomena, you have already surpassed many others.

So, I don't really think anyone is born a good trader because the market itself is quite wicked, and our society's usual education is peaceful, which creates a bit of a conflict. It's not that the market is a very evil place, but the various events within it can make it difficult for newcomers to adapt. As for whether it's innate or acquired, I personally believe that most abilities can be trained through practice, and even if you have some innate advantages, you still need a period of honing your skills. For example, I mentioned mindset in the second part of the trading framework. I know some very special friends who are particularly unique because they are very insensitive to emotions; they don't really express joy, anger, sorrow, or happiness. I'm not sure if this is innate, but if it is, I think they would have a significant advantage in trading because if you want to achieve stable profits in this market, being easily swayed by emotions would make it unsuitable for you to trade directly. This can be trained, but if you enter the market without proper training, I think it can be quite dangerous.

Regarding innate qualities, I personally believe that if you want to achieve stable profits in the market, you need to possess several important personality traits: the first is humility, the second is rationality, and the third is discipline. The humility aspect might differ from what most people think; we shouldn't be humble in our dealings with others, but rather humble towards the market. You need to have a reverence for this market. If someone tells me they feel they have mastered the market, I can guarantee they have no idea what they are doing. No one can control the market; the market is always right, and it can always produce unexpected movements or events, which is why black swans exist. We must remain humble towards the market. Under this premise, every time you make a profit, you should reflect on whether it was due to good luck, being in the right place at the right time, or if you are genuinely skilled. When you lose money, you need to reflect; you cannot blame the market or the people around you, or say you had bad luck—this is actually incorrect. When you lose money, you should remain humble and think about how you can avoid making the same mistakes next time.

The second point I think is rationality, which I believe is the most important. Everyone comes to the market to make money, so every time we make a decision, we should aim towards that goal, trying to approach it from an objective and rational perspective, avoiding emotional trading. Once you lose your rationality, it’s easy to become what is known as a gambler; the market may turn into your casino, and you come here to vent your emotions. I once heard an interesting example: an amateur trader, who was a regular office worker, opened a position before work and lost money, which led him to make some unusual trades throughout the day. For instance, he was supposed to take an Uber to work, but that day he rode a bike instead, constantly thinking about the loss. Then, at night, he thought he had to open another position because he lost money in the morning. By the time he opened his second position, his objective had already deviated; he shouldn't have tried to make back the loss from the morning. Each trade is independent, and your only goal should be to make money. If you let the emotions around you or other factors influence you, you have already turned the market into a casino; you are just trying to satisfy your unwillingness to accept loss and vent your gambling desires. This is very detrimental to achieving your goal of making money.

The third point is discipline. Without discipline, if you don't stick to certain things, even if I give you a very powerful and profitable trading system, you might still mess it up due to your own actions and end up losing money. The three points I just mentioned can all be trained. The first is humility, which is about adjusting your mindset; the second is to maintain rationality; and the third is discipline. To simplify, they can all be combined into the second point, which is rationality. Because if you are rational enough, you will understand that the market cannot be controlled, and you will remain humble. If you are rational enough, you will also know that if you trade without discipline, you will inevitably face some losses later on.

Alex: Understood. One point you repeatedly mentioned is that regardless of whether each operation is successful or not, we need to reflect and summarize, extracting the good aspects of what we did last time with the correct attribution and applying it to future operations. Do you write daily trading reviews or trading notes? I see that some people have this habit, and I wonder if such a habit is a good approach? Or how do you think this habit can be conducted to be more helpful for trading?

Colin: This is quite interesting. In the early days, I tried to write down the details of every trade. I think this is a rather unique learning method, and I believe this approach has some degree of usefulness. I don't do this anymore, not that I completely stopped, but I record some more special parts. For example, if I see certain specific patterns or observe certain phenomena, I will note them down. Sometimes my memory isn't very good, so I write them down and review them the next day, and then again the day after. I look at the things I recorded every day and verify them. These notes might not be part of my trading decisions; they serve as an additional observation list.

I will observe whether these things are validated by the market later on. If they are, I will research further; if not, if I have a successful observation this time and another successful observation next time, but the third time fails, I might conclude that this was just luck in the first two instances. So, I will record some more unusual situations, but I won't write them as trading records; it's just noting down some special things. I used to keep a trading diary, but I became too lazy to continue. Currently, many things are already internalized in my mind, and I don't have too many complex operations. This practice of writing a trading diary might only happen when developing new strategies or researching new areas; I don't do it much in my daily routine anymore. However, I don't deny that this practice is useful because it can indeed help those who are unclear about their direction to record their current thoughts and operations. It can be used for post-analysis, and I think that function is still valid.

Three Memorable Trading Experiences

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

Colin: This question has been asked by many people. Since I entered the market, every time someone asks this question, the experience that comes to mind is the same one because the image is too vivid. The first one was when I was still working part-time, doing various odd jobs to save money. I mentioned earlier that I would compress my sleep time to learn some things. During this process, I would take a very small amount of capital to the market to validate some ideas, to train my market sense, and to test the waters to see if my methods were correct. At that time, I basically knew nothing, just a little bit of very basic knowledge; I truly had a pure novice mindset. I remember my capital was 2000 USDT, and I put it into a contract account to trade Bitcoin contracts. As a result, in two weeks, I turned 2000 USDT into 6000 USDT, tripling my investment. I knew that even the stock god Buffett only achieved a 20% performance in a year, and I had achieved 200% in just two weeks. I felt on top of the world, thinking to myself, how could making money be this easy? I heard people around me say that when you make money, you should reward yourself, so I bought a black jacket online for about 20 USDT to treat myself.

However, just two days after I bought it, I lost the 6000 USDT and was left with only 1700 USDT, which was even less than my initial capital. I made one trade, and my 6000 USDT turned into 1700 USDT, showing that I didn't even know what risk control was at that time. I manually closed that position and stared at the screen for about five minutes, my mind racing with thoughts about what I was doing and why my money was gone; I felt completely overwhelmed. Ironically, the jacket I ordered hadn't even arrived at my house yet, and my money was already gone, so I didn't even get to reward myself. That jacket still hangs in my closet. That trade taught me the most important lesson: before placing any trade, you must absolutely, absolutely not remove your stop-loss order.

If you have that thought, then you shouldn't trade. At that time, I had set a stop-loss order, but as it approached the stop-loss level, I removed it and moved it back a bit. When it got close again, I removed it again and moved it back a bit more. I just didn't want to admit defeat, and as a result, I kept losing more. That position could have only lost about two or three hundred USDT, but I stubbornly lost 4300 USDT, which was extremely painful; I remember that number very clearly. So since that time until today, I have never removed a stop-loss order again because the memory is too vivid, and I felt like a clown, not knowing what I was doing.

The second experience I want to share is a more positive one. There was a time when I was studying a new area of technical analysis knowledge. At that time, I would also take some small funds to the market to validate whether my views were correct. One day, I looked at two assets, OP and DAR, and I drew my predictions for these two assets on TradingView and showed them to my friend, explaining why I thought that way. My drawing showed a drop to A, then a rise to B, and then a drop to C. As it turned out, within about a week, it was validated. That was the first time I felt a great sense of achievement from this learning because I was learning something new. Subsequently, the price followed the line I drew, and even the timing matched. The timing was just a random guess, but it completely followed my drawn line, first dropping to A, then rising to B, and then dropping to C, with all three segments being exactly the same.

I happily went to show off to my friend, saying: "Look, the things I learned are really useful." At that time, I had already moved beyond beginner trading for a while, and my mindset was more stable. Besides being happy, I thought about why I could predict this movement in advance. I reflected on it and looked for more different assets, whether Bitcoin or altcoins, to see if there were any replicable patterns in their historical charts. Here, I must emphasize that prediction is actually not important. Our trading decisions should not base themselves on predictions. Prediction is prediction, and decision-making is decision-making. You can predict, but you cannot incorporate that prediction into your decision-making process. You can be happy if your prediction is correct after making a decision, and if it's wrong, just let it go; you cannot let a prediction influence your decision-making process. This is a major taboo because the market cannot be predicted.

The third experience I want to talk about is from 2024, which was my biggest loss on a single trade. I actually shared a bit about it on Twitter before, so today I’ll elaborate. In October 2023, I had already bought a considerable amount of Bitcoin. My judgment was that a bull market was about to start, even though the market sentiment at that time was still quite low. I had an idea to go long on the ETH/BTC exchange rate, using spot trading. I planned to exchange a portion of my Bitcoin for ETH to run a grid strategy, generating some profits during this consolidation phase, and then hold it long-term. It was somewhat like replacing my pure Bitcoin holding position. Holding Bitcoin means you are exposed to BETA, but I wanted to gain some alpha through Ethereum. At that time, I had a larger position in ETH, about 70% ETH to 30% BTC. If both coins rose, and my judgment about the bull and bear market was correct, I could benefit from the appreciation of the spot holdings.

If ETH rose more than BTC, I could also benefit from the BTC denominated gains. Looking back at this strategy now, of course, I know the outcome, but from October 2023 to June 2024, this strategy was profitable. I managed to capture the range of the fluctuations quite accurately, as it was consolidating within a fairly large range. At that time, there was also hype around the approval of Ethereum ETFs, and I might have been a bit overly optimistic, not paying enough attention to the so-called extreme risks. Later, on August 5, 2024, the entire crypto market and U.S. stocks plummeted. Bitcoin dropped sharply to 49,000, and Ethereum, even worse, plunged to around 2,100. The most notable thing that day was that Ethereum's decline far exceeded that of Bitcoin, causing the exchange rate to crash. The unrealized loss on my account was terrifying because my average cost was not that low, even with the grid profits helping to lower it. It was quite miserable at that time. When I opened my position at the end of 2023, the average exchange rate was about 0.052. I had made some fluctuations in the exchange rate along the way, and with the grid profits, the final average was around 0.045. Starting from August 5 was a nightmare; all the way until before Trump was elected, this exchange rate fell to 0.03. The loss from just the exchange rate was already over 30%, which was extremely painful.

In simple terms, I had no intention of stopping my losses at that time because I was waiting for another wave of a big rise. Eventually, it did rise; after Trump took office, the exchange rate rebounded to around 0.04, and I exited the position entirely at a loss. From 0.045 to 0.04, I lost about 10%, but my position was quite heavy, so this was quite painful. The lost portion was not only the spot Bitcoin but also the significant opportunity cost I incurred afterward. Because Bitcoin lost value, but it would still rise, I missed out on the subsequent opportunity costs, which hurt my performance last year.

Looking back at this trade, I believe I learned some new things: in the crypto world, you really cannot trust any asset other than Bitcoin. At that time, I viewed Bitcoin and Ethereum as assets of the same level, but now it’s clear that they are not at all. Moreover, as of today, it seems the exchange rate has already dropped below 0.018. My exit price was 0.04, and now it has been halved to 0.018, which is quite scary. On a more optimistic note, I sold my Ethereum spot at the peak last December, when the price was around 4,000. This is something to find solace in amidst the pain.

Three Pieces of Advice for My Past Self

Alex: Alright, these three cases are all very interesting, with both successes and lessons to reflect on, allowing for different experiences and teachings to be distilled. If you could have a time machine and go back to the year you started learning to trade and entered the trading market, what three pieces of advice would you give your past self, ensuring that your past self would listen? But it cannot be specific investment advice about what to buy.

Colin: Okay. The first piece of advice I would definitely give myself is to be selective about learning resources. At that time, I bought quite a few books, many of which were not valuable. I believe every book might have some value, but those books were not well accepted by the market, containing flaws and erroneous concepts. But I didn’t know that back then; I didn’t ask anyone or verify online. After spending time reading and validating, I found that these things seemed not very useful, wasting a lot of my time.

I believe most theories are valuable, but the premise is that they need to be correct and accepted by the market. Some methods, like purely historical induction, can easily lead to problems in this market. This is the first piece of advice I want to give my past self: don’t read strange books; ask some professionals to tell you which books are worth reading. From my current perspective, if someone asks, I usually say to read textbooks, at least to understand the entire operational logic of the financial market first. The so-called textbooks are the ones used in finance-related courses in university business schools; those books are truly more valuable and substantive.

The second piece of advice I would give myself is to always remember to set stop-losses and never remove them. The reason is the first trading experience I shared earlier; I can still see that jacket to this day, and every time I see it, I think of it. You must never remove your pre-set stop-loss orders; they should always be there. No matter what happens, because this can be a lifesaver. If you are unwilling to do this and hold onto your position, what might have been a 2% loss could turn into a 10% loss, which is a very serious consequence. Although Alex just mentioned that if my past self could listen, I think it’s really hard for someone to take it in just from one mention. I knew I should set stop-losses and had set them, but I just couldn’t do it; I was too unwilling to accept the loss. So I think experiencing this once leaves a much deeper impression. There’s a saying I heard before that resonates well: people can be taught a hundred times and still won’t understand, but experiencing it once might make them understand. This is a case in point for me.

The third piece of advice has a bit of a story. I want to say to remember the original intention of entering the market and not to let it affect the most important people around you. In this episode, I’ve mentioned many times that everyone enters the market to make money. So what is the purpose of making money? It’s to improve your quality of life, to be able to eat better, wear better, and use better things. Since that’s the case, making money itself is not your ultimate goal; it’s a means to optimize your quality of life. If in this process, you let the pursuit of money affect your family or partner, or even your own physical and mental well-being, then you have already strayed from your original intention for entering this market. I personally fell into this pit during my trading learning process. At that time, I was overly focused, a bit too extreme, and too eager to achieve results in this market, which led me to become indifferent to someone important around me, venting some emotions towards them, and ultimately that relationship ended.

What I want to convey is that although losing money or encountering uncertainties and setbacks can be very painful, no matter what, you should remember that you entered this market to improve your life. Making money is a means; once your means interferes with your ultimate goal, I believe that approach needs to be stopped. If I had the chance to go back to those days, I would tell myself not to do such foolish things. You came in to make money, but making money is to help yourself live a better life, to be able to lend a helping hand when those around you are in difficulty, rather than being unable to help. I think this advice is the most important.

How to View the Current U.S. Stock Market and BTC Trends

Alex: Alright, let’s get a bit more specific with our last question today. Last time we discussed market views in the Chain Data Analysis program, you were still bearish. I remember Bitcoin’s price was quite high at that time, over 90,000, and later we saw Bitcoin drop to a low of 74,000, leading many to believe that this bull market had ended and we had entered a bear market. Now we are still in a boundary zone between bull and bear, and we don’t know what stage the market is currently in. Regarding the current market, including BTC, and the recent volatility in the U.S. stock market, what are your views on the current state of the U.S. stock market and BTC? What key trading actions have you taken recently?

Colin: Let’s start with the U.S. stock market. I wouldn’t say it’s simple, but at least in my framework, it’s easier to judge. Trump is a president with a lot of emotions and actions. He has caused significant turmoil not only in the financial market but also in the global situation. The recent volatility in the U.S. stock market has been quite exaggerated. This week has been relatively calm; although there was a drop yesterday, the market conditions in the previous two to three weeks were quite terrifying. You might not see such a situation even after spending years in the U.S. stock market. Personally, I’m not too pessimistic about the U.S. stock market.

My view is this: tariffs have clearly impacted the economy, and currently, the most challenging issue for the Federal Reserve is stagflation. Inflation remains stubborn, making it difficult for them to lower interest rates. This issue will gradually ease as the economy cools down, which will be transmitted to inflation. Once inflation is alleviated, they can gradually resume the process of lowering interest rates. Therefore, I believe that while the market may experience significant volatility in the short term, as long as there aren’t any extreme risks or black swan events, I remain optimistic about the long-term outlook for the U.S. stock market. If you open the S&P chart, whether on a monthly or weekly basis, it’s consistently trending upwards at a 45-degree angle. So I believe that even the biggest crises should be manageable. However, in the short term, whether for short-term or mid-term trading, the difficulty is quite high. I’m not fully focused on trading U.S. stocks, so I don’t want to say too much to avoid sounding presumptuous.

Bitcoin is a bit different. As Alex just mentioned about the transition between bull and bear markets, when I was exiting at the peak, I retreated in batches, leaving the last 20% of my position. This 20% was withdrawn because it broke below an on-chain data point called the average cost of short-term holders. The number that day was 92,000, and once it broke below that, it quickly fell. This line, as of two days ago, was around 92,400, still near that level.

I personally believe this line is crucial for whether Bitcoin can experience another significant rise. Although it has risen from 74,000 and 75,000 to around 87,000 and 88,000 now, which is quite a substantial increase, I believe that if Bitcoin is to reach higher levels, the average cost of short-term holders will be an important dividing line. The principle is simple: a large part of the market’s fluctuations, whether up or down, comes from the trading of these short-term holders. Once the price reaches their average cost, it’s possible for those who are trapped to choose to sell, potentially leading to a wave of selling pressure that we need to be concerned about.

The second line is data I haven't shared before; it's called TMMP (True Market Mean Price). It's another indicator within the Coin Time Price system that I mentioned earlier. I can't explain this data in detail here, but I can briefly mention one of its characteristics. Its characteristic is that historically, the time Bitcoin's price has spent above this line and below this line is almost one-to-one, so this line serves as a relatively slow but quite effective boundary between bull and bear markets. Currently, this line's price is around 67,000, if I remember correctly.

When I was analyzing and making decisions about exiting at the peak, I didn't refer to this line because relying solely on it for exiting might be a bit too slow. But now, if the price continues to fluctuate, this line could become a very important true boundary between bull and bear markets. Since this bull market started rising until today, this line has not been broken; it has been moving up since it was above 60,000, and it hasn't dropped that low since. Another noteworthy point is the current chip situation of Bitcoin. About two to three months ago, the chips trapped in the range of 87,000 to 110,000 were approximately 4.5 million coins. After a few months of digestion, a significant portion of these chips has now shifted to a new range. This new range is approximately 81,000 to 85,000, with about one to two million coins having been transferred out.

From an optimistic perspective, Bitcoin being able to hold so many chips in this range without dropping or being smashed down indicates that a lot of capital still has consensus on the 81,000 to 85,000 range, and they are willing to buy in this range. However, there is another risk to be aware of: the chips we just mentioned are from the trapped chips above around 93,000. Those who are at a loss are selling out, which also creates selling pressure. Their selling indicates that their mindset is no longer as firm as before. Therefore, if they accelerate their selling and the market's capital cannot absorb this selling pressure, the price may experience further declines.

Currently, the number of chips above 93,000 is about 2.9 million, according to my 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 noticeable stickiness in the short term. If the price rises, it may be absorbed back; if the price falls, unless it drops very quickly and significantly, it may still slowly rise back to the 81,000 to 85,000 range. So the central axis of the current price game for Bitcoin may be around 81,000 to 85,000.

Of course, the price may directly break down, but if it breaks down without any larger negative news, we can expect the price to slowly rise again. Currently, the price is around 88,000, and this 88,000 position must bear the selling pressure from profit-taking in the 81,000 to 85,000 range. Because all the chips in the 81,000 to 85,000 range come from short-term holders, we cannot know how many of these chips will turn into diamond hands and become long-term holders. But these chips are currently all short-term holders, so once the price rises, these people will want to take profits. Profit-taking means selling, so they may push the price back down to the 81,000 to 85,000 range.

I personally believe that breaking below 81,000 and breaking above 93,000 are both scenarios where I lean slightly bearish. Because from a cyclical perspective—I'm not referring to a four-year cycle, but simply the transition of Bitcoin between bull and bear markets—if my initial judgment about the peak was correct, this could very well be the highest peak of this cycle. However, it doesn't prevent it from forming a double top like in 2021; it looks a bit like that now, but there isn't enough evidence and data to support my viewpoint. If my previous judgment about the peak was correct, I still lean slightly bearish, and I am currently in a cash position. I might wait until the price drops near the TMMP boundary, where there happens to be a chip accumulation area. At that point, I might start considering whether to buy in batches or wait for even lower positions.

Alex: Understood. You just mentioned that the point where you would consider buying is around the 60,000 price range of the bull-bear boundary. The other point you mentioned, the average price of short-term holders around 93,000 to 92,000, is also a significant resistance. So if the price moves up from 88,000 and successfully breaks through 93,000 and 92,000, I understand that you would also increase your position in line with the trend, right?

Colin: It's possible, but this part might involve using contract funds; my spot position might still remain short. Because looking at the data, I personally judge that it won't be easy to break through there. There are too many trapped chips above, and it coincides with our average cost of short-term holders, so I might really need to wait for a confirmation period after the breakout, for example, standing above for a week or three to five days without a significant downturn, and then I will decide whether to enter a long position through contracts based on technical analysis.

Alex: Well, my conversation with Colin today has been very enriching. We not only discussed his growth journey as a trader but also delved into some of his core insights and practical experiences during trading, including his framework for understanding the market and his operational logic in different market environments. Whether it's the emotional fluctuations in the U.S. stock market or the changes in Bitcoin's chip structure, I believe everyone can gain a lot of inspiration from this. Thank you very much, Colin, for joining us again today and bringing so many deep thoughts and wonderful content. I hope we can have the opportunity to invite you back to the show in the future to continue discussing the market and strategies. Thank you.

Colin: You're too kind, thank you.

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