Systems Thinking: The Winning Principles of Encryption Investment

In the encryption market, frequent and directionless decisions can often leave people exhausted. To gain more profits in this field, the key lies in mastering systematic thinking. This article will introduce you to how to establish an effective system in cryptocurrency investment, helping you avoid the negative impact of emotional decisions on profits.

The Essence of Systems Thinking

System thinking is a combination of behaviors and habits that, through consistent execution, can drive you steadily towards your established goals. It’s like finding a clear path for your investment objectives. When I applied this mindset to the encryption market, my investment experience changed dramatically.

The Importance of Establishing an Encryption Investment System

We often become victims of emotions and biases. Designing an investment system is like creating a set of investment software for your brain, which simplifies the decision-making process, making investing easier, while also helping you view your decisions with a more objective attitude. Here are 10 specific examples of applying systems thinking in the field of encryption:

1. Develop a buying strategy

I have developed the habit of investing in blue-chip coins on the 1st of every month. This method does not rely on technical indicators, nor does it attempt to precisely time the market. Instead, I invest more energy into research and other aspects of life.

2. Reasonable Allocation of Investment Portfolio

I set target ratios for each part of my investment portfolio. When a certain area becomes too dominant, I adjust it in a timely manner to maintain balance.

3. Set profit rules

Do not decide when to lock in profits based on feelings or time; instead, develop a clear profit formula.

4. Plan for profit extraction

For those protocols that cannot automatically reinvest, I have established a fixed profit withdrawal plan. Every Monday and Thursday afternoon, I will withdraw the staking rewards on time. I have scheduled these tasks in my calendar and created a dedicated folder to record my staking situation.

5. Data Tracking

To avoid getting lost in vast amounts of data, the following measures can be taken:

• Create transaction log
• Create a cost tracking spreadsheet
• Manage assets using professional tools
• Learn how to track tax liabilities
• Follow industry opinion leaders and track their prediction accuracy.

6. Investment Evaluation Checklist

Create a standard checklist for evaluating protocols. This is more helpful for making rational decisions than blindly following YouTube videos or FOMO emotions.

7. Optimize Information Intake

Just as junk food is harmful to the body, low-quality information can also affect your investment judgment. Carefully filter your information sources, including Twitter, podcasts, and newsletters, and discard useless information noise.

8. Establish Research Process

Establish a formal research process, including:

• Read the white paper and official documents
• Investigate the background and achievements of the founding team
• Check whether the project has been audited and by whom.
• Evaluate community activity and popularity

Every time you research a new project, you should strictly follow this process.

9. Cultivate good habits

It is not enough to just establish a system; you also need to develop the habit of executing these systems.

• Set up recurring tasks in the calendar
• Schedule a fixed time for specific activities
• Simplify the checklist to make it easier to execute
• Continuously optimize the system based on new experiences

10. Use the system to protect earnings

The value of an investment system lies in its ability to help you overcome emotional distractions. For example, even when certain projects perform exceptionally well, following predetermined profit rules can help you lock in profits in a timely manner and avoid significant pullbacks that may occur later.

Conclusion

The core of systems thinking lies in reducing decision fatigue. By systematizing small decisions, you can devote more energy to the more impactful big issues. While systems thinking may not be innate for some, once mastered, it will make your investment life easier and more efficient.