Many people want to succeed in something, and they often have clear ultimate goals, such as hoping to turn $10,000 into $1 million. However, they lack a systematic execution strategy to achieve their goals, or in simple terms, they lack a suitable methodology for themselves.

The formation of a methodology can actually have multiple approaches, such as:

- Blind Approach

This approach involves not thinking about methods or strategies at all, believing they are useless. People might naively think that randomly investing in a few meme coins will lead to overnight riches, or even build their dreams of wealth on others (often strangers). The result is often either losing some “tuition fees” in minor cases or falling into scams and losing everything in severe cases.

After one or even multiple failures, they might transition to the pragmatic or experiential approach.

- Pragmatic Approach

This involves directly learning or copying others’ methods. For example, I mainly use a DCA (Dollar Cost Averaging) strategy to accumulate Bitcoin, which anyone can adopt. However, this method may not be suitable for everyone. For instance, if your goal is to achieve 10x or 100x returns, this approach obviously can’t help you achieve your goals in the short term.

- Experiential Approach

Although these people will also learn from others’ experiences, they often only stay at the level of observation and don’t spend much time thinking about the underlying logic. They tend to trust themselves more, believing in their intuition or feelings, or even believing they are the chosen ones in this field.

They will try to accumulate experience through real investments, which can lead to two outcomes. First, if they can effectively review and summarize their experiences after making or losing money, they should be able to quickly develop and form a set of execution strategies suitable for themselves. Second, if they don’t effectively reflect and review after making or losing money, they are likely to lose all their profits or even their initial capital based on luck.

Although we often know that failure is the mother of success, some failures, such as high-leverage operations, once they occur, there’s basically no turning back, and one can only leave this field.

However, the formation of a methodology is not only based on these execution methods mentioned above but also closely related to one’s behavioral habits. So, how can we better form our own methodology?

1. First, Make Your Daily Routine Regular

Some people enter a habitual state of staring at charts after buying a certain coin, often spending half a day looking at charts. This is completely unnecessary, not only wasting time but also not very helpful for trading itself. Moreover, because this field operates 24 hours a day, many people choose to stay up late to watch the charts. Whether this method can make money or not is beside the point, but it’s certainly not good for physical health.

If you can’t even ensure that your daily routine becomes regular, how can you achieve disciplined and systematic execution in trading operations?

It’s better to first ensure that your daily life routine is regular, and then plan how to learn or trade under this basic premise. For example, regarding chart watching, you can set corresponding alarms at key price levels. If you receive an alarm, then check the corresponding chart. Otherwise, just focus on reading some articles to learn or concentrate on your work itself. If you don’t want to learn or work for the time being, you might as well go out for a run and exercise.

The key to trading is not to constantly watch the charts, but to learn not to do unnecessary things during waiting periods.

2. Clarify and Reduce Your Focus Areas

Everyone’s time and energy are limited. We can’t be proficient and professional in everything. Just clarify the areas you focus on most and continue to delve deeper into them.

For example, I currently focus mainly on two broad areas: economics and crypto.

Because my current trading frequency is very low (mainly accumulating coins), more of my time and energy is spent on writing e-books, so I might focus on a slightly broader range. But each specific broad area is divided into many sub-areas (or tracks). If your core purpose is to make money through trading, it’s recommended to choose only 1-3 key sub-areas (tracks) to focus on and research in-depth. The fewer, the better.

Just as mentioned in previous articles, taking the crypto field as an example, the current crypto market can be divided into at least 200+ different narrative tracks (such as AI, RWA, GameFi, etc.), including at least tens of thousands of different types of projects (if counting various MemeCoins, the number of projects is estimated to have exceeded 1.7 million). We can’t thoroughly research all tracks and projects. It’s mainly about choosing 1-3 tracks that you find most promising to research.

You can even use some third-party tools to optimize your time management for focusing on and researching projects. For example, use tools like Clockify (a time tracking plugin) to track the time you spend on each project website through your Chrome browser.

Time is the fairest distribution in this world. Everyone has 24 hours a day. How to optimize your time management is one of the key issues in staying ahead of others.

Don’t always chase opportunities behind various hot topics. Instead, try to dig deep and discover potential opportunities in the areas you focus on.

3. Appropriately Eliminate the Influence of Various Messages

Some people, in order to keep themselves learning, might install dozens of different news apps or even follow many people on social platforms, then spend most of their time and energy scrolling through messages every day.

On the surface, it seems like they’ve learned a lot after scrolling all day, but if you calm down and review and summarize, you might find that scrolling through 5-6 hours of miscellaneous information every day doesn’t bring much effective help. It might even affect and interfere with your plans due to various information influences.

Now is an era of information explosion, and it’s also an era that easily makes people restless. When most people are becoming increasingly restless in this environment, we should try to make ourselves calm. Why not delete unnecessary software, read more high-quality long articles or books, record more, think more, summarize more, and try to reduce those behaviors or activities that don’t help your goals? Use time on things that can create higher value.

I now basically don’t look at various so-called breaking news, and I rarely scroll through Twitter dynamics. However, I will spend time looking at various latest research reports and in-depth long articles. For example, some content from CMC Research, Messari Research, Coingecko Research, Binance Research, etc.

4. Execution Discipline and Strategy Optimization

So-called execution discipline refers to the process steps set to achieve your own goals, and these steps need to be strictly followed according to the plan.

Whether you’re doing long-term regular investment operations or short-term swing operations, you need to think clearly about what your execution discipline is, such as:

• Do good position management, never go all-in

• Always keep large positions in Bitcoin, with MemeCoin positions not exceeding 1%

• Avoid excessive position dispersion, hold no more than 10 types of coins

• Buy in batches, sell in batches

• Before trading, not only make a profit-taking plan but also a stop-loss plan is equally important

• Keep at least 10% of positions in stablecoins to ensure certain liquidity

• As we’ve said many times before, the two most important points for newcomers are: protect your principal, don’t touch what you don’t understand

• And so on…

The above might be some relatively common execution disciplines, and different disciplines might suit different people. Different people should also customize different disciplines. This needs to be expanded for thinking and execution attempts by yourself.

On the basis of execution discipline, some plans can also be optimized and adjusted as necessary with market changes, but this adjustment must be under the premise of execution discipline. For example, if your original discipline is to allocate 60% of your position to Bitcoin, but because you find that a certain altcoin is suddenly growing well, you simply sell all your Bitcoin and exchange it for the corresponding altcoin. This is not optimization, but a destructive change, and it also means a change in your risk preference.

5. Reasonably Make Good Use of Various Tools and Data

On-chain tools are an important component series in previous articles. Making good use of various on-chain data can make our research work twice as effective with half the effort. Although some people might say that on-chain data is for retail investors to see. But even so, as long as the data or indicators of the corresponding tools can provide us with some new help or guiding ideas, it’s also possible to go for necessary use and research. Things are dialectical, and we can have an inclusive attitude towards any matter.

On-chain data is mainly for two types of groups: using on-chain data for research and analysis (institutions or media, etc.), and using on-chain data to discover profit opportunities (traders or investors).

From a trading perspective, if you want to use some on-chain data to find profit opportunities, then:

First, determine the direction of data search. For example, focus on finding high-liquidity assets (to avoid slippage), identifying trend assets (using momentum), mining smart money, etc.

Second, use different tools to carry out necessary mining work. Currently, there are many types of tools, and different tool platforms might have different focuses. Some commonly used tools can also be considered for more understanding through the “toolbox” compiled in previous articles.

Next, let’s give you a brief step-by-step explanation on how to use on-chain tools to build a trading strateg.：

Step 1: Find projects based on data dimensions

Step 2: Create your own watch list

Step 3: Customize the strategy for trading

For example, we can use Momentum (used to identify trending tokens) and Mean Reversion (used to identify volatile currencies) strategies

Momentum is a relatively common trading strategy. Its core is to buy or sell based on the recent price trend of cryptocurrency. It focuses on following the trend and closing the position before the trend reverses.

Mean Reversion is a quantitative trading strategy based on statistical arbitrage, which exploits the short-term deviation of price and the regression relationship between long-term mean for trading. The core gist of this strategy is that when prices deviate from their long-term mean, there is a tendency for prices to return to their mean levels. Therefore, this strategy can also be used to identify those volatile currencies and use their volatility to trade profitably.

Disclaimer：

1. This article is reprinted from [Huali Huawai]. All copyrights belong to the original author [Hualii Huawai]. If there are objections to this reprint, please contact the Gate Learn team, and they will handle it promptly.
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