For newcomers who have just stepped into the cryptocurrency world, the complex concepts and volatile market often make people hesitate. In fact, the core of entering the cryptocurrency world is to master the basic logic and recognize the boundaries of risk. This guide uses plain language and practical scenarios to help you quickly build a cognitive framework and safely start your investment journey.
1. Core Concepts: Break it down in 'human language', easy to understand at a glance.
1. What is trading cryptocurrency?


It is essentially the same as trading stocks or real estate, which is 'buy low and sell high to earn the difference'. However, digital currencies have two unique properties: 24-hour continuous trading (no opening or closing restrictions, can be operated at any time) and no price fluctuation limits (it could double in a day or it could halve in a day). This makes digital currency a choice with investment returns far exceeding traditional assets in recent years, but the high returns come with proportionately amplified risks. Returns are always proportional to risks.

2. Exchange: The 'trading platform' of the cryptocurrency world


is the official channel for buying and selling digital currencies, similar to stock trading software like Tonghuashun or Dongfang Caifu. Newcomers should prioritize platforms like Binance and other leading exchanges, as these platforms have high security and strong liquidity, effectively avoiding the risk of scams; some niche coins are only available on smaller exchanges, requiring additional verification of the platform's qualifications before participating, and caution is advised regarding the safety of funds.

3. USDT: The 'universal intermediary' in the cryptocurrency world


The Chinese name is Tether, a stablecoin pegged to the US dollar at a 1:1 ratio (1 USDT ≈ 1 USD), serving as a 'bridge' for cryptocurrency transactions. When buying coins, you first need to exchange Chinese Yuan for USDT, and then use USDT to purchase other digital currencies; when selling coins, you first convert the digital currency back to USDT, and then exchange it back to Chinese Yuan. With USDT, you can freely switch between different coins, which is the core logic of 'coin-to-coin trading'.

4. Essential terms to remember: Frequently used in practice




Term Common Explanation Newcomer Practical Advice
Full position / Light position / Heavy position All / A small amount / A large portion of capital for buying coins Newcomers must choose a light position, not exceeding 30% of total funds.
Take profit / Stop loss Sell when reaching target profit / Sell when losses hit the limit It is recommended to take profit at 10%-20% and to stop loss at 5%-10%.
Bull market / Bear market Overall upward / Overall downward trends In a bull market, be cautious and observe more without chasing highs; in a bear market, prioritize holding USDT.
Going long / Going short Buy when bullish / Sell when bearish Newcomers should first practice going long, as going short is more difficult and carries higher risks.
Establishing a position / Averaging down First buying coins / Adding to positions after a drop Averaging down requires waiting for a clear stop-loss signal; avoid blindly trying to catch the bottom.
Cutting losses / Holding the bag Selling at a loss / Continuing to decline after buying Do not panic if you are holding the bag; not cutting losses means only having unrealized losses, and avoid emotional trading.
Plunge / Rebound Rapid decline in coin price / Short-term recovery after a drop Do not follow the trend to sell during a plunge, and do not blindly chase during a rebound; maintain rational judgment.


5. Mainstream digital currencies: The 'safe options' for newcomers


Refers to coins with high market capitalization, broad market recognition, and strong liquidity, with two core representatives: Bitcoin (BTC), known as the 'ancestor' of cryptocurrencies, has the highest market cap and relatively stable fluctuations, making it the first choice for newcomers; Ethereum (ETH) ranks second, supported by real technical applications and outstanding long-term potential. The selection criteria are simple: prioritize coins with a market cap in the top 10 and listed on leading exchanges, as low market cap 'altcoins' have a very high risk of going to zero, which newcomers should avoid.

6. Core risks of trading coins: Remember V God's advice


The advice from Ethereum founder Vitalik (V God) is regarded as the 'life-saving mantra' of the cryptocurrency world: Never invest money you cannot afford to lose! Newcomers must adhere to three major taboos: do not borrow money, do not take out loans, and do not use credit cards to trade coins, especially avoid futures trading. Coin prices fluctuate unpredictably, possibly due to policy adjustments, market sentiment, or technical issues leading to sudden surges or drops, and even cases of coins going to zero. Those with weak risk tolerance should not participate.

7. Futures trading: A definite no-go for newcomers


Futures trading involves contracts and can amplify profits through 'leverage' (e.g., 100x leverage = 1 yuan of capital controlling 100 yuan of profit), seeming like a 'shortcut to wealth', but in reality, it is a 'fast track to liquidation'. ⚠️ Three warnings: Newcomers should not play with futures! Newcomers should not play with futures! Newcomers should not play with futures! Data shows that over 90% of newcomers will suffer losses due to leveraged trading, leading to liquidation in a short time. Treating futures as an entry-level course is equivalent to directly giving up on investing in the cryptocurrency world.

8. Three essential elements for beginners


Tools: Preferably use Android phones for more convenient operations, as iOS systems are prone to certificate issues;
Funds: Only use spare money that you do not need in the near future and that does not affect your life; it is recommended not to exceed 10% of personal total assets;
Mindset: Refuse greed and panic, do not be arrogant when making profits, and do not be discouraged when incurring losses. A mindset of gain and loss will directly lead to operational errors, which is a 'great taboo' in cryptocurrency investment.
II. Key foundational knowledge points: Simplified interpretation
1. Bitcoin (BTC)


The 'ancestor' of decentralized digital currencies, with a total supply limit of 21 million coins by the year 2140, without central agency regulation, can be exchanged for various national currencies, and is characterized by strong security and anonymity, making it 'hard currency' in the cryptocurrency world.

2. Blockchain


The underlying technology of digital currencies, equivalent to a 'decentralized public ledger', records all transaction information and ensures data integrity through encryption and consensus mechanisms, serving as the core support for the security of digital currencies.

3. Wallet


A tool for storing and managing digital currencies (similar to a bank card), divided into software wallets (mobile apps, convenient), hardware wallets (physical devices, highest security), and online wallets (web-based, slightly higher risk). Newcomers can start with software wallets.

4. Mining


The process of validating Bitcoin transactions and maintaining network security through computing power, with successful mining rewarding miners with Bitcoin. However, the mining threshold is currently extremely high, requiring professional equipment and substantial electricity costs, with almost no profit for individual participants; newcomers do not need to pay attention to this.

5. ICO


A crowdfunding model for project teams to issue new tokens (similar to stock IPOs), but many ICO projects are 'air coins' that run away after raising funds; newcomers should absolutely not participate in any ICO projects.

6. White Paper


The official documentation of a project, including core information such as project goals, technical architecture, and business models, serving as a key basis for judging whether a project is credible; do not invest in projects whose white papers you do not understand.

7. Market Capitalization


Calculated as 'current price × total supply', it is the core indicator for measuring a coin's market position. The higher the market cap, the stronger the liquidity and security of the coin, and the relatively lower the investment risk.

Finally: Core principles for newcomers


The cryptocurrency world presents both opportunities and risks. Entering is not a 'bet'; rather, it is a long-term practice based on rational understanding. Remember the three core principles: learn more, invest less, and control risks.



The correct path for newcomers: First, thoroughly understand the basic concepts → Register on leading exchanges → Start with small amounts in spot trading → Accumulate practical experience → Consider advanced operations later. Always remember: Do not invest in coins you do not understand, do not take risks beyond your capacity, and maintain a cautious and respectful attitude to go further in the cryptocurrency world.



There has never been a myth of 'guaranteed profits' in the cryptocurrency world, only the survival rule of 'unity of knowledge and action'. May you grow in learning, reap in rationality, avoid traps, and seize real opportunities.