No matter how lively the numbers on the screen jump, they are not as real as the balance in your wallet.
Last winter, amidst the smoky atmosphere of the barbecue stall, my childhood friend stared at a screenshot of his empty trading account, his fingers turning white from squeezing. 'Four hundred fifty thousand, just like that, gone.' His voice was hoarse, and his eyes were bloodshot. That night, he threw his phone, deleted all trading apps, and locked himself in his room for an entire month.
Until early this year, he invited me out and pushed his phone in front of me — only 3000U left in the account. 'Either completely exit or use this little money to carve out a path.' His eyes were determined, as if he had become a different person. A few months later, this 3000U surprisingly rolled to 500,000. Not only did he fill the hole, but he also made an additional profit.
Here are the three iron rules he said saved him.
1. Position size 'one-third': Protecting your capital is protecting your livelihood. 'I used to think about getting rich overnight, often going all-in,' my childhood friend said with a bitter smile. 'Now I understand that surviving is the greatest competitiveness.' He set strict rules for himself: a single trade should not exceed 30% of total funds, and if losses reach 10%, he will immediately cut losses. He calculated a sum: losing 10% requires a gain of only 11% to break even; losing 50% requires a 100% gain to recover. In the highly volatile cryptocurrency market, protecting capital is more important than pursuing profit.
He has seen someone ignore risk signals on LUNA due to 'holding bias' and end up suffering heavy losses. There were also those who were misled by high returns when the Anchor protocol promised a 20% 'stable income', and as a result, UST collapsed, leaving them with nothing. Now, the first item in his trading plan is always 'capital protection'.
2. The trend is your friend, not your enemy. 'I used to want to beat the market, but I was always taught a lesson by it,' said my childhood friend, shaking his head. 'Now I only do one thing: follow the trend and don't fight the market head-on.' He no longer predicts tops and bottoms but observes the market direction. When the market goes up, he goes long; when it goes down, he shorts, just like a surfer riding the waves.
Not long ago, he made stable profits for over ten days with this approach, earning as much as 8000U in one day. He told me, as mentioned in 'Reminiscences of a Stock Operator': 'The market always moves in the direction of least resistance.' The fundamental reason many people lose money is that they always want to cover both sides of the market, resulting in getting hit from both ends. He especially mentioned that every bull market has its own way to play; the market is always changing, and only those who can adapt deserve to survive. Do not fall into path dependence; the old methods from a few years ago may no longer suit the current market.
3. Locking in profits: The wisdom from 'paper gains' to 'real profits.' 'What’s the silliest thing? It’s watching the digits in the account soar and plummet, and in the end, it’s all gone,' my childhood friend admitted. 'The numbers on the screen are virtual; only what’s transferred to the wallet is yours.
He now strictly implements a profit layering lock-in strategy: for every profit earned, he only leaves 30% to continue investing, and transfers out the rest. He has seen too many people fail to take timely profits due to complacency and greed, ultimately watching their earnings evaporate.
He particularly mentioned the importance of market sentiment as a signal for profit-taking: when everyone on social media talks about luxury cars and branded watches, and when cryptocurrency applications top the app store charts, it might be time to consider taking profits.
'The correlation of crypto assets is close to 1 — true risk diversification must cross sectors,' he added.
Don't think that holding many types of tokens means diversifying risk; when the market crashes, they are likely to drop simultaneously. Surviving is the ultimate rule of the crypto market. My childhood friend has now built a small circle to share his experiences.
There’s a newcomer in the circle who started with 1500U and grew it to 8000U in three months; there was also someone who almost went all-in but was advised against it in time, avoiding a liquidation. 'In fact, many people lack skills; what they lack is the discipline to control themselves,' he shared in the circle. 'The crypto market never rewards perfect people; it only rewards those who can persevere to the end.'
Recalling how he drank with red eyes last winter, and now calmly analyzing things, I realize that true turnaround is not about how much you earn, but about the reshaping of awareness and the formation of discipline. In this highly volatile field, there is no one-size-fits-all solution.
The true 'moat' is your continuously iterated cognitive system, iron-clad trading discipline, and strong emotional management ability. Remember, the ultimate winner is not the smartest person but the one who is still in the game at the end.
To you in front of the screen, will you choose to repeat yesterday's mistakes, or will you give yourself a chance for rebirth like him?
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