Rules and patience are the most valuable cryptocurrencies in this market.
I will never forget that hot summer night in 2018 when a young guy who had just entered the industry excitedly whispered in my ear: 'Brother, this time it’s definitely a sure win! I invested my entire holdings!' A week later, he watched helplessly as his 800U shrank to 200U, feeling as if his soul had been drained.
After ten years in the cryptocurrency world, I have seen too many stories like this. Some became rich overnight, while many others went to zero in an instant. What allowed me to crawl back from the edge of countless liquidations was not luck, but a set of survival rules earned through blood.
If you are in the vortex of the cryptocurrency world, perhaps my three moments of insight can help you avoid detours.
Insight One: Position management is the cornerstone of survival.
In my early days, I was also a 'all-in party'. In 2017, I heavily invested in a popular altcoin, and my assets quickly doubled. Full of confidence, I even began planning to change my car and buy a house. However, a sudden policy adjustment caused that cryptocurrency to plummet by 70% in a single day, leaving me not only with no profits but also with over half of my principal lost.
The high volatility of the cryptocurrency world far exceeds that of traditional markets, with price fluctuations of 20%-50% within a single day not being uncommon. Putting all eggs in one basket is akin to dancing on a tightrope.
After painful lessons, I devised the '33% position management method':
Mainstream cryptocurrencies as ballast (accounting for 50%-60% of total funds): Bitcoin and Ethereum are essential choices. Bitcoin is the barometer of market fluctuations and must start the bull market; Ethereum can occasionally break away from Bitcoin to follow an independent trend. This portion of the position is primarily for long-term holding and not for frequent trading.
Potential cryptocurrency task force (30%-40%): Choose quality projects in the top 50 by market cap, focusing on track leaders with actual technological breakthroughs and ecological progress. Each investment should not exceed 5% of total funds, and a pyramid building method should be used to gradually increase positions.
Cash reserve (10%-20%): Keep stablecoins for extreme market conditions or bottom-fishing opportunities. In bear markets, surviving is victory, and cash is the oxygen that keeps you alive.
Single currency positions should not exceed 15% of total funds, to avoid significant losses caused by a single project collapse. Remember, in this market, surviving is the top priority.
Insight Two: Trends are your friends, while fluctuations are your enemies.
I used to be a 'trading addict', feeling restless if I didn't buy or sell a few times a day. As a result, I found that frequent trading not only consumed a lot of fees but also often caused me to miss the main upward trends.
Most of the time in the cryptocurrency world is spent in fluctuations; true trending markets account for only a small fraction. However, most profits come precisely from capturing those few trends.
My trend judgment method is very simple:
Uptrend confirmation: When the daily MA60 is trending upwards, the price is above MA60, and there is a rhythm of 'increased volume rise, decreased volume pullback', I will determine it as an uptrend. At this time, I will only look for long opportunities.
Downtrend confirmation: When MA60 is trending downwards, the price is below MA60, and trading volume gradually shrinks, I will determine it as a downtrend. At this point, either stay out of the market or go short with a light position.
Identifying fluctuating markets: When MA60 is flat, and the price fluctuates back and forth between MA20 and MA60 with decreasing trading volume. This is the most frustrating market; my strategy is either to observe or to trade with a small position.
There is a practical tip: pay attention to the time period from 0:00 to 1:00, as exchanges often spike leverage at that moment. I often place buy orders 10% below the current price before sleeping and simultaneously place sell orders 10% above the current price, which often allows me to pick up cheap chips or sell at a high point.
Insight Three: Discipline is the assurance of profit.
During early trading, what troubled me most was not analyzing the market but controlling myself. Watching the account show losses, I would often fantasize 'maybe it will rebound if I wait a bit longer', resulting in small losses turning into big losses.
Until I set three iron rules for myself:
Stop loss, not stop profit: Any single trade loss reaching 5% of the principal must be forcibly closed. During profits, a phased profit-taking strategy is adopted, for example, selling 50% of the position at 20% profit, while the remaining portion continues to hold or move up the stop loss line.
Profit withdrawal: After each investment profit, withdraw the principal portion and continue to roll with the profits. This not only reduces psychological pressure but also ensures the safety of the principal.
Absolutely no leveraged heavy positions: Leverage is a tool that amplifies risks, and heavy positions with leverage are the fastest road to liquidation. Even when I use leverage now, I keep it within 2 times and only for short-term trading of mainstream cryptocurrencies.
The essence of trading is a probability game; it's impossible to profit on every trade, but as long as you stick to the strategy of 'small losses + small gains + occasional big gains', you can achieve stable profits in the long term.
Conclusion: There are no myths in the cryptocurrency world, only cycles and discipline.
Ten years have passed, and the young man who almost gave up back then can now calmly face market fluctuations. Last week he sent a message: 'Brother, I finally understand that trading cryptocurrencies is not about luck, but a test of human nature.'
A day in the cryptocurrency world is like a year in the human world. In this rapidly changing market, the only constant is the amplification of human greed and fear.
A true trading master is not a prediction expert but a strategy master. They build systems and then execute them firmly, letting time be their friend.#巨鲸动向 $ETH
