"I went all in, this time I will definitely double my money!" "I mortgaged my house to go all in on this coin; if I win, I can enjoy life with models, if I lose, I have to work hard!" Every time I see such statements, I want to pull these people over and wake them up with a scolding. Last week, an old investor I know put all 200,000 he had prepared for his child's tuition into a so-called 'potential coin,' and as a result, the coin's price dropped 70% in a week. Now he is begging for comfort in the community every day. Going all in is the dumbest move in the crypto world, bar none.
Today I put this harsh statement here: In the crypto world, those who go all in will eventually lose everything, no matter how many times they have won. Why? Because the market volatility in crypto is too great; no project can guarantee 100% profit. Even mainstream coins like Bitcoin and Ethereum can experience single-day pullbacks of over 20%. If you invest all your funds, once the market turns against you, there is no room for maneuver; you can only passively cut losses or get stuck at the peak.
Many people over-leverage essentially due to the mentality of "getting rich overnight," thinking "with little funds, you can't make big money without over-leveraging." But they forget that the core of investing is "long-term stable profit," not "one-time bets." If you have 100,000 in principal and invest in 10 rounds, even if you lose 5 times, as long as you win 5 times, you can still make a profit; but if you over-leverage once and lose, it’s all gone.
The essentials are here, teaching you 3 tips for effective position management, staying away from the pitfalls of over-leveraging:
First, establish a "three-tier position structure" to categorize your funds properly. I suggest everyone divide their funds into three parts: core holdings, trend investments, and risk hedging. Core holdings should account for 70%, allocating to mainstream cryptocurrencies like Bitcoin and Ethereum; this part of the funds is your "safety cushion," stored in cold wallets for long-term holding, and should not be easily touched. Trend investments should account for 25%, used for mid-term projects with clear narratives, such as quality projects in popular sectors; this part of the funds can be adjusted based on market conditions. Risk hedging should only retain 5%, used for low-risk short-term attempts, such as new launches or small-cap trading; even if you lose it all, it won’t affect the overall fund safety.
Second, use "acceptable loss amount" to determine your position, not "desired profit amount." For example, if you have 500,000 idle funds and can accept a maximum loss of 50,000, then only take 50,000 to participate in the crypto market, and resolutely do not touch the remaining 450,000. Moreover, this 50,000 should be further divided into several parts, invested in different projects, with no single project’s position exceeding 10% of the total funds. This way, even if a project incurs losses, only a small portion of the funds will be affected, not impacting your life.
Third, always leave enough emergency funds and do not touch rigid funds. Absolutely do not invest rigid funds like mortgage, car loan, living expenses, or children's tuition in the crypto market, nor borrow or take loans to trade cryptocurrencies. These funds are your "lifeline"; any losses will directly affect your family and life. I have seen too many people who misused rigid funds for trading, ultimately losing all their money and causing family breakdowns, which is not worth it.
Let me share a real example: during the bear market in 2022, a fan put all his savings of 300,000 into a meme coin, and as a result, the coin price dropped by 95%. He not only lost all his money but was also sued by the bank for failing to pay his credit card bills. If he had used the three-tier position structure, investing 210,000 in Bitcoin, 75,000 in Ethereum, and 15,000 in meme coins, even with the bear market, the decline of mainstream coins would have been much smaller than that of meme coins, and he would have at least preserved most of his principal.
Finally, a heartfelt statement: there are many opportunities to make money in the crypto market, but the premise is that you can survive long enough to wait for those opportunities. Over-leveraging is like dancing on the edge of a cliff, where you could fall at any moment. Instead of betting big once, it’s better to steadily earn small amounts, accumulating more over time. If you currently feel helpless and confused about trading, and want to know more about the crypto market and cutting-edge information, follow me @标哥说币 .
