The frenzy receded like a tide, leaving me with profound insights after the digital surge and crash, as well as a set of survival rules for stable profits.
In 2017, the frenzy of altcoins swept through the entire cryptocurrency circle. I clearly remember buying ADA in batches around $0.03, and three months later, it surprisingly soared to a peak of $1.2.
The zeros following my account assets kept increasing, and every day I woke up with a sense of unreality that this money was enough to buy a house in the city outright.
Greed caused me to miss the best selling point. As ADA plummeted to $0.2, eighty percent of the profit flowed away like water, and the dream of buying a house shattered.
This experience made me completely understand: those who can buy are students, while those who can sell are masters. In this highly volatile market, the art of escaping peaks is far more important than the technique of bottom-fishing.
Stop-loss: buckle up for your trading.
After eight years of ups and downs in the crypto space, I have summed up an iron law: the loss of a single trade must not exceed 2% of the total principal.
This is not a suggestion made lightly, but a lesson bought with real money. Every time I buy a cryptocurrency, I immediately set a stop-loss line at -10%. It's like buckling up when driving; not to expect an accident, but to ensure safety in case of an unexpected event.
In terms of specific operations, I use a combination of three stop-loss strategies.
Technical stop-loss: Set the stop-loss price 2%-3% below key support levels; once it falls below, it indicates that the trend may reverse.
Amount stop-loss: Strictly follow the rule that a single loss does not exceed 2% of the principal; this is the iron law of professional traders.
Time-based stop-loss: If the price does not move in the expected direction within 24 hours of entry, even if it has not hit the stop-loss point, consider exiting.
Many people worry that the market will reverse after a stop-loss, so they choose to 'hold onto the position,' resulting in continuous losses. In fact, a stop-loss is not a loss but a risk control baseline to avoid 'a total collapse from a single mistake'; preserving the principal allows for the possibility of a comeback.
The market never rewards 'quick hands' but only rewards 'calm minds'.
Tiered take-profit: Let profits run while locking in gains.
Take-profit is an art of balance: it requires holding onto trends to let profits run while ensuring that cooked ducks do not fly away. After multiple trials and errors, I summarized the 'tiered take-profit method', which is particularly suitable for ordinary people who do not have time to monitor the market.
For example, suppose a coin rises from $1 to $2:
First tier: Sell 30% of the position to recover the principal and some profits, ensuring a stable mindset.
Second tier: When the price rises to $3, reduce holdings by 30% to lock in considerable profits.
Third tier: Set a trailing take-profit on the remaining 40% of the position, automatically selling when the price drops 15% from the highest point.
The core logic of this method is: not to pursue selling at the highest point, but to ensure that every transaction must yield profit through tiered locking, accumulating small victories for compound interest.
When profits reach a 1:1 risk-reward ratio, I will move the stop-loss level to the cost price to ensure 'break-even'; when profits reach 1:2, I will move the stop-loss price to the 1:1 position to lock in some profits.
Trading mindset: Discipline is the dividing line between speculation and investment.
In the crypto space, trading is not about winning the market, but about first winning over that impatient self.
I have seen too many people succeed nine times but return to square one due to one mistake. The problem is not luck, but that they never truly learned how to 'admit defeat'. Data shows that over 80% of liquidations come from those unwilling to set stop-losses.
The key to avoiding emotional trading is to formulate and strictly adhere to a plan:
Before each daily trade, clarify the trading target, entry price, stop-loss price, take-profit price, and position size, and write them down in the trading journal.
When there is no clear signal, firmly do not enter the market; it is better to miss out than to make a mistake.
Accepting losses is part of trading; do not blame yourself or become emotional after a loss; immediately review and summarize.
My personal rule is: in a bull market, trade 2-3 times a week; in a sideways market, trade 1-2 times a week; in a bear market, trade 1-2 times a month, to avoid emotional loss from frequent trading.
Remember, the essence of the market is a probability game; smart traders use a 2% risk to bet on trend dividends. When setting a 2% stop-loss and a 20% take-profit, only a 34% win rate is needed to achieve positive returns.
Surviving means being able to leave the market with a smile.
After eight years of ups and downs in the crypto space, I have witnessed too many stories of overnight wealth, as well as many who have lost everything in the roller coaster of price fluctuations. Those who can truly leave with profits are often those who strictly adhere to discipline and understand risk control.
A stop-loss is like the brake system in a car; it should not be used only when hitting a wall, but should be lightly pressed before feeling out of control. A take-profit, on the other hand, ensures that we do not faint from lack of oxygen during a long trip.
The crypto space has never lacked opportunities; what is lacking are those who can protect their capital and seize opportunities when they arise. Surviving means qualifying for flipping positions.
Have you ever had similar trading experiences? Feel free to share your stories and insights in the comments so we can all grow and earn wealth together in the crypto space.
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