The phone ringing at dawn is jarring, yet another comrade who almost got eliminated by the market
It's a bit past two in the morning, and my phone on the nightstand is vibrating non-stop. I answer the call and hear my student Xiao Lin’s tearful voice: "Teacher, my SOL long position has exploded! I just received a car loan message, and if I don't make the payment next week, my car that I just bought six months ago will be towed away..."
I rub my temples as I listen to his story—once again, he leveraged his entire position to chase the rise, and as soon as the market slightly pulls back, he gets forcibly liquidated, even using his daily transportation tool. After hanging up, I open my cold wallet and look at the balance that has been accumulating since the bear market a few years ago. I remember that even during the most turbulent times in the market, my maximum drawdown has never exceeded 8%, and I feel it's time to share these truly useful "life-saving tips."
Don’t believe in those 'trading based on inspiration for three days and nights' metaphysics, and don’t touch the nonsense of 'insider trading.' In my view, the crypto market is not a casino, but a 'mathematical game' played by probability.
Profits must have a 'safety valve,' and capital must wear armor.
Once had a student who made some money during last year's surge and became quite arrogant, even investing family money. As a result, a sharp correction led to a total loss, nearly breaking family relationships. I've seen too many of these situations.
My iron rule is: always set take-profit and stop-loss when opening a position. When profits reach 10% of the capital, immediately withdraw half of the profit to a cold wallet, and let the rest roll with the market.
Simply put, it’s about 'taking profit without being greedy.' I remember during a previous surge, with not much capital, after making some profits, I first withdrew part of it to a cold wallet and continued to hold the rest. When the market rose again, I withdrew a part of the new profits. Later, when the market corrected, I only gave back a small portion of the profits, and my capital remained safe.
In the past few years, I have regularly withdrawn funds dozens of times. The money from my first withdrawal was used by my family, and they still believe this profession is reliable. There was a week when I withdrew quite a lot, and even the exchange's customer service called to verify if I was a 'quantitative robot.' I laughed and said, 'I just used a simple method.'
Combine multiple cycles for positioning, and you can steadily profit even in fluctuations.
The most common mistake beginners make is to fixate on short-term candlestick charts, chasing after small rises and panicking at small dips. I always look at multiple time frames simultaneously: daily charts for the big direction, 4-hour charts for volatility ranges, and shorter cycles for precise entry points.
For the same asset, I consider different strategies: one part of the position follows the trend after a breakout in the larger cycle, with stop losses set at key positions to secure big market movements; another part operates lightly in the overbought and oversold areas of the middle cycle, specifically capturing small opportunities for corrections. All stop losses are strictly controlled to a small proportion of the capital, while take-profit targets are set relatively far away.
Once during a market fluctuation, I remember very clearly: at that time, the long-term trend was still upward, I positioned myself at the support level in the middle cycle, while placing light short orders at the resistance level above. Suddenly, the market spiked, and the short orders took some profit first; shortly after, the price rebounded, and the long orders also took profit. I made profits from both positions in one day and treated my friends to dinner that night. They all said my operation was very precise.
Accept small losses and pursue a large profit-to-loss ratio.
Many beginners often ask me about my 'win rate.' I tell them directly: my win rate is actually not high, not much better than flipping a coin, but I can make one win equal to five losses. That’s the core of making money; it’s not about how many times you guess right, but how much you earn when you guess right.
Set three bottom lines for beginners, and remembering these can at least help you avoid losing 80%.
Divide funds into multiple portions, use a small portion at most in a single transaction, and never hold more than three positions at a time. Don’t put all your eggs in one basket.
If you lose two trades in a row, stop immediately; going for a walk or resting is better than forcing a 'revenge trade.' I once lost continuously out of stubbornness, and the lesson is still fresh in my mind.
If your account shows significant profits, withdraw a portion. I once withdrew part of my account when it was performing well to invest in stable financial products, and later when the market turned bearish, that money became my reserve for bottom fishing.
Surviving is more important than anything else.
In trading, it's never about who predicts better, but rather who lasts longer. There are always market opportunities, but what’s lacking is the ability to preserve capital until those opportunities arise. Most of my students have managed to achieve stable profits, not because they are smarter, but because they execute basic rules effectively.
Now Xiao Lin has been operating according to these methods for several months, not only resolving his car loan issue but also building some savings. Last week he told me, 'I can sleep soundly now.' In fact, making money in the crypto space is not difficult; what’s hard is whether you can control your hands and preserve your capital.
The market is never short of stars, but it lacks long-lasting players. In this 24/7 operating crypto world, surviving is 100 times more important than making quick money. Establish your own rules and strictly adhere to them, and you can surpass most players.
The most important thing is to stay clear-headed: in a bull market, don’t think of yourself as a god; in a bear market, don’t think of yourself as a bug. The market is always changing, but the principle of protecting capital never changes. Follow me to learn more firsthand information and precise points in the crypto world, and become your own guide in crypto. Learning is your greatest wealth! #加密市场观察 $ETH
