If your capital is within 500,000, and you want to achieve quick success in the cryptocurrency world through short-term trading, please read this post carefully. After reading, you will have a sudden realization about the essence of short-term trading!
After so many years of trading cryptocurrencies, we've experienced five stages together!
1. Ignorant and reckless stage;
2. Continuing education stage;
3. Exploration stage;
4. Formation stage;
5. Initial success stage.
If you want to take trading cryptocurrencies as a second source of income, want to get a share in the cryptocurrency world, and are willing to spend time growing and learning, then don't miss this article. Read it carefully; every point is the essence of the cryptocurrency world. It can be said that whether in a bull market or a bear market, these 10 iron rules can help you! I will also share my ten years of trading experience later!
I’m not smart, but I can execute.
You guys are trading coins, studying K-lines, monitoring on-chain data, observing big players' movements, learning technical analysis...
I don’t understand anything, I just use one method: buy low in sideways markets, sell high when it surges.
It's so 'stupid' that I've never gone all in.
My simple three-step method:
Only trade coins that have been sideways for over 10 days
Don’t choose hot coins; don’t chase the news. I specifically look for those coins that no one mentions, that are moving sideways, not rising or falling.
Why? Because there’s a rule in the coin market: what rises will fall, what falls will rise, and what has been sideways for too long is very likely to have someone planning a big move.
Only enter one trade, buy it and let it sit there
Do not average down, do not increase positions. Just wait. Usually, I watch a coin that is sideways for about 10 days before buying, set my stop loss, and then let it sit.
I call this planting crops.
Only sell when it rises more than 30%.
I don’t wait for the highest point, nor do I get greedy. As long as the accumulated rise reaches 30%, I sell and look for the next sideways one.
Many people face margin calls because they 'want to earn more', but I take my profits when I see them.
Why can 99% of people not do this?
Because it's too slow, everyone is eager to get rich quickly.
Because no one wants to stare at sideways trading like a fool.
Because it's too simple, everyone is pursuing advanced technology
Because no one can stand to leave it alone
But honestly, those who make big money in the crypto world rely on execution rather than intelligence.
The 16 money-making experiences summarized over the years of trading coins!
❶ Choose altcoins in a bull market, buy mainstream coins like BTC and ETH in a bear market; it's best to only trade Bitcoin and Ethereum.
❷ For coins in an uptrend, the best time to buy is when it pulls back to key support; keep an eye on the market and seize opportunities.
(Pay attention to live support; once broken, immediately stop loss and wait for the next position.)
❸ Position control must be good; never go all in, leave yourself some room to adapt to market changes.
❹ Initially, trade frequently in small positions, then hold back and go heavy later; making a few big trades correctly in a year is enough.
❺ News can only serve as a reference; by the time you receive this news, it has already become ineffective.
❻ Download JIN10 data, check the calendar for red, U.S. five-star data, non-farm payrolls, Federal Reserve CPI, PCE; these cause severe fluctuations in both the crypto market and U.S. stocks.
❼ For loss-making junk coins, don’t average down. Timely stop-loss is the wise choice. I personally do not recommend small coins. Hundredfold or thousandfold gains were only possible in the past when there were fewer coins, making it possible for a certain coin to gain a hundred or thousand times. Now there are too many coins, and no one knows which one will be the next hundredfold or thousandfold.
❽ Don't let market emotions sway you; stay calm and rational to make the right decisions!
❾ Don't touch unfamiliar coins; focus on the lanes you are familiar with, so you can win steadily!
❿ When most people are optimistic, it is often when the risks arise; remember this and don't let yourself become the one left holding the bag!
⓫ When altcoins rise significantly, they will definitely fall; when they fall significantly, they may not necessarily rise. Choosing is very important; you must keep your eyes open!
⓬ Learn to stay out of the market and wait for clear signals before entering; this can help you avoid unnecessary losses!
⓭ Don't follow the hype; trends in the coin market often come quickly and leave just as fast, so don’t let yourself get stuck!
⓮ Trading requires having your own trading system and strictly executing it to maintain stable profits!
⓯ Investment is a long-distance race; maintaining a good mindset is key to laughing to the end. Don't let yourself give up halfway!
⓰ Investment does not necessarily mean making money, and there is a high probability of losing money. Therefore, try to invest with spare money. Investing with spare money will lead to a better mindset, increasing the chances of winning. Remember this and don't let yourself fall into trouble because of investments!
Strict stop-loss; holding must be avoided, either reduce leverage or lower your entry.
Every consistently profitable trader has these 8 'hardcore habits' behind them.
What does it take to become a successful trader? Over the past eight years, we have witnessed the growth and progress of numerous traders, as well as the ups and downs of many traders. But we also found that those who made significant progress among traders have many similarities. For this reason, we have compiled eight steps for trader growth to help you continuously improve your trading level and ultimately achieve stable profitability.
1. Choose your trading market
The first thing to do is to choose the market you want to trade. Do you want to trade forex, stocks, futures, or cryptocurrencies? Each market has its own pros and cons; there is no 'better' market; it depends on your personal preference.
But you must also consider whether the chosen market suits your lifestyle. For instance, if you have a demanding daytime job and cannot check charts or manage trades during the day, then trading stocks in your country may not be realistic, as the stock market usually only operates from 9 AM to 5 PM. The forex and futures markets are generally open around the clock (with some exceptions), so they may be more suitable for your flexibility.
For example, you can trade international currency pairs or commodity futures after work; or choose a medium to long-term trading method (swing trading), so you don’t need to watch the charts all day, just spending a few minutes each day checking your positions is enough.
Taking this first step correctly is crucial because it determines whether you can efficiently monitor the market and manage trades later.
2. Find a trading strategy
Next, you need a trading strategy. Search for 'trading strategy' on Google or Baidu, and you will see thousands of results - so how do you filter out the ones that are suitable for you?
What aspects should be considered when choosing a trading strategy? In the first 9 to 18 months of your trading, you need to try different types of strategies to build your understanding of market rhythms, timing, and position management.
I suggest you try a new trading strategy every 3 to 4 months so that you have enough time to understand and practice each method. After trying 3 to 6 strategies, you will have a rough sense of which style suits you best.
At this stage, your goal is not to find the most profitable strategy, but to understand what type of trader you are and which analysis methods and trading logic align best with your thinking pattern.
In addition, a 'complete' trading strategy should include all of the following:
Entry rules
Stop-loss and take-profit rules
Exit rules
Position management rules
Risk management principles
Many beginners only focus on formulating 'entry signals' while neglecting other equally critical parts of trading. As a result, once they enter the market, they do not know how to manage positions or respond to price fluctuations, ultimately losing and exiting, mistakenly attributing their failure to the inefficacy of entry signals while being unaware of many other critical factors that were overlooked.
3. Don't stay in the 'learning phase' all the time
One day, you will need to stop endlessly trying and choose a trading strategy to truly stick to. You must realize that a profitable trading strategy is not one that makes you profit right away, but one that requires continuous practice and adjustment to gradually align with the kinds of products you are trading. Moreover, you must also grow into a trader who can strictly execute the strategy without being swayed by emotions.
At the beginning, you will find that even if you already have a 'complete and clear trading rule set', you still cannot execute it as planned. This is completely normal! Becoming a mature trader is a gradual process.
At this stage, it’s easy to want to give up your current strategy and seek new methods after a few consecutive losses. You must resist this impulse because in 99% of cases, what really needs to change is not the strategy but yourself. This may sound counterintuitive, but the next section will delve into this issue.
Over the years, we have worked with thousands of traders and repeatedly observed a commonality: many people struggle to accept the reality that 'even a profitable system can experience frequent losses.' Once they encounter consecutive losses, they tend to change strategies, fantasizing that they can find a 'perfect system that won't lose.' But in reality, the sooner you accept the fact that 'there is no perfect strategy,' the better it is for your trading growth.
4. Learn from mistakes
Regularly reviewing trades has two important purposes:
First, most traders will find that their losses are self-inflicted. In other words, losses often occur because they did not follow the trading rules.
Of course, sometimes you can follow the rules exactly, and trading still fails; but in the early stages, many of the fundamental reasons for losses are actually because you broke the rules. This is actually 'good news' because it means you do not need to change strategies immediately; instead, you should adjust yourself, establish better emotional coping mechanisms, and improve execution discipline.
I suggest you review each recent trade one by one, checking if you did something wrong or if you could have made a better decision. Additionally, regular reviews can also uncover issues with the strategy itself.
Recently, I had a conversation with a student who said, 'Most of the trading directions are correct, but 90% of the time, the price hits the stop loss first, and then moves in the expected direction.' This situation likely indicates that his stop loss was set too tightly. If he could allow more volatility in trading, he might turn some losses into profits.
Such insights can only be discovered through review and are extremely valuable. Unfortunately, most traders do not review regularly, so they can never learn from their mistakes. There are now many excellent review tools available, such as our developed Edgewonk.com trading journal system, which can help you efficiently complete the review process and continuously optimize trading performance.
5. Backtesting - Accelerate your learning process
In addition to maintaining a trading journal, backtesting is another important method that can significantly accelerate a trader's learning speed. Backtesting refers to traders looking back at historical price data and finding trading opportunities based on their own trading rules. Its goal is to assess how the trading strategy and its specific rules would perform in past markets.
Through backtesting, traders can gain numerous valuable insights.
For example:
What is the historical win rate of the strategy?
How many trading signals does the strategy generate on average per month/week?
What is the optimal profit-loss ratio?
More importantly, backtesting can significantly enhance a trader's pattern recognition ability. Most traders rely on technical analysis, price action, and chart patterns to trade, and in the initial learning stages, their pattern recognition ability is usually quite weak. However, by reviewing historical charts extensively and simulating dozens or even hundreds of trades, you will encounter various patterns and price structures. This repetitive training will help you identify quality trading opportunities more efficiently in live trading.
Overall, the more backtesting, the better. I strongly recommend you schedule as much time for backtesting as possible. Even if you only use 30 minutes of 'downtime' each day for a backtesting practice, it can greatly accumulate knowledge and experience.
6. When to start live trading
'Live trading' refers to starting to trade using real funds. In the first few months, most traders will practice using so-called 'simulated accounts,' which use virtual funds to trade in real market conditions.
Next, almost everyone will face a question: when is the best time to transition from simulated trading to live trading?
Unfortunately, there is no absolute correct answer to this question.
However, there are a few basic requirements that you must meet: before entering live trading, you should have a thorough understanding of your trading strategy and have verified through historical data backtesting that the strategy has profit potential in the past.
But even so, this set of rules cannot guarantee continued profitability in the future.
Today, with the emergence of more and more 'funding companies,' traders can also choose to participate in these companies' funding challenge programs as a way to enter live trading.
The advantage of this model is that traders do not need to use their own funds for live trading; at the same time, they must adhere to a series of strict risk control rules established by the funding company.
For beginners, this is a very practical training method because it forces you to learn and implement conservative risk management measures, which is very helpful for your future path to professional trading.
7. Expectation management and risk control
Most traders, when starting out, often believe that trading is a way to make big money in a short time. Although reality usually quickly wakes them up, many start to realize that 'wanting to make stable profits' is far from easy, yet many traders cannot let go of the fantasy of 'getting rich overnight' and continue to 'gamble'. In order to make big money, they often take on excessive risks.
However, high risk often does not bring high returns, but rather leads to margin calls and approaching liquidation lines, ultimately resulting in significant losses. Therefore, during the early stages of your trading career, it is essential to strictly practice risk management, especially position control. Usually, many trading books and experienced traders will recommend a basic rule - 'Never risk more than 1% of your total account balance on a single trade.' This rule is very practical because it effectively prevents emotional trading caused by a single large loss, thereby avoiding a vicious cycle of consecutive losses.
However, many new traders encounter another problem: their account funds are too small. According to the '1% rule', even if a trade can yield a profit of 3%-4%, the amount is still very limited, making it difficult for them to take trading seriously. In this case, participating in a trading fund challenge program might be a better option. Funding companies typically set strict risk management rules to force traders to execute standardized position control.
Instead of opening a small account with $300 or $500, it is better to spend $100 to sign up for the most basic funding challenge program. The discipline required in the challenge can help you develop stable trading habits and reduce risks.
8. How to keep your trading account growing continuously
Trading is a game of patience. Traders need patience while waiting for trading opportunities, patience to hold quality positions to maximize profits, and the growth of the account is a long-term test of patience.
Once you have determined your trading strategy and verified through backtesting that these rules have profit potential in history, and start recording trades to learn from mistakes while practicing sound risk management - that’s when the real 'refinement' begins.
Trading is a long-term career. The saying 'Rome wasn't built in a day' is particularly apt in trading. Initially, when you're not a full-time trader and still have a daily job, you actually have some valuable advantages. First, you have almost no pressure to earn a living from trading; your daily job can cover the bills, allowing you to trade with a more relaxed mindset. At the same time, you can regularly inject funds into your trading account, gradually expanding the account size. But the premise is - you must have been continuously profitable for several months or even longer and prove that your strategy has long-term sustainability.
You must realize that accumulating capital is a long-term process. Even if you use a reasonable position management strategy, it takes time for your account to grow steadily. Many traders collapse at this stage because they are too eager for quick results, wanting to achieve excessively high returns in a short time. However, the market will not cooperate with your artificially set growth goals; the more you force it, the more likely it is to backfire. Even if you need to spend five years or even longer to achieve your goals, as long as the method is correct, the result is still worthwhile - because any shortcut will ultimately not lead to the endpoint of success.
Recognize what money you are making
1. The essence of market competition
Trading coins is essentially a monetization of cognition.
Your profit comes from surpassing the judgments of other participants.
When you buy Bitcoin at $30,000, you are actually taking over from sellers who believe 'Bitcoin is not worth this price'; when you sell at $50,000, you are selling to buyers who think 'Bitcoin will rise further.'
This market has no warmth, only naked competition.
Understanding this, you will realize that trading coins is not a social event, but a war that requires full commitment.
2. Bitcoin vs Stablecoin: Completely different profit logic
Understanding the logic of these two assets is the first step to success.
1) The profit logic of Bitcoin: profits from price fluctuations
The core profit model of Bitcoin is capital gains.
Its value comes from scarcity (a total of 21 million coins), decentralization characteristics, and global consensus. When you buy low and sell high, you profit from price differences.
The essence of this profit is:
Market sentiment premium: Emotion drives price increases
Value discovery profit: Value re-evaluation as recognition increases
Inflation hedging profit: The value preservation function relative to fiat currency
2) The profit logic of stablecoins: the time value of money
Stablecoins (like USDT, USDC) have their value pegged to fiat currency, and their prices are generally stable.
Its profit does not come from price fluctuations, but from:
Interest: Fixed income through lending and financial management
Liquidity mining earnings: Providing liquidity to earn a share of transaction fees
Arbitrage: Utilizing interest rate differences between different platforms
In simple terms, Bitcoin profits from 'price differences', while stablecoins profit from 'interest differences'.
3. The four pillars of value support
The value of cryptocurrencies comes from four dimensions:
Consensus value: More and more people recognize its value
Use value: Play a role in practical application scenarios
Speculative value: Expected returns from buying low and selling high
Hedging value: A tool to combat fiat currency inflation
4. Information asymmetry: the invisible weapon
In this market, information is money.
Institutions often get news ahead of retail traders and profit from information asymmetry. This is why you often see the phenomenon of 'good news leading to selling, bad news leading to accumulation.'
As a retail trader, you need to hone your ability to identify genuine value information.
The art of fund management
It is recommended to adopt the '333 principle':
30% invest in Bitcoin and other mainstream coins
30% for stablecoin financial management
30% kept as reserve funds, waiting for opportunities
10% for exploring emerging projects
Remember: Never put all your eggs in one basket.
