Don't rush to go All in! This is the first letter I wrote to newcomers in the crypto world.
If you're planning to buy cryptocurrency for the first time or just opened an exchange account, this article can at least help you pay a little less tuition.
1. Why are we attracted to the crypto world? 🤩
To be honest, most people are drawn to the crypto world for two reasons:
Hearing that others made big money: “So-and-so bought a car with Dogecoin” “So-and-so caught a new coin and multiplied their investment by several times”;
Unwillingness: Missed out on the stock market, missed out on real estate, can't understand AI, just feel that — I can't miss this wave again.
But before you actually click 'buy', it's worth asking yourself three questions:
Am I here to take a gamble, or do I want to learn seriously and participate long-term?
If I lose this money, can I still sleep well?
Am I mentally prepared: the crypto circle is not a 'get rich quick tutorial', but a 'risk management class'?
If after asking these three questions, you still decide to come in, the content at the end of this article is what I hope you see from the beginning.
Second, first understand: what exactly are we buying in the crypto circle? 🤔
Don't rush to look at various complicated terms, first clarify the three most basic concepts.
1. Bitcoin: digital gold 🏆
A total of 21 million, cannot be casually increased;
Not belonging to any country or company, maintained by all network nodes together;
Many people regard it as an anti-inflation asset, similar to 'digital gold'.
You can understand it as:
It represents a way of storing value that is 'a bit different from the existing financial system'.
2. Ethereum: the 'operating system' on the chain 💻
If Bitcoin is more like 'digital gold', then Ethereum is more like the operating system of the blockchain world:
Smart contracts can be deployed on it;
You can issue various tokens, do DeFi, NFT, blockchain games, and various applications.
Just like phones have iOS / Android, the on-chain world has Ethereum and other public chains.
3. Various other coins: stories + emotions + risks ⚠️
Besides BTC / ETH, there are:
Public chain types: Solana, TON, etc., wanting to create their own 'underlying system';
Platform coins: the coins of major exchanges;
Meme (emoticon) coins: Dogecoin, PEPE, etc., highly emotional + speculative;
Air coins: no product, no technology, only big promises and pump stories.
The most typical pitfall for beginners: not starting with mainstream assets like BTC/ETH, but beginning to buy a 'small coin' that they can't even clearly name—because it has soared, everyone in the group is hyping it up, and the blogger keeps saying 'it will take off soon'. Making this mistake can easily derail the entire rhythm later.
Three, my first entry: a crash course costing 4,000 yuan (personal story) 📖
The following paragraph will tell you about my 'first entry' experience in the first person, and you can look at it as a small case study.
1. Everything begins with a screenshot 📸
That was a few years ago, a friend shared a screenshot in the group: account profit +300%, with several lines of green profit records below.
He only said one sentence:
'Brothers, the opportunity of the era has come.'
At that moment, I felt very real: all the missed opportunities in the past seemed to be laughing at me.
2. It takes a few minutes to open an account, and just a few seconds to buy ⚡
I downloaded the exchange app on my phone;
Quickly complete KYC using ID + facial recognition;
Not even understanding the basic differences between spot / contracts, just charging into the 'increase list'.
That day, the number one was a coin I had never heard of before, with a 24-hour increase of +70%, and the K-line was almost vertical.
My thoughts at the time were very simple:
'So fierce, it shows the market has vision, I just need to get on board.'
So, I bought in at a price point that was completely unplanned, using nearly half of my balance.
3. Real-time experience of buying at high positions: roller coaster + emotional breakdown 🎢
Shortly after buying:
The price surged again by 10%, I felt like I was the chosen one;
Then all the way down from +10% to -5%, then to -15%.
I began various self-comforting:
'Wait a bit, it will definitely bounce back';
'This is just a washout';
'The dealer is scaring off retail investors, I can't fall for it.'
As a result, that night before bed, I was already down nearly 30%. I stared at that string of red numbers and suddenly realized: I had no idea at what price point I should admit defeat.
4. Joining groups, finding 'teachers', adding positions, who is really harvesting whom? 🕵️
The next day, I found a so-called 'professional community' on social media:
The group fee is not expensive, a few hundred yuan;
The group announcement says 'Institutional trading experience', 'Stable profit strategies', 'No panic in following trades'.
After joining the group, the rhythm is basically like this:
'Teacher' sends a chart:
'Dipping here is a great entry point, suggest adding positions';Also add:
'This group only shares personal learning records and does not constitute investment advice.'
So I really did it— the more it fell, the cheaper it seemed, and the more I wanted to add positions.
Until one day, I opened my account and saw that I was down close to 50% overall, the feeling was:
Not 'being educated by the market', but truly realizing—I have no ability to protect myself in this market.
That trade calculated out to about 4,000 yuan lost from deposit to final cutoff.
For many people, this may not be a huge amount, but for me at that time, it was a very clear lesson in tuition:
Projects that you do not understand and blindly buy based on emotions are likely giving someone else an opportunity;
Without a plan and stop loss, only daring to 'grit your teeth', often what you are enduring is not the bottom, but despair;
Outsourcing judgment to so-called 'teachers' and groups, you are losing without understanding why.
Later, I slowly broke down that experience and truly understood—the biggest problem in the crypto circle is not volatility, but how fragile you are in the face of volatility.
You may be preparing to make your first purchase, and I hope that when you see this section, you can take fewer detours.
Four, the three stages for beginners: see which level you are at 📊
Stage 1: Blind buying phase 🤯
Characteristics:
Whoever is at the top of the increase list, buy that one;
The blogger says 'insider information' and 'it will explode', and you immediately follow up;
Completely unaware of why you bought, and not knowing when to sell.
Stage 2: Information overload phase 🤯
Characteristics:
Start looking at K-lines, learning indicators, and watching a bunch of analyses from Zhihu / Bilibili / Twitter;
Drawing various support and resistance, moving averages, and patterns;
One moment believing in this 'master', and the next moment believing in another 'logic'.
At this time, the biggest problem is: there is a lot of information, but no personal methodology.
Stage 3: Action phase with your own system 🧠
Characteristics:
Understand whether you are a short-term speculator, a swing trader, or a long-term holder;
Every single trade has: entry reason, stop loss position, expected target;
No longer change all positions because of one sentence from a blogger.
Many people spend their lives hopping back and forth between 1 and 2, and those who can stabilize at the 3rd stage are actually quite rare.
Five, 7 bottom lines for crypto novices (strongly recommended to save) 🌟
1. Only invest money you can afford to lose 💰
Do not borrow money;
Do not touch rent, tuition, living expenses;
Do not stake everything without the family being fully aware.
In one sentence:
The money that would not affect your basic life if you lost it is the chips you can bet.
2. First learn to diversify, then consider heavy positions 📦
Do not ask right away:
'Should I go all in on a certain coin?'
The correct order should be:
First set a maximum acceptable loss, such as 20%–30% of total capital;
Then split the capital available for trading into 3 to 5 parts, entering at different times, not investing all at once.
Many people do not lose because 'the direction is wrong', but because they started by putting too much weight on the chips.
3. Do not touch projects you do not understand 🚫
Ask yourself four questions:
What problem is this project actually solving?
Are there real products, users, and data?
Is the team open and transparent? What is their background?
If you do not consider 'someone taking over', does this coin itself still have value?
If you can't even clearly explain what it does, then you are most likely just lifting others.
4. Be cautious with various groups and 'teachers' 🤺
Any appearance of these keywords defaults to high risk:
'Insider information', 'institutional channels', 'friends of the dealer';
'Trading teachers', 'sure profit', 'follow this wave and you'll turn around'.
You can join the group to learn ideas, but please remember:
Trading passwords, mnemonic phrases, no one can ask for them;
Do not transfer money to unknown platforms;
Don't change your position structure just because someone says 'charge'.
Truly capable traders rarely have the time to help strangers make money for free every day.
5. Treat 'stop loss' as a rigid discipline 🛡️
Stop loss is not shameful, but you are being responsible for yourself.
Before placing an order, think clearly: at what price point will I admit I'm wrong?
For example –5%, –8%, –10%, write it down on paper or in a memo;
Once triggered, execute it, instead of temporarily looking for reasons to 'wait a bit'.
You will find that without a stop loss, you lose the outcome; with a stop loss, you lose a judgment. These are two completely different things.
6. Do not bet your 'financial freedom' on a single all-in 🎯
The crypto world does have stories of getting rich, but what you see are all survivors.
In the last bull market, many people had millions on paper;
But because they did not take profits or manage risks, after a big drop, they returned to the starting point or even lower.
Truly capable people are not those who earn the most in one time but those who can still steadily survive at the table after experiencing many rounds of bull and bear markets.
7. Treat 'learning ability' as your greatest moat 📚
You can learn progressively:
Basic concepts: Bitcoin, Ethereum, stablecoins, public chains, Layer 2, DeFi, etc.;
Basic trading: spot vs contracts, what is leverage, how does liquidation happen;
Risk control: diversification, stop loss and take profit, position management;
Simple technical analysis: trends, support and resistance, trading volume, common indicators.
The more you learn, the less unnecessary money you will lose in the future in this market.
Six, self-checklist for entering the market (suggest to copy for backup) ✅
Before actually making the first purchase, it’s good to do a small check for yourself:
I am well aware: the crypto circle is a high-risk market, losing money is the norm.
Even if I lose this money, it will not affect my basic life.
I know whether I want to try short-term or lay out long-term.
I set a maximum position ratio for myself (for example: 30% of total capital).
For every single trade, I can write out: entry reason / stop loss price / target price / expected holding time.
I will not completely hand over decision-making to a 'teacher' or 'group'.
I am willing to spend time learning, rather than just wanting to find a 'sure win formula'.
If you can check off most of these, you have more protective measures than the vast majority of impulsive entrants.
Seven, in conclusion: do not take the crypto circle as your only hope 🌈
The crypto world can be a place of opportunity, but it is definitely not the only way out.
There are many paths in life that can change:
Enhancement of professional abilities;
Stable long-term investment;
Entrepreneurship, doing side jobs;
Upgrading your mindset and cognition.
If you choose to enter the crypto circle, I sincerely hope you come in with a clear mind, learning while doing, and a willingness to admit mistakes, rather than being pushed in by FOMO.
If this article can make you buy one less order or lose a little less in a moment of impulse, then its mission is accomplished.
If you are a crypto novice, you can leave a comment: 'What day am I in for entry' or 'I am undecided about whether to enter'. If I get the chance, I will write another piece: learning to set up a simple 'risk control system' from scratch.
