In the cryptocurrency market, most investors fail not because of a lack of opportunities, but because they turn trading into a 'gamble'. Behaviors such as chasing peaks – taking profits too early – cutting losses too late – going all-in based on emotions prevent them from surviving even one market cycle.
The reality is: to make money, you must first learn how not to lose money. Risk management is many times more important than searching for high-stakes bets.
1. Capital management method: The foundation of every strategy
• Split capital to 'test safely'
All capital should be divided into 5 equal parts. Each time entering a trade, only use 1 part to test the trend. Even if the trend seems 'certain to win', absolutely do not go all-in.
• Discipline in cutting losses: Do not let one trade destroy the entire account
Each trade allows a maximum loss of 10%.
This means that the actual risk only accounts for2% of total assets.
Even if you fail 5 times in a row, the account remains almost intact, not knocked down.
• Take profits according to trends, not emotions
No need to set rigid profit-taking levels, but should only take profits when they exceed 10% to avoid being wiped out by the market's 'turning back'.
Common mistakes:
A 3% profit means → self-strangling profit margin
A loss of 15–20% means holding on to hope → turning small losses into large losses
Trading like that is no different from 'offering money to the market'.
2. Increase the win rate by trading with the trend
90% of beginners lose money because they are eager to 'catch the bottom' in a downtrend. The rebounds in a downtrend look very attractive but are mostly just traps to lure in new money to provide liquidity for sellers.
The right principle:
Low-buy not Bottom-buy
'Catching the bottom' is groping in the dark, depending on luck.
'Low-buy' is waiting for trend confirmation and then buying during corrections – much safer and more effective.Uptrend: buy when the price rebounds
Downtrend: stand aside
Like climbing a mountain: take a break to regain strength, then continue climbing — uptrend operates like that.
3. Stay away from assets that have just surged sharply
Assets that have surged many times in a short period are often prices pushed up for distribution.
Typical signs:
Price rises sharply but trading volume is unusual
Pulling a few strong green candles then keeping the price stagnant
Media constantly releasing good news
During these times, new buyers often become 'the ones carrying the goods' for institutions. Very few escape this model with profits.
4. Three simple technical tools but extremely effective
No need for 10–20 confusing indicators. Just 3 tools below are enough to see the cash flow:
• MACD
MACD crosses up (Golden Cross) and surpasses the 0 line → real cash flow enters.
MACD crosses down on the 0 line → trend signal is about to weaken, should reduce positions.
• Trading volume (Volume)
Low → high + price surpassing resistance → large cash flow is really buying.
Volume increases sharply but price remains unchanged → distribution, need to exit the market.
• Average Moving System (MA)
Focus on 4 MA lines:
MA3 – short-term signal
MA30 – medium-term trend
MA84 – find entry points for upward waves
MA120 – determine long-term trends
Only trade those coins that have all 4 MA lines pointing up.
Bad trend → eliminate immediately, do not hesitate.
5. Two 'survival' rules to avoid 80% of accidents in the market
• Absolutely do not average down
Averaging down is the quickest way to bring the account to 0.
A downtrend is not an opportunity — but a warning. If wrong, cut, do not hold.
• After trading, must immediately record and review
Check the reasons for entering the trade
Compare with the actual trend
Record the correct/wrong points
Repeating many times will help increase the win rate naturally and steadily.
Conclusion
In the crypto market, there is no legend of 'overnight x300'. Those who last the longest share 3 common characteristics:
Strict risk management
Trade according to the trend
Control emotions and maintain discipline
The above rules are not high-level secrets but rather a summary from countless failures of hundreds of investors. Those who can apply them will reduce dozens — even hundreds of millions in 'tuition fees' for the market.