When I first entered the crypto world, I was purely a "newbie fighter"—unable to distinguish between mainstream coins and altcoins, fixated only on the hype of "skyrocketing" and "doubling". I heard that dog coins could make one rich overnight, so I jumped in with 5000 bucks, only to find myself standing guard at the top of the mountain; when LUNA crashed, I foolishly tried to "buy the dip", and the more I bought, the worse it got, until I lost almost all of my tens of thousands in capital, and during that time, I didn't even have the courage to open my trading software.
After stepping through all the novice pitfalls, I finally grasped the essence of crypto trading: there is never a "holy grail" for easy earnings in this industry; discipline is more important than skills, and staying alive is more crucial than making money. Today, I want to share the hard-earned experiences with everyone, whether you're a newbie just entering the market or an old trader who has been scared by losses, following this advice can help you avoid at least 80% of the pitfalls!
1. Capital is life! Follow these 3 iron rules, and you will beat 80% of people.
The most common mistake beginners make is treating crypto trading as a 'gamble'. They go all in with heavy positions or borrow money to enter the market, ultimately pushing themselves into a corner. After suffering losses, I established 3 iron rules that I have never broken since.
Only use money you can afford to lose: For example, with a monthly salary of 8000, invest a maximum of 800 each month. Even if you lose it all, it won't affect your life. Never touch any leverage or loans.
Mandatory stop losses without hesitation: In short-term trading, if it drops below the 5-day moving average or the 20-day moving average in mid-term trading, regardless of how reluctant you are, exit immediately. Losses on a single asset should never exceed 5%; never hold on stubbornly.
Position allocation is the bottom line: 30% of funds should be allocated to high-quality value coins for long-term holding, 50% for swing trading to make profits, and 20% as spare cash. Even in the face of sudden market changes, you will have room to maneuver.
2. Go with the trend! Stop 'picking bottoms'; the trend is your friend.
In the early years, I always wanted to 'buy at the lowest point', but I ended up buying at halfway up the hill each time, getting trapped more and more. Later, I realized that in the crypto market, going against the trend is just fighting against money!
Don't blindly enter a downtrend: Even if a coin drops 90%, it could drop another 90%. Without clear signs of an upward trend (like a significant breakout above key resistance), don't reach out.
In a rising market, seize the pullbacks: For truly strong assets, pullbacks are opportunities to get in. Compared to chasing highs, buying on pullbacks carries lower risks and higher reward ratios.
Trading volume is a touchstone: A breakout with volume at low levels is reliable, indicating that funds are entering; if it’s just a volume-less rise, it’s likely an 'induction', so be cautious of potential pullbacks.
3. Technical indicators should be quality over quantity! 3 indicators are sufficient; having more will only create confusion.
Many beginners like to fill their screens with various indicators, using MACD, RSI, KDJ, and end up getting confused by the data. In fact, technical analysis doesn't need to be complicated; just grasp 3 core concepts.
Find buy and sell points with 15-minute K-line: For short-term trading, look at the 15-minute chart, use the average price line to determine entry timing, and avoid being misled by intraday fluctuations.
Daily MACD sets the direction: A golden cross in the daily MACD indicates a strengthening trend, while a death cross suggests a weakening trend. Follow the larger direction, and your win rate will naturally increase.
Weekly Bollinger Bands look for support: The middle line of the weekly Bollinger Bands is an important support level. As long as it is not broken, the medium to long-term trend remains intact. If it breaks, reduce positions decisively.
Here’s the focus: Only when the 15-minute K-line, daily MACD, and weekly Bollinger Bands all resonate, along with increased trading volume, will the success rate of entry be highest. Never trust a single indicator signal too easily!
4. Choose the right tools! Avoid detours; these 4 tools have helped me increase my win rate by 30%.
Beginners shouldn't rely solely on 'feel' for trading; using good tools can help you avoid many pitfalls. I want to share 4 practical tools that I have been using.
Use TradingView for market analysis: Drawing support and resistance levels and viewing K-line patterns are super convenient, and the custom indicator feature can meet different trading needs.
Stay updated on macro information with Jin10 data: Timely understanding of global policy dynamics and market hotspots can help avoid pitfalls due to information gaps.
Check fund movement with Glassnode: Use on-chain data to observe the inflow and outflow of main funds, and determine whether the market is genuinely rising or just 'inducing' others.
Use TokenSniffer to prevent scams: When encountering unknown niche coins, check the contract's security first to avoid falling for 'rug pulls' (when project teams disappear).
Lastly, let me say something heartfelt:
There has never been a myth in the crypto world of 'turning thousands into a fortune'; those who tell you about 'easy money' or 'doubling' are either scammers or shills. I went from losing 5000 to barely having any left, and now I can make stable profits, relying not on luck, but on the discipline to protect my capital, being clear-headed in following the trend, and continuously learning.
If you are still chasing prices and blindly picking bottoms, it might be better to stop and review: Do you really understand the coins you are buying? What are your stop-loss and position plans? If you have none, it’s better to calm down and learn instead of treating your hard-earned money as 'tuition' for the market.
I will continue sharing practical skills for crypto trading, quality coin analysis, and tips to avoid scams. Follow me, and I'll help you navigate the crypto world with fewer pitfalls and steady profits! What pitfalls have you encountered in the crypto space? Let's chat in the comments and help each other avoid them.
