I've seen too many friends rush into the crypto market with a capital of 200,000, staring at the charts every day, frequently trading, and at the end of the year, not only did they not make money, but they also lost tens of thousands or even over a hundred thousand. What's even more heartbreaking is that they lose money and still don't know where the problem lies, only daring to silently lurk in the community and watch others showcase their profits. In this article, I'm sharing 10 trading principles that I’ve gained from 5 years of hard-earned experience and real money—no holds barred. As long as you master the execution, you'll also be able to profit steadily in the next market!
1. Don't believe in 'getting rich by going all in'; it's enough to catch a trend once a year. Many beginners feel that a capital of 200,000 is too little and that they can't make big money without going all in, but often they lose more than half of their capital after just one pullback. I made this mistake in my early years too, but later realized that with a capital of 200,000, there's no need to fuss every day. As long as you accurately catch 1-2 major trend opportunities each year, your returns can outperform 90% of retail investors. Remember, the crypto market isn't short on opportunities; what's lacking is the patience to wait for them.
2. First practice on a virtual platform to sharpen your mindset; only when the cost of trial and error is zero should you approach the real market. Mindset is the lifeline of trading; I've seen too many who have learned good skills but end up operating messily in the real market due to greed or fear. Now, when I train newcomers, the first thing I do is let them play on a virtual platform for three months, practicing various trading techniques and stop-loss strategies to cultivate patience. Once they can consistently profit on the virtual platform, then they can approach the real market. Don’t think virtual trading is useless; it’s the lowest-cost way to 'pay tuition.'
When good news is realized, it’s a signal to exit; if the next day opens high, exit immediately. This is a hard rule I learned after losing six figures! In 2021, a popular project had significant good news, and I was holding with a 30% profit, thinking it would rise further. As a result, I didn’t take profits on the day of the good news, and the next day, it opened high and then plummeted, ending up with a loss from 30% profit to a 15% loss before I had to cut my losses. Since then, I’ve set a strict rule: as long as it’s a major good news within expectations, if I don’t take profits on the day, I clear my position the next day regardless of how high it opens, and I never get caught in tail-end trends.
One week before the holiday, ensure to be in cash; don't bet on holiday 'surprises'. The crypto market trades 24/7, but liquidity significantly decreases during holidays, making sudden fluctuations very likely. I've suffered losses three times; there was one time before the Spring Festival when I didn't clear my position, and then a policy change abroad caused a direct 20% drop when I checked back. I couldn't even sell. Now, I stick to my rule: one week before the holiday, regardless of gains or losses, I clear my position and hold cash to spend time with family during the holiday. After the holiday, when the market stabilizes, there will be plenty of opportunities to enter.
Always keep 40% cash for mid- to long-term positions; swing trading is better than holding indefinitely. Many people like to hold full positions in mid- to long-term trades, reluctant to sell when they rise, and lacking funds to average down when they fall. My current strategy is: always keep 40% cash in mid- to long-term holdings, and when my position rises over 20%, I gradually reduce my position and use cash to average down when the price is right. This way, I'm not afraid of missing out, and I have cash to bottom-fish. The profits from swing trading are much higher than holding indefinitely, while also reducing position risks.
For short-term trades, focus only on popular assets; obscure varieties are a waste of time. Short-term trading emphasizes capital efficiency; never touch low-volume, low-volatility obscure assets—monitoring them for half a month may yield no movement. It's better to spend time on popular assets. I once held onto an obscure coin for half a month without any price movement, but then I chased a popular trend and recouped my previous costs in just three days. Short-term trading requires following the flow of capital; go where the action is (but be cautious of the risk of chasing highs).
Remember: a rapid decline must be followed by a rapid rebound; do not wait indefinitely during slow declines. This is an important market rule. Last year, I made a profit using this principle: a certain asset dropped 30% due to short-term negative news. I judged it to be an emotional drop and decisively bottom-fished, resulting in a 25% rebound in three days, and I took profits in time. But if it's a slow decline, such as a daily drop of 2%-3% over one or two weeks, don't wait to break even; it's wiser to stop-loss and exit, as slow declines often indicate deteriorating trends.
Don't stubbornly hold onto a wrong purchase; cut losses directly if over 5%. Stop-loss isn't admitting defeat; it's the last line of defense to protect your principal. When I first entered the market, I would always hope for a rebound after buying the wrong asset, but I ended up deeper in the hole. Once, I held from a 5% loss to a 30% loss before I had to cut my position. Later, I set a rule: no matter the asset, if losses exceed 5%, I cut losses immediately without hesitation. Now, I rarely suffer large losses because I protected my principal, allowing more opportunities to earn it back.
For short-term trading, just looking at 15-minute candlesticks + KDJ is enough; it's about precision, not quantity in indicators. Beginners often like to pile on various indicators, using MACD, RSI, Bollinger Bands, and more, which can lead to confusion and frequent missed opportunities or stop-losses. I made this mistake early on, but later streamlined my indicators to just 15-minute candlesticks + KDJ, and my accuracy doubled. In fact, trading skills don't need to be numerous; mastering one or two techniques that suit you is sufficient. Doing the simple methods to perfection is more effective than learning a bunch of complex indicators.
Making money in crypto trading is about respect and control, not quick cash. The core of this is: the crypto market is not a casino; to make money here long-term, it's not about luck but respect for the market and control over oneself. The above ten points seem simple, but very few can truly achieve 'not greedy, not panicked, not acting blindly.' Many people rush for a million-dollar goal but forget that the market is always there; preserving principal and maintaining discipline is more important than catching ten small trends.
