Stop! Don't click the trade button! Especially you who just entered the crypto circle with $500 to $1000, immediately take your finger away. Spend 10 minutes reading this article, it's 100 times more reliable than gambling on K-lines in the middle of the night to double your money!
In my eighth year of cryptocurrency trading, I still have dozens of chat records with the 'Zero Brothers' on my phone. There was a guy who, when he just entered the circle, patted his chest and said, 'Wealth lies in danger,' and he threw all his $500 into a coin he had never even heard of. For three consecutive days at three in the morning, he sent me K-line screenshots asking, 'Should I sell?' On the fourth day, the project team directly 'ran away,' and his account balance was even less than his breakfast money; there was also a girl who was even more ridiculous, switching between four different tracks in three days, chasing the metaverse today and rushing into the AI chain tomorrow, having paid a few hundred in transaction fees, and in the end, she lost more than her principal, crying and saying, 'I might as well save it in Yu'e Bao.'
I'm not trying to rain on your parade; the crypto space has never been a 'gambling house for big and small.' For small capital to succeed, it's not luck but rules that matter. Those who have turned a few hundred dollars into tens of thousands have engraved these three rules into their trading software. Newcomers can avoid at least 80% of the pitfalls by following them.
First rule: 'Don't put all your eggs in one basket, but don't hang them all over your body either.' Position sizing is a fundamental rule.
A common problem for many newcomers is 'either going all-in or watching empty-handed,' treating trading like a roller coaster. I made that mistake when I first entered the field in 2018, betting all $2,000 on a mainstream coin and losing 70% due to a black swan event. I survived on instant noodles for half a month to recover. Later, I summarized the '235 rule': 20% of funds should be allocated to stable assets as a base, 30% to potential varieties with recent application scenarios, and 50% kept as reserve funds. For example, if you have $1,000, allocate $200 to buy a mainstream coin you are bullish on long-term, $300 for new projects with real applications, and leave the remaining $500 untouched—this way, even if you encounter sudden fluctuations, you still have funds to average down, preventing you from being kicked out.
Second rule: 'Don't be greedy when you profit, and don't bear losses.' Stop-loss and take-profit should be more precise than an alarm clock.
This is the most easily overlooked and also the most fatal rule I've ever seen. Last year, a fan shared with me that a certain cryptocurrency made a 20% profit. I told him to quickly sell half, but he said, 'Just wait a bit longer, it will definitely double.' As a result, three days later, it dropped by 30%, and all the profits were gone, leaving him with a loss of principal. My approach is to set a 'life and death line' in advance, with the take-profit point set at 15%-20% and the stop-loss point never exceeding 8%. It's like wearing a seatbelt while driving; it feels troublesome at ordinary times, but it can save your life in an emergency. Newcomers must learn to use the automatic stop-loss and take-profit functions of trading software. Set it up and close the software; don't stare at the candlestick charts and compete with yourself—the market won't take it easy on you just because you're staying up late.
Third rule: 'Listen less to gossip and read more books.' The ability to discern information is more important than funds.
In the crypto world, there are more 'insider news' than there are hairs on a cow, with 90% being schemes to cut the leeks, such as 'big shots heavily investing' and 'institutions entering the market.' I once saw someone in a certain community share an 'internal screenshot' claiming that a certain cryptocurrency was going to skyrocket, and I almost followed the trend to buy. Fortunately, I checked the project's white paper in advance and found that the team information was fake, allowing me to avoid a disaster. Newcomers must remember: official white papers, project progress, and team background are the reliable sources of information; those shouting 'get on board quickly' in communities are either shills or newbies. Spending half an hour each day reading industry news is more useful than sitting in ten 'insider groups.'
To be honest, crypto trading has never been the myth of 'getting rich overnight,' but rather a practice of 'slowly becoming rich.' I turned $500 into $18,000 over three years, and none of it was based on luck; all of it came from lessons learned through stepping into pitfalls. Follow Yangyang.
