Last week, during a review with my apprentice Xiaolin, she suddenly slammed her phone on the table, her eyes red like ripe cherries: 'Sister! I had four hundred thousand in principal, and now I have less than forty thousand left!'
I handed over a glass of warm water and couldn't help but tease, 'Back then, when I asked you to take eighty thousand to practice, you said I was too conservative, that when the opportunity came, we had to charge in. That saying is still fresh, isn't it?'
Xiaolin patted her thigh in regret: 'At that time, my mind was full of 'missing out is worse than being trapped', and the risk control you mentioned, I just treated it as a passing breeze!'
Looking at her frantic expression, I wasn't surprised at all—having been in the crypto market for eight years, I've seen too many beginners like this. I pointed at the K-line chart on her phone and bluntly said, 'In a market that operates 24 hours, our positions are like duckweed in a pond, swaying with the wind. You think that 'buying leads to a drop, and selling leads to a rise' is targeted at you, but in fact, beginners often overestimate the importance of their actions and forget that the market doesn't have the time to 'focus' on retail investors.'
She suddenly leaned in: 'Can I still turn this around? What exactly should I do to make money?'
In fact, this question has a hundred different ways of asking it from a hundred beginners, but the answer is so simple that no one wants to believe it— the core of making money in the crypto market has never been about finding hundred-fold assets, but about having self-control.
As an analyst with eight years of experience, I would like to share a few key rules: if beginners follow them, they can at least reduce losses by 80%.
1. Position management: beginners should not stubbornly stick to 'full leverage'.
I have always emphasized to my apprentice: when entering the market for the first time, do not exceed 20% of your available investment amount, and divide it into 3-4 batches. For example, if you have 100,000, first invest 20,000, and if it falls 15%, add another 20,000, then if it falls another 15%, add 30,000, leaving the remaining 30,000 to cope with extreme market conditions. Being fully invested with leverage may seem like 'earning quickly,' but in reality, it puts you on the edge of a cliff; a single market correction can wipe you out, and Xiaolin is a bloody example.
2. Stop-loss settings: set it and 'forget it'.
No matter what asset you choose, first find the key support level before entering the market, set the stop-loss line 10% below the support level, and once set, do not modify it manually. Many people lose a lot of money because they 'think it will bounce back' and cancel their stop-loss, ultimately getting deeper into trouble. Remember: a stop-loss is not admitting defeat; it is to protect your capital and leave the opportunity to fight again next time.
3. Dollar-cost averaging is 10 times more reliable than 'random trading'.
I have seen finance professors lose everything with complicated quantitative models, and I have also seen community aunties consistently invest 5,000 every week and earn 40% after a year. Beginners often think that 'not staying up late to study materials and not trading frequently means not working hard', but the truth in the crypto market is: frequent trading fees will eat away your profits, and emotional trading will make you lose more as you chase highs and cut losses. The core of dollar-cost averaging is 'using time to exchange for space', ignoring short-term fluctuations, and holding quality assets is the way to go.
4. Anti-human nature principle: do not act when floating losses are within 30%.
Xiaolin's biggest frustration is 'just after cutting losses, the price goes up'; in fact, this is a common issue for beginners—unable to withstand the pressure of floating losses. Short-term fluctuations in quality assets are normal; as long as the fundamentals do not change, floating losses within 30% are a normal adjustment. My own practice is: unless the asset breaks a key support level, I will not easily sell regardless of how much it drops. Remember: in the crypto market, 'being able to endure' is more important than 'choosing correctly'.
Xiaolin was silent for a long time after listening: 'Is it that simple? No need to watch the market every day or look for insider information?'
I smiled and asked back: 'You watch the market every day, have you made any money? Did those so-called insider messages help you lose less?'
In fact, the essence of the crypto market lies in the most basic discipline: do not be greedy (do not chase hundred-fold altcoins), do not be anxious (do not trade frequently), do not be reckless (do not blindly leverage). Beginners often think that making money relies on 'skills', but true experts understand that being able to maintain composure in the midst of turmoil is the greatest skill.
Next, I will continue to share the 'anti-human nature operation guide' for the crypto market, such as how to identify quality assets and how to avoid seemingly enticing traps. Follow me, and next time we will discuss 'those techniques that can help you reduce losses by 80%'—after all, in this market, survival is key to waiting for profit opportunities.
