At two in the morning, my phone vibrated, and I opened a message from a fan named A-Zhe: 'Teacher, my last 50,000 funds are gone...' The attached trading records were shocking, fully investing in three hotspots within a week, each time holding on stubbornly when the prices fell, and being greedy when the prices rose, ultimately being cleared out by a sudden drop.
In recent years, I have seen too many retail investors in the crypto market, always thinking that losing everything is due to having too little capital, yet they fail to realize that their actions are entirely driven by 'emotions': fantasizing about doubling their investment when prices rise, betting on a rebound when prices fall, turning trading into a gambling table. In fact, to survive in this market, 'anti-human survival logic' is more important than capital.
Step one: First 'save your life', then talk about making money
I had warned Aze before his liquidation: 'Reduce your position to within 20%, leave enough bullets'. His reaction was like most people's: 'It’s too painful to cut losses now! I’ll wait for a rebound to exit'. As a result, three days later the market dropped another 18%, and by the time he wanted to cut losses, it was too late.
My core viewpoint: The crypto market is never short of opportunities, but it lacks 'people who are alive'. When in debt or deeply trapped, the worst thing is to 'bet on a quick recovery'. The correct approach is to immediately cut positions with floating losses exceeding 10%, keeping the remaining funds within a bearable loss range—keeping the principal is crucial for the possibility of waiting for a certain opportunity.
Step two: Don’t 'go against the trend', be a 'follower' of the market
Aze's biggest problem is always thinking about 'buying the dip and selling the top': Holding long positions in a downtrend, claiming to 'buy at the bottom'; Insisting on shorting in an uptrend, believing 'a pullback is imminent'. This is not trading; it’s confronting the market head-on.
My 'foolproof method' for all beginners: Open the candlestick chart and look at the 60-day moving average. When the moving average is in a bullish arrangement (short-term moving average crossing above the long-term moving average), only take long positions; in a bearish arrangement (short-term moving average crossing below the long-term moving average), only take short positions; when the moving averages are tangled and chaotic, stay out of the market and observe. Last month during a volatile market, I forced Aze to stay out for 12 days, avoiding three false breakouts during that time. This is the power of 'following the trend'.
Step three: Use 'iron rules' to control your hands
In the crypto market, understanding technology is not as important as maintaining discipline. I've seen too many people learn a bunch of indicators but get flustered when facing losses: buying more during a rebound, panicking to sell when they earn a little, and ultimately still losing.
The three iron rules I have always used, and I forced Aze to implement:
Set stop-loss lines in advance: Before opening a position, set the stop-loss below the key support level, exit immediately if it breaks, and never harbor the illusion of 'waiting a bit longer';
Single position should not exceed 10%: Even for the most promising targets, do not invest more than 10% of funds to avoid losing everything due to one mistake;
Take profits in a timely manner: Whenever you earn 8%-10%, transfer half of the profits to a safe wallet and use the rest for further speculation. This way, you secure your profits while allowing room for error.
After two months of implementation, Aze not only avoided liquidation but also earned over 20,000 in funds based on these three rules. In fact, many retail investors are not unmotivated; they just haven’t found the right direction. The market will never be absent; what’s lacking is a 'trading framework' that can stabilize the mindset.
