Hold your emotions, and you can dig up gold
I spoke with an old hand who has been in the cryptocurrency space for many years. He entered the market with 100,000 yuan, and now his account has skyrocketed to over 25 million. He told me a phrase that I still remember vividly: "The cryptocurrency market is essentially an emotional amusement park, where most people are just tourists blindly following the crowd. If you can hold onto your own temperament, this place is a treasure trove."
This statement is spot on. Look around, how many people are staring at K-line charts every day with their hearts racing, hastily following trends at the slightest rumor, only to end up being the ones harvested like chives. Meanwhile, those who actually make money are often the ones who appear a bit 'slow.'
First rule: Don't be greedy for small profits, don't take big risks.
These eight words sound simple, but about 80% of people cannot cross this hurdle in their lifetime. I made the same mistake when I first entered the industry: I was eager to take profits as soon as the price rose slightly, afraid that profit would fly away; seeing others earn more made me regret it, so I stubbornly held on next time, resulting in being trapped even more tightly.
This vicious cycle of repeatedly being slapped is fundamentally caused by being led by emotions. The volatility in the cryptocurrency market is large, and those with unstable mindsets can easily be washed out. My experience is: set clear profit-taking and stop-loss lines, and strictly execute them when reached; do not change plans based on mood.
Second rule: Only choose mainstream coins that have dropped thoroughly.
With so many tokens available, I never touch those flashy new coins. My principle is very conservative: only choose those mainstream coins that have been tested by the market and are temporarily undervalued.
How to judge if it has 'dropped thoroughly'? I have a simple method: first, take a 10% position for a tentative entry, without guessing the bottom or trying to catch it; wait until the trend stabilizes before slowly adding to the position. Although this method earns slowly, it is stable and suitable for those of us who seek long-term survival in the market.
Third rule: Only act after determining the trend.
Many people want to buy at the absolute bottom and sell at the highest point, but this thinking is actually quite dangerous. I have seen too many people trying to catch the bottom only to end up halfway up the mountain. My strategy is the opposite: wait until the trend is basically clear before entering, even if the price is already a bit higher than when I first noticed it.
Once a market trend is formed, it will have inertia. In an upward trend, every pullback is an opportunity to increase positions; in a downward trend, every rebound is a chance to reduce positions. Do not attempt to go against the trend; that is the most common mistake made by novices.
Fourth rule: Layered profit harvesting.
The most challenging decisions come when making profits. Many people show considerable gains on paper, but very few can actually secure them. My method is: every time there’s a rise, first pull back the principal and part of the profits, and let the remaining position drift on its own.
For example, if I invest 100,000 yuan and it rises to 150,000 yuan, I will withdraw my initial investment of 100,000 yuan, leaving 50,000 yuan in profits to continue operating. This way, the mentality will be completely different—it's all money earned, the pressure is much less, and decision-making is more rational.
Technical indicators are merely aids, not the Bible.
Regarding technical analysis, I want to say a few more words. Many people are obsessed with various indicators, thinking they have found the universal key to wealth. But in my years of experience, all technical indicators are merely auxiliary tools and should not be the sole basis for decision-making.
Take MACD as an example; it is essentially a secondary processing of moving averages that addresses the lagging issue of moving averages. However, many people have mythologized it, buying at golden crosses and selling at death crosses, only to be slapped by the market. Technical indicators must be combined with market conditions, capital flows, and sentiment for meaningful judgments.
The cryptocurrency market is a 24-hour trading environment with no market close, so the indicators used in traditional financial markets need to be adjusted. For example, the parameter settings for MACD need to be optimized for the characteristics of the cryptocurrency market; otherwise, accuracy will be significantly reduced.
Sentiment analysis: A money-making tool often overlooked by most.
The importance of sentiment analysis in the cryptocurrency world is greatly underestimated. Market sentiment often precedes price changes; being able to foresee turning points in sentiment is equivalent to having an opportunity.
Some sentiment indicators I often use include:
Fear and greed index: Below 20 indicates extreme fear, which may be a buying opportunity; above 80 indicates extreme greed, necessitating consideration of reducing positions.
Social media activity: A sudden surge in discussions about a particular coin often indicates an upcoming market shift.
Whale movements: Large transfers often indicate significant changes.
But remember, sentiment indicators are just one of the references and need to be verified from multiple aspects to improve success rates.
The miracle of compound interest: Earning a little each day is sufficient.
Many people look down on small amounts of money, always wanting to get rich quickly. But the power of compound interest is precisely underestimated by most people. Assuming you earn a stable 1% daily (earning 10 yuan from a principal of 1000 yuan), the returns after a year far exceed 300%.
The key word is 'stability.' The temptations in the cryptocurrency world are too many; seeing this coin double today and that project booming tomorrow can easily lead one to deviate from their original plan. My experience is: set small daily goals, stop when achieved, and don't be greedy.
For example, if your principal is 5,000 yuan and your daily target is to earn 50 yuan (1%), reduce operations once the target is achieved. This way, not only is the risk controllable, but the mentality will also improve.
The survival path of real people.
There are many smart people in the cryptocurrency world, but what is lacking is the 'real person' who can hold back their hands and stay calm. While everyone is chasing up and down, if you steadily follow the trend, you can instead pick up the chips that others hastily abandon.
The experienced trader I know, who went from 100,000 to 25 million, had no secret to his success; he strictly followed the above principles, remained rational when others were controlled by emotions, bravely entered during market panic, and exited in a timely manner during market greed.
There is no shortcut in the cryptocurrency world, but there are experiences that can help you avoid detours. I hope my sharing can help you find your direction in this emotional vortex. Remember, in this market, lasting longer is more important than earning quickly.
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