I still remember the day of my third account blow-up: At the end of the 2021 bull market, a popular coin surged 15% in a day. I impulsively threw 80% of my account's funds into it with 5x leverage, thinking 'if it rises another 10%, I’ll double.' As a result, the market suddenly turned and dropped to zero within 3 hours.
It was then that I realized: Positions in the crypto market are not a 'money-making tool,' but a 'lifeline.' Newcomers often think 'heavy positions can make big money,' but forget that market reversals happen faster than their greed. Now, my strict rule for newcomers is: A single trade position must not exceed 3%, even in the most certain market conditions, at least 70% of the capital should remain as a buffer.
Just like driving requires leaving distance to brake, your position buffer is your 'market brake'—even if you misjudge the direction, the remaining capital allows you to start over, while heavily leveraged betting is fundamentally gambling on the market always smiling at you, which is equivalent to suicide in the crypto market.
2. Go with the flow: Don't be a 'stubborn donkey fighting the market.'
I have a student who is always obsessed with 'buying the bottom and selling the top.' Everyone says the trend is upward, but he insists on shorting. When the coin falls below key support levels, he still believes 'there will be a rebound,' and ends up getting trapped more and more, ultimately losing 200,000 in capital and leaving in despair.
The core truth of the crypto market is: Trends are always more reliable than 'you think.' No individual can go against market laws, just as you cannot walk against a typhoon. My current operational logic is very simple:
The upward trend hasn't broken; absolutely do not short.
If the downward trend hasn't reversed, absolutely do not buy the bottom.
In sideways markets, observe directly; don't be a 'headless fly.'
Trading with the trend may not yield the 'massive profits of buying the bottom and selling the top,' but it can help avoid 80% of deep trap risks. Newcomers should remember: The market is not short of opportunities; what it lacks is the clarity of 'not fighting against the trend.'
3. Take profits and cut losses: Put risks into the 'safe box.'
This is the most unforgettable lesson I learned after blowing my account three times: Trades without stop-losses will eventually wipe out your capital; profits without taking profits are merely 'temporary loans' from the market.
Now, the trading principles I adhere to can be directly copied by newcomers:
Single trade loss ≤ 3%. Once the stop-loss line is triggered, exit immediately; never hold onto the illusion of 'wait a bit for a rebound.'
When profits reach 5%, lock in half the profit (take profit 50%), and use a 'trailing stop' to follow the market.
Never treat 'floating profits' as 'actual profits.' Greed will only turn you from 'making money' into 'losing money.'
I've seen too many newcomers miss profit-taking opportunities due to greed, ending up with profits eroded or even losses; I've also seen people stubbornly hold onto losses, going from a 10% loss to a 50% loss. Taking profits and cutting losses is not 'conservative,' it's the only 'lifeline' in the crypto market.
4. Less action is king: Experts are 'waiting for opportunities,' while newcomers are 'looking for opportunities.'
The most common mistake newcomers make is frequent trading: Opening five or six orders in a day, paying a lot in fees, and ultimately losing more with each trade. Meanwhile, I traded less than 60 times last year, with a win rate of 68%, and my profits were three times higher than those of frequently trading newcomers.
Trading is like fishing: The more impatient you are to cast the rod, the harder it is to catch fish; patiently waiting for the right 'bite' is the only way to succeed. The crypto market has fluctuations every day, but truly worthwhile 'high-quality opportunities' arise at most 2-3 times a week.
My advice is: Newcomers should trade a maximum of 1 order per day and remain flat for at least 2 days each week. Spend time on 'observing trends' and 'studying support levels' rather than frequently opening and closing positions while staring at the candlestick chart. Remember: The essence of trading is to 'make certain money,' not 'make money through trading frequency.'
Lastly: Honest words for newcomers.
The crypto market has never had a 'get-rich-quick scheme.' Those who can make money long-term do not rely on luck, but on 'sticking to the bottom line': controlling positions, following trends, strictly taking profits and cutting losses, and maintaining patience.
You don't need to learn complicated technical indicators, nor do you need to believe those 'gurus with trades.' If you can implement these four iron rules, you've already outperformed 90% of newcomers.
