A few days have passed since December, and the cryptocurrency market is experiencing another wave of liquidations——

270,000 people have lost all their investments, with nearly $1 billion evaporated.

How many people see perpetual contracts as a shortcut to wealth, only to be led by FOMO emotions, frequently opening positions, going all in, and ultimately clearing their accounts.

I have been in the cryptocurrency market for 5 years, surviving by following four iron rules, which I share with you to avoid pitfalls:

1. Never go All in, leave some margin.

Don’t put all your investment capital into a single trade; according to the 532 rule, use only 20% of your income for investment, and each position should not exceed 5% of the total capital.

When the significant drop happened in November $BTC , all 400,000 liquidated traders were all-in types; leaving enough margin can withstand corrections.

2. Follow the trend, don’t be a “bottom-fishing master.”

When BTC rushes to $80,000, don’t chase blindly; wait for a breakthrough at key resistance levels and a clear trend before entering the market.

Data shows that when the popularity of hot coins peaks in Google searches, they will definitely fall in the following 30 days; waiting for the trend is better than bottom fishing.

3. Set stop-loss and take-profit levels strictly, don’t fight against human nature.

Set a stop-loss line of 3%-5% when placing an order, and use the inverted pyramid method for taking profits——sell 50% after making 30%, and sell more as it rises.

You should know that after floating profits exceed 50%, there is a 54% probability of a pullback of more than 15%.

4. Avoid unnecessary operations; patience is more valuable than speed.

Low-frequency traders have an annual return of 18.5%, while high-frequency traders only have 11.4%. Instead of randomly clicking every day, it’s better to focus on the trend, with an average of 1-2 planned trades per day being sufficient.

There are no myths in the cryptocurrency market, only discipline.

By adhering to these four strategies, you can survive first and then wait for the bull market to profit.

Follow me for practical skills that can be implemented, see you in the Binance chat room. #加密市场观察