I've seen too many brothers rush into the crypto circle with dreams of 'doubling overnight', only to either be shaken off by volatility or make reckless moves and end up crying over their losses! Today, I'm not holding back; I'm sharing with you the 9 investment rules I’ve learned through 8 years of hard knocks, backed by real money. Each rule hits the nail on the head, and if you don't find any inspiration after reading, feel free to come and criticize me in the comments!
Let me first clarify that I've seen ruthless individuals who went from a few thousand to seven figures, and I've also witnessed the tragic situation of those who held millions only to end up losing it all. The crypto market has never been about 'betting big'; it's a logical game with traces to follow. The following valuable insights are suggested for you to save and review later, so you don't end up searching for them later; after all, missing out could mean losing an opportunity to change the thickness of your wallet!
One, the 'devil's trap' of returns: earning 100% and losing 50%, the difficulty is worlds apart.
Many beginners have a misconception, thinking that 'doubling' and 'losing half' is just a numerical game. Let me break it down for you: suppose you have 100 units, and with good luck, a single operation earns you 100%, doubling your assets to 200 units. Isn’t that exciting? But don’t celebrate too early; with just a small fluctuation, if you lose 50%, you’ll revert back to 100 units.
Here I must emphasize my core viewpoint: in the crypto market, losses are always easier than gains. Gaining requires precise judgment, patient waiting, and a bit of luck; but losses? They can happen just because you were greedy and held on for an extra 10 minutes, or you listened to some 'insider news' and suddenly it's gone. So never take profits for granted; preserving your capital is the top priority!
Two, the 'optical illusion' of price fluctuations: why does money seem to decrease with a 10% rise and fall cycle?
Let me point out a common mistake: thinking that if an asset rises by 10% and then falls by 10%, or falls by 10% and then rises by 10%, it will return to the original point. I’ll demonstrate with 100 units: On the first day, it rises by 10%, making 110 units; on the second day, it falls by 10%, leaving only 99 units. The reverse is the same; if it falls first and then rises, it’s still 99 units.
Isn’t it surprising? This is the 'mathematical trap' of the crypto market. Many people focus on short-term fluctuations daily, getting euphoric when it rises and panicking when it falls. After frequent trading, it seems they haven’t lost much, but in reality, their principal quietly shrinks. My advice is: don’t get entangled in daily ups and downs; keep your eyes on the long term, or you’ll just be the market’s 'ATM'.
Three, the 'gentle knife' of volatility: why is there profit every year, but the annualized return is still lower than treasury bonds?
Some say: 'I’m not greedy, just making a bit each year is fine.' But did you know? Even if there are gains and losses every year, the long-term returns may surprise you. For example, with 100 units of capital, if you earn 40% in the first year, lose 20% in the second, earn 40% in the third, and lose 20% in the fourth, repeating this for six years, your assets will only be 140.5 units.
After calculations, the annualized return over six years is only 5.83%, which is even less than the nominal interest rate of a five-year treasury bond! This is the 'killing power' of volatility - it seems there are profits every year, but in reality, repeated pullbacks swallow those profits. So in the crypto market, don’t just look at how much profit you made in a single instance; pay more attention to 'stable returns'; those who can control the pullback are the ultimate winners.
Four, a daily 1% 'wealth miracle': seemingly insignificant, yet it can be extraordinary.
Many people always think 'one bite can make you fat', waiting every day to catch a doubling asset, but they overlook the power of 'compounding'. Let me give you an astonishing number: starting with 100 units, if you can earn 1% daily and decisively leave the market without being greedy or overtrading, after 250 trading days, your assets will grow to 1203.2 units; if you persist for 500 trading days, it can directly reach 145 million!
Of course, I’m not saying it’s easy to earn 1% every day, but I want to tell everyone: the crypto market is not short of opportunities, but lacks the 'content' mindset. Many people end up losing their profits because of greed, wanting to earn more. Instead of chasing the elusive 'doubling', it’s better to hold on to steady small profits; compounding can bring you surprises.
Five, the 'illusion' of high returns: is it possible to double for five consecutive years?
People often tell me: 'I found a good asset that can double continuously for several years!' I can only say: wake up, brother! Suppose you have 100 units; if you could truly earn 200% every year for five consecutive years, your assets would reach 243 million after five years; this is nothing short of a mythical operation.
In the crypto market, short-term high returns do exist, but maintaining them is harder than climbing to the sky. The market is constantly changing, and even the best assets have their pullbacks. Blindly pursuing high returns will ultimately backfire. My viewpoint is: don’t be dazzled by short-term high returns; pursuing 'sustainable stable returns' is the long-term strategy.
Six, the 'ultimate goal' of ten times in ten years: how ordinary people can achieve it?
Many people enter the crypto market with a dream of 'financial freedom': starting with 100 units of capital, wanting it to grow to 1000 units in ten years, to 100 million in twenty years, and to 1 billion in thirty years. This isn’t impossible, but it requires precise annualized returns to support it.
I've calculated that to achieve this goal, an annualized return must reach 25.89%. This figure seems not high, but maintaining it over the long term is extremely difficult. Ordinary people should rely not on 'gambling', but on reasonable allocation, precise judgment, and strict discipline. Remember: financial freedom isn’t about becoming rich once, but about long-term accumulation.
Seven, the 'correct posture' for add-on purchases: don't miscalculate costs anymore!
Add-on purchases are a method many people use to 'break even', but most miscalculate the cost after adding, resulting in a deeper loss. For example: for a digital asset, you bought 1 unit at 10 units, and now it has dropped to 5 units, and you added another 1 unit. Many would think the cost is 7.5 units, but in reality, your average cost is 6.67 units.
Is it suddenly clear? The core of add-on purchases is to 'lower the average cost', but the premise is that you have to choose the right asset. If the asset itself has issues, the more you add, the more you lose. My advice is: assess the fundamentals of the asset before adding, don’t add blindly, or you’ll just be 'throwing money into a pit'.
Eight, the 'zero-cost technique' of holding costs: let profits stand guard for you.
This is a technique I use most often; once you learn it, you can operate in the market 'with no pressure'. Suppose you have 100 units and invest in a digital asset that earns 10%. At this point, you can sell part and only keep 10 units worth of chips. This way, your holding cost becomes zero, and no matter how the market fluctuates, you won’t lose your principal and can hold on for the long term.
If you are extremely optimistic about this asset and hold on to 20 units worth of chips, you will find that profits can soar from 10% to 100%. Isn’t that exciting? But don’t get carried away; if the asset drops by 50% later, you might find yourself back in a loss situation. So the key to this trick is 'take profits when you see them', don’t be too greedy.
Nine, the 'capital preservation secret' of asset allocation: a must-read logic for beginners.
This last point is a 'lifesaver' for beginners, especially for those who are afraid of losses but want a piece of the pie in the crypto market. We can divide assets into two parts: one part is risk-free assets (like stable products with an annualized return of 5%), and the other part is risk assets (the digital assets we commonly deal with, which have large fluctuations in returns, possibly losing 20% or earning 40%).
Suppose you have 100 units, investing 80 units in risk-free assets and 20 units in risk assets. In this way, the worst return for the entire year is zero, and you won’t lose your principal; the best return can reach 12%, which is much better than simply depositing in a bank. This is the embryonic form of a capital preservation strategy that beginners can directly apply, allowing you to avoid risks while enjoying market dividends.
The above 9 iron rules are all summarized from my personal experiences, with no empty words. The crypto market has never been about 'making money by luck', but rather by logic, discipline, and skill.
If you find today’s content helpful, don’t forget to follow me, like, and save it; otherwise, you won’t find it next time! I will also share more practical tips on the crypto market, asset analysis, and real-time market interpretations. You can comment on what you most want to know, and I will arrange it! Follow me, and I’ll help you make 'steady profits' in the crypto market, avoiding pitfalls and losses!
