In the early days of the crypto space, I was just a pure 'sucker'—full of enthusiasm entering the market, and ended up operating like a gambler, losing hundreds of thousands in less than half a year, wiping out most of the savings I had accumulated from my previous startup. At that time, my wife was giving me the cold shoulder every day, saying I was crazy to get involved with this stuff. Looking back now, I really should have been scolded!
I estimate that many friends are now like I was back in the day, either chasing the market and getting clearly cut, or holding a bunch of coins and unable to sleep, always feeling like they are about to go to zero at any moment. Today, I'm not going to talk nonsense with you; this is all practical experience I summarized after falling countless times, especially the part about the trading process. I suggest you save this and watch it repeatedly; it's 100 times more reliable than following the so-called 'masters' for signals!
Before discussing specific operations, let's set a firm rule: if you cross these three bottom lines, you are jumping into the fire pit. I call it the 'Three Iron Laws of Trading,' which I learned at the cost of hundreds of thousands; you get it for free:
First, don’t rush in when everyone is going crazy! I’ve seen too many people, seeing the market in the green, with everyone around them saying how much they’ve earned, can’t resist going in heavy. Please, by this time, the price has already been driven up by emotions; aren’t you just picking up the pieces? In contrast, when the market is correcting and everyone is too scared to act, that’s the best time to pick up bargains. Remember, opportunities often hide in fear, while greed is filled with traps.
Second, never put all your eggs in one basket! I made this mistake early on, betting everything on one cryptocurrency that I thought would double, only to see it crash and leave me stunned. Later, I realized I should split my funds into several portions and diversify into quality assets across different sectors. Even if one underperforms, the others can help you hold steady and avoid losing everything overnight.
Third, full position trading = cutting off your own escape route! I have seen too many newcomers jump in with full positions, and when there’s a slight fluctuation, they panic, either cutting losses at the lowest point or holding until liquidation. The correct approach is to always keep some cash on hand, so even if the market moves against you, you have room to adjust and won’t be ground into the floor by the market.
Having rules is not enough; a complete trading process is the core of making money. I use these four steps every day, and they are proven effective:
Step one, don’t guess with market analysis. You can use technical analysis methods you’re familiar with, such as looking at trend lines and support/resistance levels. Don’t just follow the crowd or rely on feelings to make trades. I lost a lot early on because I didn’t analyze and relied solely on intuition. Later, I spent 3 hours every day studying the market and gradually understood its patterns.
Step two, position management is crucial! This step directly determines how far you can go. Before entering a trade, think clearly: if it’s profitable, do you increase the position or take profits? How much is appropriate? If it’s a loss, where do you set the stop-loss? Should you reduce the position size first? Here’s a core technique: increase positions in decreasing amounts and decrease positions in decreasing amounts. For instance, if you enter with 20% of your capital, increase to 10% after a profit, then 5%; if it’s a loss, first reduce by 10%, then 5% on further losses. This way, you can lock in profits while controlling risks.
Step three, execute strictly without hesitation! Many people don’t lack understanding of methods, but their execution is too poor. Clearly setting a stop-loss, yet when the market fluctuates, they hesitate to cut losses, thinking they’ll wait a bit longer, resulting in further losses; clearly setting a take-profit, yet greed takes over, thinking it will rise a bit more, only to see profits disappear. I tell you, hesitation is the most taboo in trading; planned actions must be executed decisively, and don’t let market emotions lead you.
Step four, summarizing and reviewing is essential. After each trade, a review must be conducted, especially examining trades made during uptrends, downtrends, and sideways markets. Look at where your analysis went wrong, where your position management had issues, and whether your execution was on point. I write a review diary every day and do a weekly summary, and it is through this continuous optimization that my trading skills have improved.
Let me emphasize a core point: finding support lines is crucial! Support lines not only help determine trends but also serve as a basis for assessing risk. I generally set my stop-loss below the support line so that potential risks are defined; if the price breaks below the support line, I exit decisively without holding the position. Above the support line, as long as the trend hasn’t ended, potential profits are unlimited. If the price rises after entering, I gradually move the stop-loss to near the entry price, ensuring that even if the market suddenly reverses, I can lock in some profits and not end up working for nothing.
From losing hundreds of thousands to achieving eight-digit returns, it took me several years, navigating countless detours and pitfalls. In fact, cryptocurrency trading isn’t that mysterious; the key is mastering the right methods, adhering to your trading principles, and continuously summarizing and optimizing.
Some might say what I’m discussing is too basic, but I assure you, the basics are often the most effective. Many people are eager to find shortcuts, only to end up suffering greater losses. If you are still confused and being taken advantage of, it's better to solidify your understanding of these foundational methods first.
Next, I will continue to share my trading insights and review content, and I will also analyze the trends of some quality assets for everyone. Follow me@链上标哥 , and next time I'll tell you how I profited in a sideways market, including those pitfalls I’ve stepped into, to help you avoid them! What is your most troublesome issue in trading? Is it position management or market analysis? Let me know in the comments, and I’ll dedicate an episode to answering it next time!
